Recently asked questions relating to Chinatown leasehold conveyancing
Frank (my husband) and I may need to rent out our Chinatown ground floor flat for a while due to a career opportunity. We used a Chinatown conveyancing firm in 2003 but they have closed and we did not think at the time get any guidance as to whether the lease prohibits the subletting of the flat. How do we find out?
A lease governs the relationship between the freeholder and you the flat owner; specifically, it will say if subletting is prohibited, or permitted but only subject to certain conditions. The accepted inference is that if the lease contains no expres ban or restriction, subletting is permitted. The majority of leases in Chinatown do not contain an absolute prevention of subletting – such a provision would adversely affect the market value the property. In most cases there is simply a requirement that the owner notifies the freeholder, possibly supplying a duplicate of the sublease.
Having checked my lease I have discovered that there are only Sixty One years left on my flat in Chinatown. I am keen to extend my lease but my freeholder is missing. What are my options?
If you meet the appropriate requirements, under the Leasehold Reform, Housing and Urban Development Act 1993 you can apply to the County Court for an order to dispense with the service of the initial notice. This will enable the lease to be extended by the magistrate. You will be obliged to demonstrate that you have done all that could be expected to find the freeholder. For most situations an enquiry agent may be useful to carry out a search and to produce a report to be used as evidence that the freeholder can not be located. It is wise to seek advice from a conveyancer both on devolving into the landlord’s absence and the application to the County Court overseeing Chinatown.
I am looking at a two flats in Chinatown both have approximately forty five years left on the leases. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold flat in Chinatown is a deteriorating asset as a result of the reducing lease term. The closer the lease gets to zero years unexpired, the more it adversely affects the value of the premises. For most purchasers and banks, leases with under eighty years become less and less attractive. On a more positive note, leaseholders can extend their leases by serving a Section 42 Notice. One stipulation is that they must have owned the premises for two years (unlike a Section 13 notice for purchasing the freehold, when leaseholders can participate from day one of ownership). When successful, they will have the right to an extension of 90 years to the current term and ground rent is effectively reduced to zero. Before moving forward with a purchase of a residence with a short lease term remaining you should talk to a solicitor specialising in lease extensions and leasehold enfranchisement. We are are happy to put you in touch with Chinatown conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. More often than not it is possible to negotiate informally with the freeholder to extend the lease You may find he or she is happy to negotiate informally and willing to consider your offer straight off, without having to involve anyone else. This will save you time and money and it could help you reach a lower price on the lease. You need to ensure that the agreed terms represent good long-term value compared with the standard benefits of the Section 42 Notice and that onerous clauses are not inserted into any redrafting of the lease.
Do you have any top tips for leasehold conveyancing in Chinatown from the perspective of speeding up the sale process?
- Much of the delay in leasehold conveyancing in Chinatown can be reduced where you get in touch lawyers as soon as your agents start advertising the property and request that they start to collate the leasehold documentation which will be required by the purchasers’ representatives.
- Many landlords or managing agents in Chinatown charge for providing management packs for a leasehold property. You or your lawyers should find out the fee that they propose to charge. The management pack can be applied for on or before finding a buyer, thus accelerating the process. The typical amount of time it takes to obtain the necessary information is three weeks. It is the most frequent reason for frustration in leasehold conveyancing in Chinatown.
If all goes to plan we aim to complete the sale of our £125000 maisonette in Chinatown next week. The managing agents has quoted £396 for Certificate of Compliance, insurance certificate and previous years statements of service charge. Is it legal for a freeholder to charge an administration fee for a leasehold conveyance in Chinatown?
Chinatown conveyancing on leasehold flats normally involves the purchaser’s lawyer submitting enquiries for the landlord to answer. Although the landlord is not legally bound to address these enquiries the majority will be content to do so. They are at liberty invoice a reasonable administration fee for answering enquiries or supplying documentation. There is no set fee. The average fee for the paperwork that you are referring to is over three hundred pounds, in some transactions it is in excess of £800. The management information fee required by the landlord must be accompanied by a summary of entitlements and obligations in relation to administration charges, without which the charge is not strictly payable. Reality however dictates that you have little choice but to pay whatever is demanded if you want to sell the property.
Having spent months of correspondence we cannot agree with our landlord on how much the lease extension should cost for our flat in Chinatown. Can we issue an application to the Residential Property Tribunal Service?
Most certainly. We are happy to put you in touch with a Chinatown conveyancing firm who can help.
An example of a Freehold Enfranchisement decision for a Chinatown premises is 36 New Wanstead in August 2010. The Tribunal arrived at a valuation of the premium for the freehold of £22,359. This case was in relation to 2 flats. The the unexpired residue of the current lease was 73.92 years.