Questions and Answers: March leasehold conveyancing
Due to exchange soon on a ground floor flat in March. Conveyancing solicitors inform me that they are sending me a report next week. Are there areas in the report that I should be focusing on?
Your report on title for your leasehold conveyancing in March should include some of the following:
- Details of the parties to the lease, for example these could be the leaseholder (you), head lessor, landlord
Back In 2005, I bought a leasehold flat in March. Conveyancing and Barnsley Building Society mortgage went though with no issue. A letter has just been received from someone saying they have taken over the freehold. It included a ground rent demand for rent dating back to 1994. The conveyancing solicitor in March who acted for me is not around.Any advice?
First contact HMLR to be sure that the individual claiming to own the freehold is indeed the new freeholder. There is no need to instruct a March conveyancing practitioner to do this as it can be done on-line for a few pound. Rest assured that regardless, even if this is the legitimate landlord, under the Limitation Act 1980 the limitation period for recovery of ground rent is six years.
I am tempted by the attractive purchase price for a couple of apartments in March both have about fifty years unexpired on the leases. Will this present a problem?
There is no doubt about it. A leasehold apartment in March is a deteriorating asset as a result of the shortening lease. The nearer the lease gets to its expiry date, the more it adversely affects the salability of the property. For most purchasers and mortgage companies, leases with less than 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 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 March 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 work for a long established estate agent office in March where we have witnessed a number of leasehold sales jeopardised as a result of leases having less than 80 years remaining. I have received conflicting advice from local March conveyancing firms. Can you confirm whether the seller of a flat can commence the lease extension formalities for the purchaser on completion of the sale?
As long as the seller has owned the lease 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 wait 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment has to be done before, or at the same time as completion of the sale.
An alternative approach is 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 purchaser.
Can you provide any advice for leasehold conveyancing in March with the aim of expediting the sale process?
- A significant proportion of the frustration in leasehold conveyancing in March can be avoided if you instruct lawyers as soon as you market your property and ask them to put together the leasehold documentation needed by the buyers representatives.
- If you have carried out any alterations to the premises would they have required Landlord’s approval? Have you, for example laid down wooden flooring? March leases often stipulate that internal structural alterations or addition of wooden flooring require a licence from the Landlord acquiescing to such alterations. Should you dont have the consents to hand you should not communicate with the landlord without checking with your lawyer first.
March Conveyancing for Leasehold Flats - Examples of Queries before Purchasing
Does the lease contain onerous restrictions?
How is the lease structured?
Best to be warned whether fixing the lift or some other significant cost is pending to be shared amongst the tenants and will materially impact the level of the maintenance charges or necessitate a specific payment.