Questions and Answers: Mitcham leasehold conveyancing
I am intending to sublet my leasehold apartment in Mitcham. Conveyancing solicitor who did the purchase is retired - so can't ask her. Do I need to ask my freeholder for permission?
A lease governs relations between the freeholder and you the flat owner; specifically, it will indicate if subletting is prohibited, or permitted but only subject to certain conditions. The rule is that if the lease contains no expres ban or restriction, subletting is permitted. Most leases in Mitcham do not contain subletting altogether – such a provision would undoubtedly devalue the flat. In most cases there is simply a requirement that the owner notifies the freeholder, possibly supplying a duplicate of the sublease.
My wife and I purchased a leasehold house in Mitcham. Conveyancing and Chelsea Building Society mortgage are in place. A letter has just been received from someone claiming to own the freehold. Attached was a ground rent demand for rent dating back to 1997. The conveyancing solicitor in Mitcham who acted for me is not around.What should I do?
The first thing you should do is make enquiries of HMLR to be sure that this person is indeed the registered owner of the freehold reversion. It is not necessary to instruct a Mitcham conveyancing firm to do this as you can do this on the Land Registry website for less than a fiver. You should note that regardless, even if this is the rightful freeholder, under the Limitation Act 1980 the limitation period for recovery of ground rent is six years.
I am looking at a couple of apartments in Mitcham which have in the region of 50 years unexpired on the leases. Will this present a problem?
There is no doubt about it. A leasehold flat in Mitcham is a wasting asset as a result of the reducing lease term. The nearer the lease gets to zero years unexpired, the more it adversely affects the salability of the premises. The majority of purchasers and mortgage companies, leases with less than eighty years become less and less marketable. 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 Mitcham 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 You may find he or she is happy to negotiate informally and willing to consider your offer straight off, without having to involve anyone else. This will save you time and money and it could help you reach a lower price on the lease. 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've recently bought a leasehold property in Mitcham. Am I liable to pay service charges for periods before my ownership?
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. However, your landlord may still be able to take action to forfeit the lease. A critical element of leasehold conveyancing for your conveyancer to be sure 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 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 Mitcham conveyancing firm to act on my behalf?
if there is a missing freeholder or where there is disagreement 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 determine the amount due.
An example of a Freehold Enfranchisement matter before the tribunal for a Mitcham residence is 50 & 52 Southcroft Road in September 2013. The tribunals own valuation determined that the premium payable should be £29,000 This case was in relation to 2 flats. The the unexpired term as at the valuation date was 86.11 and 60.64.
When it comes to leasehold conveyancing in Mitcham what are the most common lease problems?
There is nothing unique about leasehold conveyancing in Mitcham. Most leases are individual and drafting errors can sometimes mean that certain sections are not included. The following missing provisions could result in a defective lease:
- Repairing obligations to or maintain parts of the property
- 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 problems when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. Santander, The Royal Bank of Scotland, and Barclays Direct all have express requirements 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 provide security, obliging the buyer to withdraw.