Questions and Answers: Shadwell leasehold conveyancing
I've found a house that seems to meet my requirements, at a reasonable figure which is making it more attractive. I have just discovered that it's a leasehold as opposed to freehold. I would have thought that there are particular concerns purchasing a leasehold house in Shadwell. Conveyancing lawyers have are soon to be appointed. Will they explain the issues?
The majority of houses in Shadwell are freehold rather than leasehold. In this scenario it’s worth having a local conveyancer who is familiar with the area can assist with the conveyancing process. We note that you are purchasing in Shadwell in which case you should be looking for a Shadwell conveyancing solicitor and check that they are used to transacting on leasehold houses. As a matter of priority you will need to check the number of years remaining. As a leaseholder you will not be at liberty to do whatever you want with the house. The lease comes with conditions such as requiring the landlord’spermission to conduct changes to the property. It may be necessary to pay a contribution towards the upkeep of the estate where the property is part of an estate. Your lawyer will advise you fully on all the issues.
I've recently bought a leasehold house in Shadwell. Am I liable to pay service charges for periods before completion of my purchase?
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 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 work for a reputable estate agency in Shadwell where we have witnessed a number of leasehold sales derailed as a result of leases having less than 80 years remaining. I have been given conflicting advice from local Shadwell conveyancing firms. Can you clarify whether the seller of a flat can commence the lease extension formalities 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 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 need not have to wait 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed before, or at the same time as completion of the sale.
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.
Our conveyancer has advised that he intends to complete and exchange simultaneously on the disposal of our £275000 apartment in Shadwell next week. The freeholder has quoted £396 for Certificate of Compliance, building insurance schedule and previous years service charge statements. Is it legal for a freeholder to charge an administration fee for a flat conveyance in Shadwell?
Shadwell conveyancing on leasehold maisonettes more often than not involves the buyer’s solicitor submitting questions for the landlord to address. Although the landlord is under no legal obligation to answer such questions most will be content to do so. They are entitled charge a reasonable charge for answering enquiries 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 administration charge demanded by the landlord must be sent together with a summary of rights and obligations in relation to administration charges, without which the charge is technically not due. Reality however dictates that one has no choice but to pay whatever is demanded if you want to exchange contracts with the buyer.
Following years of dialogue we simply can't agree with our landlord on how much the lease extension should cost for our flat in Shadwell. Can we issue an application to the Residential Property Tribunal Service?
if there is a absentee freeholder or where there is dispute about what the lease extension should cost, under the Leasehold Reform, Housing and Urban Development Act 1993 it is possible to make an application to the LVT to calculate the price payable.
An example of a Freehold Enfranchisement matter before the tribunal for a Shadwell residence is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case related to 3 flats. The unexpired term was 101.61 years.
What makes a Shadwell lease unmortgageable?
Leasehold conveyancing in Shadwell is not unique. All leases are individual and drafting errors can sometimes mean that certain provisions are not included. The following missing provisions could result in a defective lease:
- Repairing obligations to or maintain elements 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
A defective lease can cause problems when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. Santander, Barnsley Building Society, and Godiva Mortgages Ltd all have very detailed 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 purchaser to pull out.