Common questions relating to Mid Wales leasehold conveyancing
Estate agents have just been given the go-ahead to market my garden apartment in Mid Wales.Conveyancing is yet to be initiated but I have just had a yearly service charge demand – Do I pay up?
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 managing agents will not acknowledge the buyer unless 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. Having a clear account will assist your cause and will leave you no worse off financially.
Last month I purchased a leasehold flat in Mid Wales. Do I have any liability for service charges relating to a period prior to my ownership?
Where the service charge has already been demanded from the previous owner and they have not paid you would not usually be personally liable for the arrears. However, 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 agency in Mid Wales where we have witnessed a few leasehold sales derailed due to short leases. I have been given inconsistent advice from local Mid Wales conveyancing firms. Please can you shed some light as to whether the vendor of a flat can instigate the lease extension formalities for the buyer?
As long as the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to kick-start the lease extension process and assign the benefit of the notice to the purchaser. This means that the buyer 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 prior to, 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 purchaser.
We expect to complete the disposal of our £250000 apartment in Mid Wales in just under a week. The managing agents has quoted £312 for Certificate of Compliance, insurance certificate and previous years service charge statements. Is it legal for a freeholder to charge an administration fee for a leasehold conveyance in Mid Wales?
Mid Wales conveyancing on leasehold flats often involves the purchaser’s conveyancer sending enquiries for the landlord to answer. Although the landlord is not legally bound to answer such questions the majority will be content to assist. They may invoice a reasonable administration fee for responding to enquiries or supplying documentation. There is no upper cap for such fees. The average costs for the paperwork that you are referring to is £350, in some situations it is above £800. The administration charge required by the landlord must be sent together with a synopsis of rights and obligations in respect of administration fees, otherwise the invoice is technically not due. In reality one has little option but to pay whatever is demanded if you want to exchange contracts with the buyer.
What makes a Mid Wales lease unmortgageable?
There is nothing unique about leasehold conveyancing in Mid Wales. Most leases are unique and drafting errors can result in certain clauses are erroneous. The following missing provisions could result in a defective lease:
- Repairing obligations to or maintain elements of the building
- A duty to insure the building
- Clauses dealing with recovering service charges for expenditure on the building or common parts.
- Maintenance charge proportions which don’t add up to the correct percentage
A defective lease will likely cause problems when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. Lloyds TSB Bank, Coventry Building Society, and Nottingham Building Society 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, forcing the purchaser to pull out.
I bought a 1st floor flat in Mid Wales, conveyancing was carried out in 2007. Can you shed any light on how much the price could be for a 90 year extension to my lease? Comparable properties in Mid Wales with over 90 years remaining are worth £260,000. The ground rent is £50 invoiced annually. The lease terminates on 21st October 2103
With 78 years left to run the likely cost is going to range between £11,400 and £13,200 plus professional fees.
The figure that we have given is a general guide to costs for extending a lease, but we are not able to provide the actual costs in the absence of detailed due diligence. You should not use the figures in tribunal or court proceedings. There may be additional issues that need to be considered and clearly you want to be as accurate as possible in your negotiations. Neither should you move forward based on this information before seeking the advice of a professional.
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