Estate agents have just been given the go-ahead to market my basement apartment in Holborn.Conveyancing is yet to be initiated but I have just had a quarterly service charge demand – Do I pay up?

It best that you discharge the invoice 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 unless 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. Having a clear account will assist your cause and will leave you no worse off financially.

I work for a long established estate agency in Holborn where we see a few leasehold sales put at risk due to short leases. I have been given contradictory information from local Holborn conveyancing firms. Please can you clarify whether the vendor of a flat can instigate the lease extension process 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 proposed purchaser can avoid having to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed before, or simultaneously with completion of the disposal of the property.

An alternative approach is 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.

Do you have any top tips for leasehold conveyancing in Holborn with the purpose of speeding up the sale process?

• A significant proportion of the frustration in leasehold conveyancing in Holborn can be reduced if you instruct lawyers the minute your agents start marketing the property and ask them to put together the leasehold documentation which will be required by the purchasers’ representatives.
• The majority freeholders or Management Companies in Holborn charge for providing management packs for a leasehold premises. You or your lawyers should discover the fee that they propose to charge. The management pack can be applied for as soon as you have a buyer, thus reducing delays. The average time it takes to obtain the necessary information is three weeks. It is the most usual cause of delay in leasehold conveyancing in Holborn.

Some Holborn leases require Landlord’s consent to the sale and approval of the buyers. If this applies to your lease, you should notify your estate agents to make sure that the purchasers obtain financial (bank) and professional references. The bank reference will need to confirm that the buyers are financially capable of paying the annual service charge and the actual amount of the service charge should be quoted in the bank’s letter. You will therefore need to provide your estate agents with the service charge figures so that they can pass this information on to the buyers or their solicitors.

If there is a history of conflict with your landlord or managing agents it is very important that these are resolved prior to the flat being marketed. The purchasers and their solicitors will be reluctant to purchase a property where a dispute is unresolved. You will have to accept that you will have to discharge any arrears of service charge or resolve the dispute prior to the buyers completing the purchase. It is therefore preferable to have any dispute settled prior to the contract papers being issued to the buyers’ solicitors. You are still duty bound to disclose particulars of the dispute to the purchasers, but it is clearly preferable to present the dispute as historic rather than ongoing.

If you have the benefit of shareholding in the freehold, you should make sure that you have the original share certificate. Arranging a duplicate share certificate is often a lengthy formality and slows down many a Holborn conveyancing transaction. If a new share is necessary, you should approach the company director and secretary or managing agents (if applicable) for this at the earliest opportunity.

If all goes to plan we aim to complete our sale of a £250000 flat in Holborn next week. The freeholder has quoted £372 for Certificate of Compliance, building insurance schedule and previous years statements of service charge. Is it legal for a freeholder to charge exorbitant fees for a leasehold conveyance in Holborn?

For the majority of leasehold sales in Holborn conveyancing will involve, queries regarding the management of a building inevitably needing to be answered directly by the freeholder or its agent, this includes :

• Completing pre-contract questions
• Where consent is required before sale in Holborn
• Supplying insurance information
• Deeds of covenant upon sale
• Registering of the assignment of the change of lessee after a sale

Your solicitor will have no control over the level of the charges for this information but the average costs for the information for Holborn leasehold property is £350. For Holborn conveyancing transactions it is customary for the seller to pay for these costs. The landlord or their agents are under no legal obligation to answer such questions most will be willing to do so - albeit often at exorbitant prices where the fees bear little relation to the work involved. Unfortunately there is no law that requires fixed charges for administrative tasks. Neither is there any legal time frame by which they are obliged to provide the information.

We have reached the end of our tether in negotiating a lease extension in Holborn. Can the Leasehold Valuation Tribunal adjudicate on premiums?

if there is a missing landlord 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 arrive at the sum to be paid.

An example of a Lease Extension matter before the tribunal for a Holborn flat is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case affected 1 flat. The the unexpired residue of the current lease was 66.8 years.

What are the common defects that you witness in leases for Holborn properties?

There is nothing unique about leasehold conveyancing in Holborn. Most leases are individual and drafting errors can sometimes mean that certain clauses are not included. The following missing provisions could result in a defective lease:

• Repairing obligations to or maintain parts of the premises
• A duty to insure the building
• Clauses dealing with recovering service charges for expenditure on the building or common parts.
• Service charge per centages that don't add up correctly leaving a shortfall

You will encounter 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. Accord Mortgages Ltd, The Royal Bank of Scotland, and Britannia all have express requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease is problematic they may refuse to provide security, obliging the purchaser to withdraw.

Other Topics

Lease Extensions in Holborn