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Common questions relating to Whitechapel leasehold conveyancing

I am intending to sublet my leasehold apartment in Whitechapel. Conveyancing solicitor who did the purchase is retired - so can't ask him. Do I need to ask my freeholder for permission?

A lease governs the relationship between the freeholder and you the flat owner; specifically, it will indicate if subletting is not allowed, or permitted but only subject to certain conditions. The accepted inference is that if the lease contains no expres ban or restriction, subletting is allowed. The majority of leases in Whitechapel do not prevent an absolute prevention of subletting – such a clause would undoubtedly devalue the flat. In most cases there is simply a requirement that the owner notifies the freeholder, possibly sending a copy of the sublease.

I am tempted by the attractive purchase price for a two apartments in Whitechapel which have about forty five years remaining on the leases. Should I regard a short lease as a deal breaker?

There is no doubt about it. A leasehold flat in Whitechapel is a wasting asset as a result of the shortening lease. The nearer the lease gets to zero years unexpired, the more it adversely affects the marketability of the premises. The majority of purchasers and lenders, leases with less than eighty 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 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 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 Whitechapel 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 flat in Whitechapel. Do I have any liability for service charges for periods before completion of my purchase?

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. It is an essential part of leasehold conveyancing for your conveyancer to ensure 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 Whitechapel where we see a few flat sales jeopardised as a result of short leases. I have received inconsistent advice from local Whitechapel conveyancing firms. Please can you shed some light as to whether the vendor of a flat can start the lease extension formalities for the purchaser on completion of the sale?

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. 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 has to be done 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.

After months of dialogue we cannot agree with our landlord on how much the lease extension should cost for our flat in Whitechapel. Can we issue an application to the Residential Property Tribunal Service?

in cases where there is a missing freeholder or if there is disagreement about what the lease extension should cost, under the relevant statutes it is possible to make an application to the Leasehold Valuation Tribunal to calculate the amount due.

An example of a Freehold Enfranchisement decision for a Whitechapel property 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 was in relation to 41 flats. The unexpired lease term was 107 years.

In relation to leasehold conveyancing in Whitechapel what are the most frequent lease problems?

There is nothing unique about leasehold conveyancing in Whitechapel. Most leases are individual 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:

  • 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 as they can affect a potential buyer’s ability to obtain a mortgage. Accord Mortgages Ltd, Virgin Money, and Bank of Ireland 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, obliging the buyer to withdraw.