Common questions relating to Croydon leasehold conveyancing
Estate agents have just been given the go-ahead to market my basement flat in Croydon.Conveyancing is yet to be initiated but I have just had a yearly maintenance charge demand – Do I pay up?
The sensible thing to do is clear the service charge as normal because all ground rent and service charges will be apportioned on completion, so you will be reimbursed by the buyer for the period running from after the completion date to the next payment date. Most management companies will not acknowledge the buyer until the service charges have been paid and are up to date so it is important for both buyer and seller for the seller to show that they are up to date. This will smooth the conveyancing process.
I am attracted to a couple of apartments in Croydon which have about fifty years unexpired on the leases. Should I regard a short lease as a deal breaker?
A lease is a legal document that entitles you to use the property for a prescribed time frame. As a lease gets shorter the marketability of the lease reduces and it becomes more expensive to extend the lease. For this reason it is often a good idea to increase the term of the lease. Sometimes it is difficult to sell a property with a short lease because mortgage lenders may be unwilling to lend money on such properties. Lease enfranchisement can be a difficult process. We recommend you get professional assistance from a solicitor and surveyor with experience in this area
I work for a reputable estate agent office in Croydon where we have witnessed a few leasehold sales put at risk due to leases having less than 80 years remaining. I have received conflicting advice from local Croydon conveyancing firms. Could you clarify whether the owner of a flat can instigate the lease extension formalities for the buyer?
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 sit tight for 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed prior to, or simultaneously with completion of the disposal of the property.
An alternative approach is to extend the lease informally by agreement with the landlord 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.
What advice can you give us when it comes to appointing a Croydon conveyancing firm to deal with our lease extension?
When appointing a conveyancer for your lease extension (regardless if they are a Croydon conveyancing firm) it is most important that they be familiar with the legislation and specialises in this area of conveyancing. We recommend that you make enquires with two or three firms including non Croydon conveyancing practices before you instructing a firm. If the firm is ALEP accredited then so much the better. Some following of questions might be of use:
- How familiar is the practice with lease extension legislation?
After months of dialogue we cannot agree with our landlord on how much the lease extension should cost for our flat in Croydon. Does the Leasehold Valuation Tribunal have jurisdiction to calculate the appropriate figures?
You certainly can. We are happy to put you in touch with a Croydon conveyancing firm who can help.
An example of a Freehold Enfranchisement decision for a Croydon property 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 affected 4 flats. The remaining number of years on the lease was 98 years.
What makes a Croydon lease unacceptable for security purposes?
Leasehold conveyancing in Croydon is not unique. Most leases are individual and legal mistakes in the legal wording can result in certain sections are erroneous. The following missing provisions could result in a defective lease:
- A provision to repair to or maintain parts of the property
- A duty to insure the building
- Clauses dealing with recovering service charges for expenditure on the building or common parts.
- Maintenance charge proportions which don’t add up to the correct percentage
A defective lease can cause issues when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. Yorkshire Building Society, Skipton Building Society, and Bank of Ireland all have express requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease does not cover certain provisions they may refuse to provide security, forcing the purchaser to withdraw.