I today plan to offer on a house that appears to be perfect, at a reasonable price which is making it more attractive. I have just discovered that the title is leasehold rather than freehold. I am assuming that there are particular concerns purchasing a house with a leasehold title in Croydon. Conveyancing advisers have not yet been instructed. Will my lawyers set out the implications of buying a leasehold house in Croydon ?

Most houses in Croydon are freehold and not leasehold. In this scenario it’s worth having a local conveyancer used to dealing with such properties who can help the conveyancing process. It is clear that you are purchasing in Croydon so you should seriously consider shopping around for a Croydon conveyancing practitioner and be sure that they have experience in advising on leasehold houses. First you will need to check the unexpired lease term. Being a lessee you will not be entirely free to do whatever you want to the property. The lease will likely included provisions for example requiring the freeholder’spermission to carry out changes to the property. You may also be required to pay a service charge towards the upkeep of the communal areas where the property is located on an estate. Your conveyancer should appraise you on the various issues.

I am attracted to a couple of flats in Croydon which have in the region of 50 years remaining on the lease term. Will this present a problem?

There are no two ways about it. A leasehold apartment in Croydon is a wasting asset as a result of the reducing lease term. The closer the lease gets to its expiry date, the more it reduces the salability of the premises. The majority of purchasers and banks, leases with less than 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 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 Croydon conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending 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.

I've recently bought a leasehold house in Croydon. Am I liable to pay service charges relating to a period prior to my ownership?

Where the service charge has already been demanded from the previous lessee and they have not paid you would not usually be personally liable for the arrears. However, 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).

Can you offer any advice when it comes to appointing a Croydon conveyancing practice to deal with our lease extension?

When appointing a property lawyer for lease extension works (regardless if they are a Croydon conveyancing firm) it is imperative that they be familiar with the legislation and specialises in this area of conveyancing. We recommend that you speak with two or three firms including non Croydon conveyancing practices prior to instructing a firm. If the firm is ALEP accredited then so much the better. Some following of questions might be useful:

• How many lease extensions has the firm carried out in Croydon in the last 12 months?

Do you have any advice for leasehold conveyancing in Croydon from the perspective of speeding up the sale process?

• A significant proportion of the frustration in leasehold conveyancing in Croydon can be reduced where you get in touch lawyers as soon as you market your property and ask them to collate the leasehold documentation needed by the buyers lawyers.
• If you have carried out any alterations to the property would they have required Landlord’s permission? In particular have you laid down wooden flooring? Croydon leases often stipulate that internal structural changes or laying down wooden flooring necessitate a licence from the Landlord consenting to such changes. Should you dont have the paperwork in place do not communicate with the landlord without contacting your conveyancer in the first instance.

I have given up trying to purchase the freehold in Croydon. Can this matter be resolved via the Leasehold Valuation Tribunal?

in cases where there is a absentee freeholder or where there is dispute about the premium for a lease extension, under the Leasehold Reform, Housing and Urban Development Act 1993 it is possible to make an application to the Leasehold Valuation Tribunal to determine the price.

An example of a Freehold Enfranchisement matter before the tribunal for a Croydon residence is 29 Woodstock Road in April 2014. the Tribunal determined that the premiums to be paid into court in respect of the purchase of the freehold registered at HMLR under Title N0.SY3997 should be £7,217. This case related to 4 flats. The unexpired lease term was 98 years.

Other Topics

Lease Extensions in Croydon