Top Five Questions relating to South Norwood leasehold conveyancing
Due to sign contracts shortly on a leasehold property in South Norwood. Conveyancing lawyers have said that they report fully next week. What should I be looking out for?
Your report on title for your leasehold conveyancing in South Norwood should include some of the following:
- You should receive a copy of the lease
I am looking at a couple of maisonettes in South Norwood which have in the region of 50 years unexpired on the lease term. Will this present a problem?
There are plenty of short leases in South Norwood. The lease is a right to use the property for a period of time. As the lease gets shorter the marketability of the lease deteriorate and it becomes more costly to acquire a lease extension. For this reason it is often a good idea to increase the term of the lease. Sometimes it is difficult to sell a property with a short lease as mortgage lenders less inclined to grant a loan on such properties. Lease enfranchisement can be a protracted process. We advise that you get professional help from a conveyancer and surveyor with experience in this arena
I've recently bought a leasehold flat in South Norwood. Am I liable to pay service charges for periods before completion of my purchase?
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. It is an essential part 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 am a negotiator for a reputable estate agent office in South Norwood where we see a number of leasehold sales derailed due to short leases. I have received contradictory information from local South Norwood conveyancing firms. Can you shed some light as to whether the owner of a flat can instigate the lease extension formalities for the purchaser on completion of the sale?
As long as 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. This means that the buyer can avoid having 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 simultaneously with completion of the disposal of the property.
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 purchaser.
Do you have any top tips for leasehold conveyancing in South Norwood from the point of view of saving time on the sale process?
- Much of the delay in leasehold conveyancing in South Norwood can be bypassed if you get in touch lawyers as soon as your agents start marketing the property and ask them to collate the leasehold information needed by the purchasers’ conveyancers.
- Some South Norwood 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 put in hand financial (bank) and professional references. Any bank reference should make it clear that the buyer is able to meet the yearly 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.
Despite our best endeavours, we have been unsuccessful in seeking a lease extension in South Norwood. Can this matter be resolved via the Leasehold Valuation Tribunal?
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 First-tier Tribunal (Property Chamber) to calculate the amount due.
An example of a Lease Extension matter before the tribunal for a South Norwood flat is Flats 55, 67 & 70 Melbourne Court Anerley Road in July 2013. The tribunal calculated that the premium for the extended lease at £48,366.00 for at 55, and £88,329.00 for ats 67 and 70 combined. This case was in relation to 1 flat. The the number of years remaining on the existing lease(s) was 26.38 years.