Frequently asked questions relating to South Tottenham leasehold conveyancing
I am tempted by the attractive purchase price for a two flats in South Tottenham both have in the region of forty five years left on the leases. Will this present a problem?
There are no two ways about it. A leasehold apartment in South Tottenham is a wasting asset as a result of the shortening lease. The nearer the lease gets to zero years unexpired, the more it reduces the marketability of the premises. For most buyers and lenders, leases with less than 75 years become less and less marketable. On a more upbeat note, leaseholders can extend their leases by serving a Section 42 Notice. One stipulation is that they must have owned the property 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 property 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 South Tottenham conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. More often than not it is possible to negotiate informally with the freeholder to extend the lease They may agree to a smaller lump sum and an increase in the ground rent, but to shorter extension terms in return. 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.
Last month I purchased a leasehold property in South Tottenham. Do I have any liability for service charges for periods before 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. However, 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 busy estate agent office in South Tottenham where we have witnessed a few leasehold sales jeopardised due to leases having less than 80 years remaining. I have been given conflicting advice from local South Tottenham conveyancing solicitors. Please can you confirm whether the vendor 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 kick-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 for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed before, or simultaneously with 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 purchaser.
All being well we will complete the sale of our £250000 flat in South Tottenham in just under a week. The freeholder has quoted £360 for Certificate of Compliance, insurance certificate and previous years service charge statements. Is it legal for a freeholder to charge such fees for a flat conveyance in South Tottenham?
South Tottenham conveyancing on leasehold flats usually requires the buyer’s conveyancer submitting enquiries for the landlord to address. Although the landlord is not legally bound to address such questions most will be willing to do so. They may invoice a reasonable charge for answering questions or supplying documentation. There is no upper cap for such fees. The average fee for the information that you are referring to is £350, in some situations it is above £800. The management information fee invoiced by the landlord must be accompanied by a synopsis of rights and obligations in respect of administration fees, without which the charge is not strictly payable. Reality however dictates that you have little choice but to pay whatever is requested of you if you want to exchange contracts with the buyer.
My wife and I have hit a brick wall in trying to purchase the freehold in South Tottenham. Can the Leasehold Valuation Tribunal adjudicate on premiums?
if there is a missing freeholder or if there is disagreement about the premium for a lease extension, under the relevant legislation you can apply to the First-tier Tribunal (Property Chamber) to determine the amount due.
An example of a Freehold Enfranchisement case for a South Tottenham residence is 22 Wakefield Road in January 2012. Following a vesting order Clerkenwell and Shoreditch County Court under section 26 of the Leasehold Reform,Housing and Urban Development Act 1993 on 9th May 2011 the Tribunal decided that the price that the Applicant for the freehold interest should pay is £17,400 This case related to 2 flats. The the unexpired term as at the valuation date was 74.13 years.
In relation to leasehold conveyancing in South Tottenham what are the most common lease problems?
There is nothing unique about leasehold conveyancing in South Tottenham. All leases is drafted differently and legal mistakes in the legal wording can result in certain sections are missing. The following missing provisions could result in a defective lease:
- A provision to repair to or maintain parts of the property
- A duty to insure the building
- Clauses dealing with recovering service charges for expenditure on the building or common parts.
- Service charge per centages that don't add up correctly leaving a shortfall
You will have difficulties when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Santander, Bank of Scotland, and Barclays Direct 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, obliging the purchaser to pull out.