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Questions and Answers: Chislehurst leasehold conveyancing

I am tempted by the attractive purchase price for a couple of flats in Chislehurst both have in the region of fifty years unexpired on the leases. Should I regard a short lease as a deal breaker?

There is no doubt about it. A leasehold apartment in Chislehurst is a deteriorating asset as a result of the reducing lease term. The nearer the lease gets to its expiry date, the more it reduces the value of the premises. For most buyers and banks, leases with less than 75 years become less and less attractive. On a more upbeat 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 property 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 Chislehurst 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 any new 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.

Last month I purchased a leasehold flat in Chislehurst. Do I have any liability for service charges relating to a period prior to my ownership?

In a situation where the service charge has already been demanded from the previous owner and they have not paid you would not usually be personally liable for the arrears. Strange as it may seem, your landlord may still be able to take action to forfeit the lease. A critical element of leasehold conveyancing for your conveyancer to ensure to have an up to date clear service charge receipt before completion of your purchase. If you have a mortgage this is likely to be a requirement of your lender.

If you purchase part way through an accounting year you may be liable for charges not yet demanded even if they relate to a period prior to your purchase. In such circumstances your conveyancer would normally arrange for the seller to set aside some money to cover their part of the period (usually called a service charge retention).

I am a negotiator for a busy estate agent office in Chislehurst where we have witnessed a number of flat sales derailed due to leases having less than 80 years remaining. I have been given inconsistent advice from local Chislehurst conveyancing solicitors. Please can you clarify whether the owner of a flat can initiate the lease extension process for the purchaser on completion of the sale?

As long as the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to kick-start the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the buyer can avoid having to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed prior to, or at the same time as completion of the sale.

Alternatively, it may be possible to agree the lease extension with the freeholder either before or after the sale. If you are informally negotiating there are no rules and so you cannot insist on the landlord agreeing to grant an extension or transferring the benefit of an agreement to the buyer.

Can you provide any advice for leasehold conveyancing in Chislehurst with the intention of speeding up the sale process?

  • A significant proportion of the frustration in leasehold conveyancing in Chislehurst can be reduced where you instruct lawyers the minute your agents start marketing the property and request that they start to put together the leasehold documentation needed by the buyers lawyers.
  • In the event that you altered the property did you need the Landlord’s approval? Have you, for example installed wooden flooring? Most leases in Chislehurst state that internal structural changes or addition of wooden flooring calls for a licence issued by the Landlord acquiescing to such works. Where you fail to have the paperwork to hand do not contact the landlord without checking with your solicitor before hand.
  • Some Chislehurst leases require Landlord’s consent to the sale and approval of the buyers. If this applies to your lease, it would be prudent to place the estate agents on notice to make sure that the purchasers obtain financial (bank) and professional references. The bank reference should make it clear that the buyer is financially capable of paying the yearly service charge and the actual amount of the service charge should be quoted in the bank’s letter. You will therefore need to provide your estate agents with the service charge figures so that they can pass this information on to the buyers or their solicitors.
  • If you have had any disputes with your landlord or managing agents it is very important that these are resolved before the property is put on the market. The purchasers and their solicitors will be nervous about purchasing a property where there is an ongoing dispute. You may need to swallow your pride and discharge any arrears of service charge or resolve the dispute prior to completion of the sale. It is therefore preferable to have any dispute settled prior to the contract papers being issued to the buyers’ solicitors. You are still duty bound to disclose details of the dispute to the purchasers, but it is better to reveal the dispute as over rather than unsettled.
  • If you hold a share in a the freehold, you should make sure that you have the original share document. Arranging a duplicate share certificate is often a lengthy formality and slows down many a Chislehurst home move. Where a new share is needed, you should approach the company director and secretary or managing agents (if relevant) for this sooner rather than later.

  • Our conveyancer has advised that he intends to complete and exchange simultaneously on the sale of our £475000 apartment in Chislehurst in 5 days. The landlords agents has quoted £312 for Landlord’s certificate, insurance certificate and previous years statements of service charge. Is the landlord entitled to charge an administration fee for a leasehold conveyance in Chislehurst?

    For the majority of leasehold sales in Chislehurst conveyancing will involve, queries regarding the management of a building inevitably needing to be answered directly by the freeholder or its agent, this includes :

    • Completing pre-exchange enquiries
    • Where consent is required before sale in Chislehurst
    • Copies of the building insurance and schedule
    • Deeds of covenant upon sale
    • Registering of the assignment of the change of lessee after a sale
    Your conveyancer will have no control over the level of the charges for this information but the average costs for the information for Chislehurst leasehold property is £350. For Chislehurst conveyancing transactions it is customary for the seller to pay for these costs. The landlord or their agents are under no legal obligation to answer such questions most will be willing to do so - albeit often at exorbitant prices where the fees bear little relation to the work involved. Unfortunately there is no law that requires fixed charges for administrative tasks. Neither is there any legal time frame by which they are obliged to supply the information.

    I inherited a a ground floor purpose built flat in Chislehurst. Given that I can not reach agreement with the freeholder, can the Leasehold valuation Tribunal make a decision on the amount payable for the purchase of the freehold?

    in cases where there is a missing landlord or if there is disagreement about the premium for a lease extension, under the relevant statutes you can apply to the LVT to arrive at the amount due.

    An example of a Lease Extension decision for a Chislehurst residence is 70 Andace Park Gardens 133-149 Widmore Road in November 2013. Tribunal determined that the premium payable for the lease extension was £10,052 This case related to 1 flat. The remaining number of years on the lease was 72 years.

    Other Topics

    Lease Extensions in Chislehurst