Fixed-fee leasehold conveyancing in Melbourne:

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Recently asked questions relating to Melbourne leasehold conveyancing

Harry (my fiance) and I may need to rent out our Melbourne 1st floor flat temporarily due to a career opportunity. We instructed a Melbourne conveyancing practice in 2004 but they have since shut and we did not think at the time get any advice as to whether the lease allows us to sublet. How do we find out?

The lease dictates relations 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 rule is that if the lease contains no specific ban or restriction, subletting is permitted. Most leases in Melbourne do not contain subletting altogether – 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.

There are only 72 years unexpired on my lease in Melbourne. I now want to get lease extension but my landlord is absent. What should I do?

If you qualify, under the Leasehold Reform, Housing and Urban Development Act 1993 you can apply to the County Court for an order to dispense with the service of the initial notice. This will mean that your lease can be granted an extra 90 years by the Court. You will be obliged to demonstrate that you have used your best endeavours to locate the landlord. In some cases a specialist would be useful to carry out a search and prepare a report to be accepted by the court as proof that the landlord can not be located. It is advisable to get professional help from a solicitor both on investigating the landlord’s absence and the application to the County Court covering Melbourne.

I am tempted by the attractive purchase price for a couple of apartments in Melbourne which have in the region of fifty years remaining on the leases. should I be concerned?

There is no doubt about it. A leasehold flat in Melbourne is a wasting asset as a result of the reducing lease term. The closer the lease gets to zero years unexpired, the more it reduces the marketability of the property. For most buyers and mortgage companies, leases with under 75 years become less and less attractive. On a more positive 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 Melbourne 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 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.

I work for a reputable estate agent office in Melbourne where we see a number of flat sales jeopardised due to short leases. I have been given conflicting advice from local Melbourne conveyancing firms. Can you confirm whether the vendor of a flat can start the lease extension process 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 commence 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 wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed before, or at the same time as completion of the sale.

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 purchaser.

Completion in due on the sale of our £450000 garden flat in Melbourne in just under a week. The managing agents has quoted £300 for Landlord’s certificate, building insurance schedule and previous years service charge statements. Is it legal for a freeholder to charge such fees for a leasehold conveyance in Melbourne?

For most leasehold sales in Melbourne conveyancing will involve, questions about the management of a building inevitably needing to be answered directly by the freeholder or its agent, this includes :

  • Addressing pre-contract questions
  • Where consent is required before sale in Melbourne
  • Copies of the building insurance and schedule
  • Deeds of covenant upon sale
  • Registering of the assignment of the change of lessee after a sale
Your solicitor will have no control over the level of the charges for this information but the average costs for the information for Melbourne leasehold property is £350. For Melbourne conveyancing transactions it is customary for the seller to pay for these costs. The landlord or their agents are under no legal obligation to answer such questions most will be willing to do so - albeit often at exorbitant prices where the fees bear little relation to the work involved. Unfortunately there is no law that requires fixed charges for administrative tasks. Neither is there any legal time frame by which they are required to provide the information.

Melbourne Conveyancing for Leasehold Flats - Examples of Questions you should consider before Purchasing

    Please note if it is no more than 80 years it will affect the value of the flat. Check with your lender that they are happy with the length of the lease. Leases with fewer than 80 years remaining means that you will almost definitely require a lease extension at some point and you need to have some idea of what this would cost. For most Melbournelease extensions you would be required to have owned the property for two years in order to be entitled to extend the lease. The best form of lease arrangement is if the freehold reversion is in the ownership of the leaseholders. In this arrangement the leaseholders have being in charge if their destiny and even though a managing agent is frequently retained if it is bigger than a house conversion, the managing agent acts for the leaseholders themselves. What is the service charge and ground rent on the property?

Other Topics

Lease Extensions in Melbourne