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Questions and Answers: Hackney leasehold conveyancing

I only have 72 years remaining on my lease in Hackney. I need to extend my lease but my freeholder is absent. What are my options?

On the basis that you meet the appropriate requirements, under the Leasehold Reform, Housing and Urban Development Act 1993 you can submit an application to the County Court for for permission to dispense with the service of the initial notice. This will enable the lease to be granted an extra 90 years by the Court. However, you will be required to prove that you have made all reasonable attempts to find the landlord. In some cases a specialist may be helpful to conduct investigations and to produce a report to be accepted by the court as evidence that the freeholder is indeed missing. It is advisable to get professional help from a conveyancer in relation to proving the landlord’s absence and the application to the County Court overseeing Hackney.

I am a negotiator for a long established estate agency in Hackney where we have witnessed a few leasehold sales put at risk as a result of short leases. I have been given inconsistent advice from local Hackney conveyancing firms. Could you confirm whether the owner of a flat can commence the lease extension process for the purchaser on completion of the sale?

Provided that the seller has owned the lease for at least 2 years it is possible, to serve a Section 42 notice to commence the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the proposed purchaser need not have to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment has to be done before, or at the same time as completion of the disposal of the property.

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 purchaser.

What advice can you give us when it comes to finding a Hackney conveyancing firm to deal with our lease extension?

If you are instructing a property lawyer for lease extension works (regardless if they are a Hackney conveyancing firm) it is most important that he or she should be familiar with the legislation and specialises in this area of conveyancing. We recommend that you talk with two or three firms including non Hackney conveyancing practices prior to instructing a firm. Where the conveyancing practice is ALEP accredited then that’s a bonus. Some following of questions might be helpful:

  • How many lease extensions has the firm completed in Hackney in the last year?
  • What are the charges for lease extension conveyancing?

  • If all goes to plan we aim to complete the disposal of our £150000 garden flat in Hackney in 8 days. The landlords agents has quoted £384 for Certificate of Compliance, insurance certificate and 3 years statements of service charge. Is the landlord entitled to charge such fees for a flat conveyance in Hackney?

    Hackney conveyancing on leasehold maisonettes usually necessitates the buyer’s conveyancer submitting enquiries for the landlord to address. Although the landlord is under no legal obligation to address these enquiries the majority will be willing to assist. They are at liberty levy a reasonable administration fee for responding to enquiries or supplying documentation. There is no upper cap for such fees. The average fee for the information that you are referring to is £350, in some transactions it exceeds £800. The management information fee demanded by the landlord must be accompanied by a synopsis of rights and obligations in relation to administration fees, without which the invoice is not strictly payable. Reality however dictates that one has no choice but to pay whatever is requested of you if you want to exchange contracts with the buyer.

    Having spent years of dialogue we cannot agree with our landlord on how much the lease extension should cost for our flat in Hackney. Does the Leasehold Valuation Tribunal have jurisdiction to calculate the appropriate figures?

    Where there is a missing freeholder or where there is disagreement about what the lease extension should cost, under the Leasehold Reform, Housing and Urban Development Act 1993 you can apply to the First-tier Tribunal (Property Chamber) to calculate the price payable.

    An example of a Freehold Enfranchisement matter before the tribunal for a Hackney residence is 150 Amhurst Road in December 2013. The tribunal concluded that the premium to be paid by the applicant for the enfranchisement of the subject property was £43,500. This case affected 4 flats. The the unexpired term as at the valuation date was 90 (or thereabouts).

    Are there common defects that you see in leases for Hackney properties?

    There is nothing unique about leasehold conveyancing in Hackney. All leases is drafted differently and legal mistakes in the legal wording can sometimes mean that certain clauses are not included. The following missing provisions could result in a defective lease:

    • A provision to repair to or maintain elements of the premises
    • Insurance obligations
    • A provision for the recovery of money spent for the benefit of another party.
    • Maintenance charge proportions which don’t add up to the correct percentage

    You will have a problem when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Yorkshire Building Society, Virgin Money, and Bank of Ireland all have express conveyancing instructions when it comes to what is expected in a lease. Where a lender has been advised by their lawyers that the lease is defective they may refuse to grant the mortgage, forcing the purchaser to withdraw.

    Other Topics

    Lease Extensions in Hackney