Questions and Answers: The Hyde leasehold conveyancing
Helen (my wife) and I may need to rent out our The Hyde basement flat for a while due to a new job. We used a The Hyde conveyancing firm in 2004 but they have closed and we did not think at the time get any guidance as to whether the lease permits subletting. How do we find out?
The lease governs the relationship between the freeholder and you the leaseholder; in particular, it will set out if subletting is banned, or permitted but only subject to certain conditions. The rule is that if the lease contains no expres ban or restriction, subletting is permitted. Most leases in The Hyde do not prevent subletting altogether – such a provision would undoubtedly devalue the flat. In most cases there is a basic requirement that the owner notifies the freeholder, possibly supplying a duplicate of the sublease.
I am looking at a couple of flats in The Hyde which have approximately fifty years left on the lease term. Should I regard a short lease as a deal breaker?
There is no doubt about it. A leasehold flat in The Hyde is a deteriorating asset as a result of the reducing lease term. The nearer the lease gets to its expiry date, the more it adversely affects the value of the property. The majority of purchasers and lenders, leases with less than 75 years become less and less marketable. 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 a residence 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 The Hyde 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 the agreed 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 work for a long established estate agent office in The Hyde where we see a number of leasehold sales derailed due to short leases. I have been given inconsistent advice from local The Hyde conveyancing firms. Can you shed some light as to whether the owner of a flat can initiate the lease extension formalities for the buyer?
As long as 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. This means that the proposed purchaser need not have 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 prior to, or simultaneously with completion of the sale.
Alternatively, it may be possible to agree the lease extension with the freeholder 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.
What are your top tips when it comes to finding a The Hyde conveyancing practice to deal with our lease extension?
When appointing a conveyancer for your lease extension (regardless if they are a The Hyde conveyancing firm) it is most important that they be familiar with the legislation and specialises in this area of work. We advise that you speak with two or three firms including non The Hyde conveyancing practices prior to instructing a firm. If the firm is ALEP accredited then that’s a bonus. Some following of questions might be useful:
- How experienced is the practice with lease extension legislation?
We have reached the end of our tether in trying to reach an agreement for a lease extension in The Hyde. Can the Leasehold Valuation Tribunal adjudicate on premiums?
in cases where there is a absentee 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 LVT to decide the premium.
An example of a Lease Extension case for a The Hyde premises is First Floor Flat 61 Wilberforce Road in March 2014. The premium payable was £10,130 and the case was remitted back to the Willesden County Court to effect the Vesting Order (Claim No 3W103100). This case affected 1 flat. The remaining number of years on the lease was 71 years.
Are there common problems that you witness in leases for The Hyde properties?
There is nothing unique about leasehold conveyancing in The Hyde. Most leases are unique and legal mistakes in the legal wording can result in certain provisions are wrong. For example, if your lease is missing any of the following, it could be defective:
- Repairing obligations 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
You could encounter difficulties when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. Yorkshire Building Society, Chelsea Building Society, and Platform Home Loans Ltd all have express conveyancing instructions when it comes to what is expected in a lease. If a mortgage lender believes that the lease does not cover certain provisions they may refuse to provide security, forcing the purchaser to withdraw.