Fixed-fee leasehold conveyancing in Melbourne:

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Common questions relating to Melbourne leasehold conveyancing

I am on look out for some leasehold conveyancing in Melbourne. Before I get started I want to be sure as to the unexpired term of the lease.

If the lease is recorded at the land registry - and 99.9% are in Melbourne - then the leasehold title will always include the short particulars 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.

Planning to exchange soon on a ground floor flat in Melbourne. Conveyancing solicitors inform me that they will have a report out to me on Monday. What should I be looking out for?

The report on title for your leasehold conveyancing in Melbourne should include some of the following:

  • You should receive a copy of the lease
  • The physical extent of the premises. This will be the flat itself but may include a loft or cellar if applicable.
  • Setting out your legal entitlements in respect of the communal areas in the building.By way of example, does the lease provide for a right of way over a path or hallways?
  • Does the lease prevent you from subletting the flat, or having a home office for business
  • Repair and maintenance of the flat
  • I don't know whether the lease allows me to alter or improve anything in the flat - you should know whether it applies to all alterations or just structural alteration, and whether consent is required
  • What you can do if a neighbour breach a clause of their lease? For a comprehensive list of information to be included in your report on your leasehold property in Melbourne please enquire of your solicitor in advance of your conveyancing in Melbourne

    • Last month I purchased a leasehold property in Melbourne. Do I have any liability for service charges for periods before my ownership?

    Where the service charge has already been demanded from the previous lessee and they have not paid you would not usually be personally liable for the arrears. Strange as it may seem, 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).

    Can you provide any advice for leasehold conveyancing in Melbourne from the perspective of expediting the sale process?

    • Much of the frustration in leasehold conveyancing in Melbourne can be bypassed where you instruct lawyers the minute your agents start marketing the property and request that they start to collate the leasehold documentation which will be required by the purchasers’ representatives.
    • Many freeholders or managing agents in Melbourne levy fees for providing management packs for a leasehold homes. You or your lawyers should discover the fee that they propose to charge. The management pack can be applied for as soon as you have a buyer, thus reducing delays. The typical amount of time it takes to receive management information is three weeks. It is the most common reason for delay in leasehold conveyancing in Melbourne.
  • A minority of Melbourne leases require Licence to Assign from the landlord. If this is the case, you should place the estate agents on notice to make sure that the purchasers obtain 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 service charge figures so that they can pass this information on to the purchasers or their lawyers.
  • If there is a history of any disputes with your landlord or managing agents it is very important that these are resolved before the property is put on the market. The buyers and their solicitors will be nervous about purchasing a property where there is an ongoing dispute. You may have to bite the bullet and discharge any arrears of service charge or resolve the dispute prior to the buyers completing the purchase. It is therefore preferable to have any dispute settled prior to the contract papers being issued to the buyers’ solicitors. You will still have to reveal details of the dispute to the buyers, but it is clearly preferable to present the dispute as historic as opposed to unsettled.
  • If you hold a share in a the Management Company, you should make sure that you have the original share document. Organising a duplicate share certificate can be a time consuming process and frustrates many a Melbourne conveyancing deal. If a new share is needed, you should approach the company director and secretary or managing agents (where relevant) for this as soon as possible.

    • In relation to leasehold conveyancing in Melbourne what are the most common lease problems?

    Leasehold conveyancing in Melbourne is not unique. All leases are unique and legal mistakes in the legal wording can sometimes mean that certain provisions are erroneous. For example, if your lease is missing any of the following, it could be defective:

    • Repairing obligations to or maintain elements of the premises
    • Insurance obligations
    • A provision for the recovery of money spent for the benefit of another party.
    • Service charge per centages that don't add up correctly leaving a shortfall

    You could encounter a problem 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, Coventry Building Society, and Platform Home Loans Ltd all have very detailed requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease is defective they may refuse to grant the mortgage, obliging the buyer to pull out.

    Melbourne Conveyancing for Leasehold Flats - A selection of Queries Prior to buying

      Are any of leasehold owners in arrears of their service charge payments? Best to be warned if changing the roof or some other significant cost is anticipated to be shared amongst the tenants and will dramatically increase the the service costs or necessitate a specific invoice. How is the lease structured?

    Other Topics

    Lease Extensions in Melbourne