Frequently asked questions relating to Hampstead leasehold conveyancing
I only have Fifty years left on my flat in Hampstead. I need to extend my lease but my freeholder is can not be found. What options are available to me?
On the basis that you qualify, 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 mean that your lease can be extended by the magistrate. You will be obliged to prove that you or your lawyers have made all reasonable attempts to find the freeholder. In some cases a specialist should be useful to carry out a search and prepare an expert document which can be accepted by the court as proof that the freeholder can not be located. It is wise to seek advice from a property lawyer both on devolving into the landlord’s disappearance and the application to the County Court covering Hampstead.
I am looking at a couple of flats in Hampstead both have about 50 years unexpired on the leases. Do I need to be concerned?
There is no doubt about it. A leasehold flat in Hampstead is a deteriorating asset as a result of the shortening lease. The closer the lease gets to its expiry date, the more it adversely affects the salability of the premises. For most buyers and mortgage companies, leases with under eighty years become less and less marketable. 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 property 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 Hampstead 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 They may agree to a smaller lump sum and an increase in the ground rent, but to shorter extension terms in return. 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.
Last month I purchased a leasehold house in Hampstead. Do I have any liability for service charges for periods before completion of my purchase?
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).
If all goes to plan we aim to complete the sale of our £450000 garden flat in Hampstead next week. The freeholder has quoted £300 for Landlord’s certificate, insurance certificate and 3 years service charge statements. Is the landlord entitled to charge an administration fee for a leasehold conveyance in Hampstead?
Hampstead conveyancing on leasehold apartments usually involves the buyer’s solicitor sending enquiries for the landlord to answer. Although the landlord is not legally bound to respond to such questions the majority will be willing to assist. They may levy a reasonable administration fee for responding to 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 above £800. The management information fee levied by the landlord must be accompanied by a summary of entitlements and obligations in relation to administration charges, otherwise the invoice is technically not due. Reality however dictates that one has little choice but to pay whatever is requested of you should you wish to exchange contracts with the buyer.
I own a garden flat in Hampstead. 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 dispute about what the lease extension should cost, under the relevant statutes you can apply to the Leasehold Valuation Tribunal to judgment on the amount due.
An example of a Lease Extension case for a Hampstead premises is Raised Ground Floor Flat 20 Fitzjohns Avenue in July 2014. the Tribunal decided that the premiums to be paid for new leases in respect of the Raised Ground Floor Flat and the First Floor Flat were to be calculated as: Raised Ground Floor: £765,175.14 First Floor: £601,617.77 This case was in relation to 2 flats. The the unexpired term as at the valuation date was 16.83 and 16.43.
What makes a Hampstead lease defective?
There is nothing unique about leasehold conveyancing in Hampstead. Most leases are individual and legal mistakes in the legal wording can result in certain provisions are wrong. The following missing provisions could result in a defective lease:
- A provision to repair to or maintain parts of the premises
- Insurance obligations
- A provision for the recovery of money spent for the benefit of another party.
- Service charge per centages that don't add up correctly leaving a shortfall
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. HSBC Bank, Virgin Money, and Platform Home Loans Ltd all have very detailed conveyancing instructions when it comes to what is expected in a lease. If a mortgage lender believes that the lease is problematic they may refuse to grant the mortgage, forcing the purchaser to withdraw.