I am hoping to put an offer on a small detached house that appears to be perfect, at a great figure which is making it more attractive. I have just been informed that it's a leasehold rather than freehold. I would have thought that there are particular concerns purchasing a house with a leasehold title in Upper Norwood. Conveyancing advisers have not yet been instructed. Will they explain the issues?

The majority of houses in Upper Norwood are freehold and not leasehold. This is one of the situations where having a local solicitor used to dealing with such properties who can assist with the conveyancing process. We note that you are purchasing in Upper Norwood so you should seriously consider looking for a Upper Norwood conveyancing solicitor and check that they are used to transacting on leasehold houses. As a matter of priority you will need to check the unexpired lease term. Being a lessee you will not be entirely free to do whatever you want with the house. The lease comes with conditions such as requiring the landlord’sconsent to conduct alterations. It may be necessary to pay a maintenance charge towards the maintenance of the communal areas where the property is located on an estate. Your solicitor should report to you on the legal implications.

I am looking at a couple of apartments in Upper Norwood which have in the region of forty five years unexpired on the leases. Will this present a problem?

There are no two ways about it. A leasehold apartment in Upper Norwood is a deteriorating asset as a result of the reducing lease term. The nearer the lease gets to zero years unexpired, the more it adversely affects the marketability of the property. For most buyers and mortgage companies, leases with under 75 years become less and less attractive. 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 premises 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 Upper Norwood conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending the lease You may find he or she is happy to negotiate informally and willing to consider your offer straight off, without having to involve anyone else. This will save you time and money and it could help you reach a lower price on the lease. 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've recently bought a leasehold property in Upper Norwood. Do I have any liability for service charges relating to a period prior to my ownership?

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 long established estate agency in Upper Norwood where we have experienced a few flat sales derailed due to leases having less than 80 years remaining. I have received conflicting advice from local Upper Norwood conveyancing firms. Please can you shed some light as to whether the vendor 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 prior to, or at the same time as completion of the disposal of the property.

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.

I have given up negotiating a lease extension in Upper Norwood. Can the Leasehold Valuation Tribunal adjudicate on premiums?

Most definitely. We are happy to put you in touch with a Upper Norwood conveyancing firm who can help.

An example of a Lease Extension matter before the tribunal for a Upper Norwood residence 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 affected 1 flat. The unexpired term was 26.38 years.

What makes a Upper Norwood lease unacceptable for security purposes?

Leasehold conveyancing in Upper Norwood is not unique. All leases are unique and drafting errors can result in certain sections are wrong. For example, if your lease is missing any of the following, it could be defective:

• A provision to repair to or maintain parts of the premises
• A duty to insure the building
• 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 will encounter a problem when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Birmingham Midshires, Virgin Money, and Barclays Direct all have express 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 defective they may refuse to grant the mortgage, obliging the purchaser to withdraw.

Other Topics

Lease Extensions in Upper Norwood