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South Hackney leasehold conveyancing: Q and A’s

My fiance and I may need to let out our South Hackney garden flat for a while due to taking a sabbatical. We instructed a South Hackney conveyancing practice in 2003 but they have closed and we did not have the foresight to get any guidance as to whether the lease permits subletting. How do we find out?

Your lease governs relations between the landlord and you the leaseholder; specifically, it will indicate if subletting is banned, or permitted but only subject to certain caveats. The rule is that if the lease contains no expres ban or restriction, subletting is allowed. Most leases in South Hackney do not contain strict prohibition on subletting – such a clause would adversely affect the market value the flat. In most cases there is simply a requirement that the owner notifies the freeholder, possibly supplying a copy of the tenancy agreement.

I have just started marketing my 2 bed apartment in South Hackney.Conveyancing lawyers have not yet been instructed but I have just received a quarterly service charge demand – should I leave it to the buyer to sort out?

The sensible thing to do is 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 managing agents will not acknowledge the buyer until 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 flat in South Hackney. Do I have any liability for service charges relating to a period prior to my ownership?

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. 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).

What are your top tips when it comes to finding a South Hackney conveyancing firm to carry out our lease extension conveyancing?

When appointing a property lawyer for lease extension works (regardless if they are a South Hackney conveyancing firm) it is imperative that he or she should be familiar with the legislation and specialises in this area of conveyancing. We suggested that you speak with several firms including non South Hackney conveyancing practices before you 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?
  • What are the costs for lease extension work?

  • Do you have any advice for leasehold conveyancing in South Hackney with the intention of saving time on the sale process?

    • A significant proportion of the delay in leasehold conveyancing in South Hackney can be reduced if you appoint lawyers as soon as your agents start advertising the property and ask them to collate the leasehold information needed by the purchasers’ conveyancers.
    • Some South Hackney leases require Licence to Assign from the landlord. If this is the case, you should place the estate agents on notice to make sure that the purchasers obtain financial (bank) and professional references. The bank reference should make it clear that the buyer is able to meet 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 service charge figures so that they can pass this information on to the purchasers or their solicitors.
  • If there is a history of any disputes with your landlord or managing agents it is very important that these are settled prior to the flat being put on the market. The purchasers and their solicitors will be nervous about purchasing a property where a dispute is unsettled. You will have to accept that you will have to discharge any arrears of service charge or settle the dispute prior to completion of the sale. 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 particulars of the dispute to the buyers, but it is clearly preferable to reveal the dispute as over rather than unsettled.
  • If you are supposed to have a share in the freehold, you should ensure that you hold the original share certificate. Obtaining a new share certificate can be a lengthy formality and delays many a South Hackney home move. If a duplicate share is required, you should approach the company officers or managing agents (where applicable) for this as soon as possible.
  • You may think that you are aware of the number of years remaining on your lease but you should verify this by asking your conveyancers. A buyer’s conveyancer will not be happy to advise their client to proceed with the purchase of a leasehold property the lease term is less than 80 years. In the circumstances it is important at an as soon as possible that you identify whether the lease term requires a lease extension. If it does, contact your solicitors before you put your premises on the market for sale.

  • Despite our best efforts, we have been unsuccessful in trying to purchase the freehold in South Hackney. Can the Leasehold Valuation Tribunal adjudicate on premiums?

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

    An example of a Freehold Enfranchisement decision for a South Hackney residence is 150 Amhurst Road in December 2013. The tribunal concluded that the premium to be paid by the applicant for the enfranchisement of the subject property was £43,500. This case affected 4 flats. The the number of years remaining on the existing lease(s) was 90 (or thereabouts).