I am attracted to a couple of flats in Spitalfields which have approximately fifty years remaining on the lease term. Should I regard a short lease as a deal breaker?

A lease is a right to use the property for a period of time. As the lease shortens the value of the lease decreases and results in it becoming more costly to acquire a lease extension. This is why it is generally wise to increase the term of the lease. It is often difficult to sell a property with a short lease as mortgage companies less inclined to grant a loan on properties of this type. Lease extension can be a difficult process. We advise that you seek professional help from a conveyancer and surveyor with experience in this field

Last month I purchased a leasehold flat in Spitalfields. 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 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 employed by a reputable estate agent office in Spitalfields where we have experienced a number of leasehold sales jeopardised due to leases having less than 80 years remaining. I have received contradictory information from local Spitalfields conveyancing solicitors. Can you clarify whether the owner of a flat can commence the lease extension formalities for the buyer?

Provided that the seller has been the owner 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 buyer can avoid having to sit tight for 2 years for a lease extension. 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 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 purchaser.

All being well we will complete the disposal of our £150000 flat in Spitalfields on Thursday in a week. The managing agents has quoted £396 for Certificate of Compliance, building insurance schedule and 3 years statements of service charge. Is the landlord entitled to charge exorbitant fees for a leasehold conveyance in Spitalfields?

Spitalfields conveyancing on leasehold apartments often involves the buyer’s solicitor submitting questions for the landlord to answer. Although the landlord is under no legal obligation to respond to such questions the majority will be content to assist. They are entitled levy a reasonable charge for responding to enquiries or supplying documentation. There is no upper cap for such fees. The average fee for the paperwork that you are referring to is over three hundred pounds, in some transactions it is above £800. The administration charge required 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. In reality you have little option but to pay whatever is requested of you if you want to sell the property.

Notwithstanding our best efforts, we have been unsuccessful in trying to purchase the freehold in Spitalfields. Can the Leasehold Valuation Tribunal adjudicate on premiums?

if there is a missing landlord or if there is disagreement about the premium for a lease extension, under the relevant statutes it is possible to make an application to the LVT to calculate the price payable.

An example of a Freehold Enfranchisement decision for a Spitalfields residence is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case affected 41 flats. The the unexpired term as at the valuation date was 107 years.

What makes a Spitalfields lease defective?

There is nothing unique about leasehold conveyancing in Spitalfields. Most leases is drafted differently and legal mistakes in the legal wording can result in certain clauses are erroneous. For example, if your lease is missing any of the following, it could be defective:

• A provision to repair to or maintain elements 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 will likely cause problems when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. Yorkshire Building Society, The Royal Bank of Scotland, and Aldermore all have express requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease is defective they may refuse to grant the mortgage, forcing the buyer to withdraw.