I have just started marketing my basement apartment in Mersea Island.Conveyancing is yet to be initiated but I have just received a yearly maintenance charge invoice – what should I do?

The sensible thing to do is discharge the service charge as normal because all ground rent and service charges will be apportioned on completion, so you will be reimbursed by the buyer for the period running from after the completion date to the next payment date. Most management companies will not acknowledge the buyer until the service charges have been paid and are up to date so it is important for both buyer and seller for the seller to show that they are up to date. This will smooth the conveyancing process.

I am looking at a couple of flats in Mersea Island both have about 50 years unexpired on the leases. Should I regard a short lease as a deal breaker?

There is no doubt about it. A leasehold flat in Mersea Island is a deteriorating asset as a result of the shortening lease. The closer the lease gets to zero years unexpired, the more it adversely affects the marketability of the property. The majority of buyers and banks, leases with under 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 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 a residence 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 Mersea Island 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 They may agree to a smaller lump sum and an increase in the ground rent, but to shorter extension terms in return. 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.

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

In a situation 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).

I am a negotiator for a long established estate agent office in Mersea Island where we have witnessed a few flat sales derailed as a result of leases having less than 80 years remaining. I have been given contradictory information from local Mersea Island conveyancing firms. Could you confirm whether the owner of a flat can initiate the lease extension process 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 commence the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the buyer need not have to sit tight for 2 years for a lease extension. 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.

Alternatively, it may be possible 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 buyer.

What makes a Mersea Island lease defective?

There is nothing unique about leasehold conveyancing in Mersea Island. Most leases are individual and legal mistakes in the legal wording can result in certain sections are erroneous. The following missing provisions could result in a defective lease:

• Repairing obligations to or maintain parts of the building
• Insurance obligations
• Clauses dealing with recovering service charges for expenditure on the building or common parts.
• Service charge per centages that don't add up correctly leaving a shortfall

A defective lease will likely cause problems when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. HSBC Bank, Virgin Money, and Godiva Mortgages 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 problematic they may refuse to grant the mortgage, forcing the purchaser to withdraw.

Mersea Island Leasehold Conveyancing - Sample of Questions you should consider before Purchasing

Who takes charge for maintaining and repairing the block? How many years remain on the lease? Please note that where the lease has less than eighty years it will have adverse implications on the value of the property. It is worth checking with your mortgage company that they are happy with residual term of the lease. Leases with less than 80 years remaining means that you will most likely have to extend the lease at some point and it is worth discovering what this would cost. Remember, in most cases you will be be obliged to have been the owner of the premises for a couple of years before you are eligible to extend the lease.

Other Topics

Lease Extensions in Mersea Island