Top Five Questions relating to Mile End leasehold conveyancing
I am hoping to complete next month on a ground floor flat in Mile End. Conveyancing lawyers inform me that they report fully tomorrow. What should I be looking out for?
The report on title for your leasehold conveyancing in Mile End should include some of the following:
- You should be sent a copy of the lease
I am attracted to a two apartments in Mile End which have about 50 years left on the lease term. Do I need to be concerned?
There are no two ways about it. A leasehold apartment in Mile End is a deteriorating asset as a result of the shortening lease. The nearer the lease gets to zero years unexpired, the more it adversely affects the marketability of the property. The majority of purchasers and lenders, leases with under 75 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 Mile End 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.
I work for a busy estate agent office in Mile End where we see a few flat sales derailed as a result of leases having less than 80 years remaining. I have been given inconsistent advice from local Mile End conveyancing solicitors. Could you shed some light as to whether the seller of a flat can initiate the lease extension process for the buyer?
Provided that the seller has owned the lease 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. This means that the buyer can avoid having 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 prior to, or simultaneously with completion of the sale.
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 purchaser.
What are your top tips when it comes to appointing a Mile End conveyancing firm to carry out our lease extension conveyancing?
If you are instructing a conveyancer for your lease extension (regardless if they are a Mile End conveyancing practice) it is essential that they be familiar with the legislation and specialises in this area of conveyancing. We advise that you talk with several firms including non Mile End conveyancing practices prior to instructing a firm. If the firm is ALEP accredited then that’s a bonus. Some following of questions could be of use:
- How experienced is the firm with lease extension legislation?
Our conveyancer has advised that he intends to complete and exchange simultaneously on the sale of our £425000 apartment in Mile End on Tuesday in a week. The management company has quoted £348 for Certificate of Compliance, building insurance schedule and previous years statements of service charge. Is the landlord entitled to charge such fees for a leasehold conveyance in Mile End?
Mile End conveyancing on leasehold apartments more often than not involves the purchaser’s lawyer sending questions for the landlord to answer. Although the landlord is not legally bound to answer such questions the majority will be willing to assist. They are entitled charge a reasonable charge for answering questions or supplying documentation. There is no upper cap for such fees. The average costs for the information that you are referring to is over three hundred pounds, in some cases it exceeds £800. The management information fee required by the landlord must be accompanied by a summary of entitlements and obligations in respect of administration fees, otherwise the invoice is not strictly payable. Reality however dictates that one has no option but to pay whatever is requested of you should you wish to complete the sale of your home.
I have tried to negotiate informally with with my landlord for a lease extension without any joy. Can I apply to the Leasehold Valuation Tribunal? Can you recommend a Mile End conveyancing firm to act on my behalf?
You certainly can. We can put you in touch with a Mile End conveyancing firm who can help.
An example of a Freehold Enfranchisement decision for a Mile End property is 26 Rhondda Grove in June 2009. The net price payable by the leaseholders as determined by the Tribunal was £3,015.13. This comprised £11,300 premium for the reversion less £8,284.87 costs as ordered by the County Court.