Fixed-fee leasehold conveyancing in Morden:

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Morden leasehold conveyancing: Q and A’s

I have just appointed agents to market my basement flat in Morden.Conveyancing lawyers have not yet been instructed but I have just received a half-yearly service charge invoice – what should I do?

Your conveyancing lawyer is likely to suggest that you should pay 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. This will smooth the conveyancing process.

I've recently bought a leasehold house in Morden. Do I have any liability for service charges relating to a period prior to my ownership?

In a situation where the service charge has already been demanded from the previous lessee 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 employed by a busy estate agent office in Morden where we see a number of flat sales put at risk as a result of short leases. I have been given conflicting advice from local Morden conveyancing firms. Could you confirm whether the owner of a flat can commence the lease extension formalities 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 start 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 sale.

Alternatively, it may be possible 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 buyer.

Do you have any advice for leasehold conveyancing in Morden from the point of view of saving time on the sale process?

  • A significant proportion of the delay in leasehold conveyancing in Morden can be reduced where you instruct lawyers as soon as your agents start advertising the property and ask them to collate the leasehold documentation which will be required by the purchasers’ solicitors.
  • Many freeholders or Management Companies in Morden levy fees for providing management packs for a leasehold property. You or your lawyers should enquire as to the fee that they propose to charge. The management information sought as soon as you have a buyer, thus accelerating the process. The average time it takes to receive management information is three weeks. It is the most common cause of frustration in leasehold conveyancing in Morden.
  • A minority of Morden leases require Licence to Assign from the landlord. If this applies to your lease, it would be prudent to notify your estate agents to make sure that the purchasers obtain 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 actual amount of the service charge so that they can pass this information on to the buyers or their solicitors.
  • If you have had any disputes with your freeholder or managing agents it is essential that these are settled prior to the flat being put on the market. The buyers and their solicitors will be nervous about purchasing a flat where there is an ongoing dispute. You may need to swallow your pride and pay any arrears of service charge or settle the dispute prior to the buyers completing the purchase. It is therefore preferable to have any dispute settled ahead of the contract papers being issued to the buyers’ solicitors. You will still have to reveal details of the dispute to the purchasers, but it is clearly preferable to reveal the dispute as historic rather than unresolved.
  • If you hold a share in a the freehold, you should make sure that you hold the original share document. Arranging a re-issued share certificate can be a lengthy process and frustrates many a Morden conveyancing deal. If a duplicate share is necessary, do contact the company officers or managing agents (where applicable) for this at the earliest opportunity.

    • I am the leaseholder of a a ground floor purpose built flat in Morden. Given that I can not reach agreement with the freeholder, can the Leasehold valuation Tribunal determine the premium due for a lease extension?

    in cases where there is a missing landlord or where there is disagreement about the premium for a lease extension, under the relevant legislation it is possible to make an application to the First-tier Tribunal (Property Chamber) to calculate the price.

    An example of a Lease Extension case for a Morden flat is 14 Nutwell Street in January 2014. The premium payable for the acquisition of a new lease of the subject premises was in the sum of £30,523 This case related to 1 flat. The unexpired term was 62.94 years.

    When it comes to leasehold conveyancing in Morden what are the most frequent lease problems?

    There is nothing unique about leasehold conveyancing in Morden. Most leases are unique and drafting errors can sometimes mean that certain sections are not included. For example, if your lease is missing any of the following, it could be defective:

    • Repairing obligations to or maintain parts of the premises
    • Insurance obligations
    • Clauses dealing with recovering service charges for expenditure on the building or common parts.
    • Maintenance charge proportions which don’t add up to the correct percentage

    You may have a problem when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. Accord Mortgages Ltd, Leeds Building Society, and Godiva Mortgages Ltd all have very detailed conveyancing instructions 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 grant the mortgage, obliging the buyer to withdraw.

    Other Topics

    Lease Extensions in Morden