Top Five Questions relating to Soho leasehold conveyancing
Having checked my lease I have discovered that there are only Fifty years unexpired on my flat in Soho. I now wish to get lease extension but my freeholder is absent. What should I do?
If you meet the appropriate requirements, under the Leasehold Reform, Housing and Urban Development Act 1993 you can apply to the County Court for an order to dispense with the service of the initial notice. This will enable the lease to be granted an extra 90 years by the Court. However, you will be required to prove that you have used your best endeavours to find the lessor. In some cases a specialist would be useful to try and locate and to produce an expert document to be used as proof that the freeholder is indeed missing. It is wise to seek advice from a property lawyer in relation to devolving into the landlord’s absence and the application to the County Court covering Soho.
I am looking at a couple of maisonettes in Soho both have approximately 50 years remaining on the lease term. Will this present a problem?
There are no two ways about it. A leasehold apartment in Soho is a deteriorating asset as a result of the shortening lease. The closer the lease gets to zero years unexpired, the more it reduces the salability of the property. The majority of purchasers and mortgage companies, leases with under 75 years become less and less attractive. 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 premises 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 premises 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 Soho conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending 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 any new 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 am employed by a reputable estate agent office in Soho where we have witnessed a number of flat sales put at risk due to short leases. I have been given contradictory information from local Soho conveyancing firms. Could you confirm whether the owner of a flat can initiate the lease extension process for the purchaser on completion of the sale?
Provided that the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to commence 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 prior to, or at the same time as completion of the disposal of the property.
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 buyer.
Do you have any top tips for leasehold conveyancing in Soho from the point of view of saving time on the sale process?
- A significant proportion of the delay in leasehold conveyancing in Soho can be bypassed if you get in touch lawyers the minute your agents start advertising the property and ask them to collate the leasehold documentation which will be required by the buyers lawyers.
- In the event that you altered the property did you need the Landlord’s approval? In particular have you laid down wooden flooring? Most leases in Soho state that internal structural changes or laying down wooden flooring calls for a licence issued by the Landlord acquiescing to such changes. If you dont have the paperwork in place you should not contact the landlord without contacting your conveyancer in the first instance.
I have had difficulty in trying to purchase the freehold in Soho. Can the Leasehold Valuation Tribunal adjudicate on premiums?
Most certainly. We can put you in touch with a Soho conveyancing firm who can help.
An example of a Freehold Enfranchisement case for a Soho flat is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case was in relation to 1 flat. The remaining number of years on the lease was 73.26 years.
What are the common deficiencies that you witness in leases for Soho properties?
Leasehold conveyancing in Soho is not unique. Most leases are unique and legal mistakes in the legal wording can result in certain sections are wrong. For example, if your lease is missing any of the following, it could be defective:
- A provision to repair to or maintain parts of the building
- Insurance obligations
- A provision for the recovery of money spent for the benefit of another party.
- Maintenance charge proportions which don’t add up to the correct percentage
A defective lease can cause issues when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. Barclays , The Royal Bank of Scotland, and Britannia 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 problematic they may refuse to provide security, forcing the buyer to pull out.