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Questions and Answers: March leasehold conveyancing

I am on look out for some leasehold conveyancing in March. Before I get started I require certainty as to the unexpired term of the lease.

Assuming the lease is recorded at the land registry - and almost all are in March - then the leasehold title will always include the basic details of the lease, namely the date; the term; and the original parties. From a conveyancing perspective such details then enable any prospective buyer and lender to confirm that any lease they are looking at is the one relevant to that title.For any other purpose, such as confirming how long the term was granted for and calculating what is left, then the register should be sufficient on it's own.

My wife and I may need to let out our March 1st floor flat temporarily due to a new job. We used a March conveyancing practice in 2002 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?

A lease dictates relations between the freeholder and you the leaseholder; in particular, it will indicate if subletting is banned, or permitted but only subject to certain caveats. The accepted inference is that if the lease contains no specific ban or restriction, subletting is allowed. Most leases in March do not contain an absolute prevention of subletting – such a clause would undoubtedly devalue the flat. Instead, there is usually a basic requirement that the owner notifies the freeholder, possibly supplying a copy of the tenancy agreement.

I work for a busy estate agency in March where we have experienced a number of flat sales derailed due to leases having less than 80 years remaining. I have been given contradictory information from local March conveyancing firms. Could you shed some light as to whether the vendor of a flat can instigate the lease extension process for the purchaser on completion of the sale?

As long as 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. This means that the proposed purchaser need not have 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 before, or simultaneously with 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.

Can you offer any advice when it comes to choosing a March conveyancing firm to carry out our lease extension conveyancing?

If you are instructing a conveyancer for your lease extension (regardless if they are a March conveyancing practice) it is essential that they be familiar with the legislation and specialises in this area of work. We suggested that you make enquires with two or three firms including non March conveyancing practices prior to instructing a firm. Where the conveyancing practice is ALEP accredited then so much the better. Some following of questions could be of use:

  • If the firm is not ALEP accredited then why not?
  • What are the costs for lease extension conveyancing?

    • Can you provide any top tips for leasehold conveyancing in March with the aim of speeding up the sale process?

    • Much of the delay in leasehold conveyancing in March can be bypassed where you get in touch lawyers as soon as your agents start advertising the property and ask them to put together the leasehold information needed by the purchasers’ conveyancers.
    • If you have carried out any alterations to the residence would they have required Landlord’s permission? Have you, for example laid down wooden flooring? Most leases in March state that internal structural changes or addition of wooden flooring calls for a licence from the Landlord consenting to such alterations. Should you fail to have the approvals to hand do not communicate with the landlord without checking with your solicitor in advance.
  • A minority of March leases require Landlord’s consent to the sale and approval of the buyers. If this applies to your lease, it would be prudent to place the estate agents on notice to make sure that the purchasers put in hand financial (bank) and professional references. The bank reference will need to confirm that the buyers are able to meet the annual service charge and the actual amount of the service charge should be quoted in the bank’s letter. You will therefore need to provide your estate agents with the actual amount of the service charge so that they can pass this information on to the buyers or their lawyers.
  • If there is a history of conflict with your landlord or managing agents it is essential that these are settled before the property is marketed. The purchasers and their solicitors will be reluctant to purchase a property where there is an ongoing dispute. You may need to swallow your pride and discharge any arrears of service charge or settle the dispute prior to completion of the sale. It is therefore preferable to have any dispute settled ahead of the contract papers being issued to the buyers’ solicitors. You are still duty bound to disclose particulars of the dispute to the buyers, but it is clearly preferable to present the dispute as historic rather than unsettled.
  • You may think that you are aware of the number of years remaining on your lease but it would be wise to double-check by asking your solicitors. A buyer’s conveyancer will not be happy to advise their client to proceed with the purchase of a leasehold property the remaining number of years is below 80 years. It is therefore important at an early stage that you consider whether the lease term requires a lease extension. If it does, contact your solicitors before you put your premises on the market for sale.

    • I bought a split level flat in March, conveyancing was carried out 2000. Can you let me have an estimate of the premium that my landlord can legally expect in return for granting a renewal of my lease? Equivalent properties in March with an extended lease are worth £199,000. The average or mid-range amount of ground rent is £50 yearly. The lease ends on 21st October 2077

    With just 53 years left to run the likely cost is going to range between £29,500 and £34,000 plus legals.

    The suggested premium range that we have given is a general guide to costs for extending a lease, but we are not able to advice on the actual costs in the absence of detailed investigations. You should not use the figures in a Notice of Claim or as an informal offer. There are no doubt additional issues that need to be taken into account and you obviously should be as accurate as possible in your negotiations. You should not take any other action placing reliance on this information without first getting professional advice.

    Other Topics

    Lease Extensions in March