Highgate leasehold conveyancing: Q and A’s
I would like to rent out my leasehold flat in Highgate. Conveyancing solicitor who did the purchase is retired - so can't ask him. Do I need to ask my freeholder for permission?
A lease dictates the relationship between the freeholder and you the leaseholder; in particular, it will set out if subletting is banned, or permitted but only subject to certain conditions. The rule is that if the lease contains no expres ban or restriction, subletting is allowed. The majority of leases in Highgate do not contain strict prohibition on subletting – such a provision would adversely affect the market value the property. Instead, there is usually a basic requirement that the owner notifies the freeholder, possibly sending a copy of the sublease.
I am tempted by the attractive purchase price for a two apartments in Highgate which have approximately fifty years remaining on the lease term. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold apartment in Highgate is a wasting asset as a result of the reducing lease term. The nearer the lease gets to its expiry date, the more it adversely affects the value of the premises. The majority of purchasers and mortgage companies, 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 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 Highgate 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 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 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.
I've recently bought a leasehold flat in Highgate. Do I have any liability for service charges relating to a period prior to completion of my purchase?
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 Highgate where we have experienced a few leasehold sales put at risk due to short leases. I have received inconsistent advice from local Highgate conveyancing solicitors. Please can you confirm whether the vendor of a flat can start the lease extension process for the buyer?
As long as 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 sit tight for 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 buyer.
Completion in due on the disposal of our £375000 garden flat in Highgate in 10 days. The managing agents has quoted £348 for Certificate of Compliance, insurance certificate and previous years statements of service charge. Is the landlord entitled to charge exorbitant fees for a leasehold conveyance in Highgate?
Highgate conveyancing on leasehold apartments normally involves the buyer’s solicitor submitting enquiries for the landlord to answer. Although the landlord is not legally bound to respond to these enquiries most will be content to do so. They may invoice a reasonable charge for answering questions or supplying documentation. There is no set fee. The average costs for the paperwork that you are referring to is over three hundred pounds, in some transactions it is above £800. The administration charge levied by the landlord must be sent together with a synopsis of rights and obligations in respect of administration charges, otherwise the charge is technically not due. Reality however dictates that you have no option but to pay whatever is requested of you should you wish to sell the property.
I am the registered owner of a second floor flat in Highgate. In the absence of agreement between myself and the freeholder, can the Leasehold valuation Tribunal make a decision on the premium payable for a lease extension?
Absolutely. We are happy to put you in touch with a Highgate conveyancing firm who can help.
An example of a Lease Extension decision for a Highgate premises is Flat 2A 19 Shepherds Hill in June 2014. The tribunal concluded in accordance with section 48 and schedule 13 of the Leasehold Reform,Housing and Urban Development Act (the 1993 Act) that the premium payable in respect of the grant of a new lease for the Flat be £24,303 (twenty four thousand three hundred and three pounds) This case was in relation to 1 flat. The unexpired term was 67.85 years.