Common questions relating to Luton leasehold conveyancing
Expecting to exchange soon on a leasehold property in Luton. Conveyancing lawyers inform me that they report fully tomorrow. What should I be looking out for?
The report on title for your leasehold conveyancing in Luton should include some of the following:
- Details of the parties to the lease, for example these could be the leaseholder (you), head lessor, freeholder
I own a leasehold house in Luton. Conveyancing and Halifax mortgage organised. A letter has just been received from someone saying they have taken over the reversionary interest in the property. Attached was a ground rent demand for rent dating back to 1998. The conveyancing practitioner in Luton who previously acted has long since retired.Any advice?
First contact the Land Registry to make sure that this person is indeed the registered owner of the freehold reversion. You do not need to incur the fees of a Luton conveyancing lawyer to do this as you can do this on the Land Registry website for less than a fiver. You should note that regardless, even if this is the legitimate freeholder, under the Limitation Act 1980 the limitation period for recovery of ground rent is six years.
I am attracted to a couple of flats in Luton both have approximately fifty years unexpired on the lease term. Will this present a problem?
There are no two ways about it. A leasehold apartment in Luton is a deteriorating asset as a result of the shortening lease. The closer the lease gets to zero years unexpired, the more it reduces the salability of the premises. The majority of purchasers and mortgage companies, 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 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 Luton 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 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 house in Luton. Am I liable to pay 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. 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 work for a long established estate agency in Luton where we have experienced a few leasehold sales put at risk due to short leases. I have been given conflicting advice from local Luton conveyancing firms. Could you shed some light as to whether the owner of a flat can instigate 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 start the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the proposed purchaser can avoid having to sit tight for 2 years to extend their lease. 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 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 buyer.
Leasehold Conveyancing in Luton - A selection of Queries before buying
Does the lease include onerous restrictions?
It is important to be aware if changing the roof or some other significant cost is anticipated that will be shared amongst the tenants and will dramatically impact the level of the service costs or result in a specific payment.
If a Luton lease has fewer than eighty years it will impact the value of the flat. Check with your bank that they are content with the length of the lease. A short lease means that you will most likely have to extend the lease sooner rather than later and it is worth finding out what this will be. For most Lutonlease extensions you will be required to have owned the residence for a couple of years before you are entitled to carry out a lease extension.