Common questions relating to Newcastle upon Tyne leasehold conveyancing
I am looking at a two apartments in Newcastle upon Tyne both have in the region of 50 years left on the lease term. Will this present a problem?
A lease is a right to use the property for a period of time. As a lease gets shorter the value of the lease decreases and results in it becoming more expensive to extend the lease. This is why it is often a good idea to extend the lease term. Sometimes it is difficult to sell a property with a short lease because mortgage companies may be unwilling to lend money on properties of this type. Lease enfranchisement can be a difficult process. We advise that you get professional assistance from a solicitor and surveyor with experience in this field
Last month I purchased a leasehold house in Newcastle upon Tyne. Am I liable to pay 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. A critical element 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 work for a reputable estate agency in Newcastle upon Tyne where we have experienced a few flat sales put at risk as a result of leases having less than 80 years remaining. I have been given conflicting advice from local Newcastle upon Tyne conveyancing firms. Please can you confirm whether the owner of a flat can instigate the lease extension process for the purchaser on completion of the sale?
Provided that 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 can avoid having to sit tight for 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 buyer.
Our conveyancer has advised that he intends to complete and exchange simultaneously on the disposal of our £375000 garden flat in Newcastle upon Tyne in just under a week. The landlords agents has quoted £360 for Certificate of Compliance, building insurance schedule and previous years service charge statements. Is it legal for a freeholder to charge such fees for a flat conveyance in Newcastle upon Tyne?
Newcastle upon Tyne conveyancing on leasehold flats usually involves fees being levied by managing agents :
- Completing pre-contract enquiries
- Where consent is required before sale in Newcastle upon Tyne
- Copies of the building insurance and schedule
- Deeds of covenant upon sale
- Registering of the assignment of the change of lessee after a sale
Are there frequently found deficiencies that you encounter in leases for Newcastle upon Tyne properties?
There is nothing unique about leasehold conveyancing in Newcastle upon Tyne. Most leases is drafted differently and drafting errors can sometimes mean that certain clauses are missing. The following missing provisions could result in a defective lease:
- A provision to repair to or maintain elements of the property
- 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
A defective lease will likely cause issues when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. Lloyds TSB Bank, Norwich and Peterborough Building Society, and Bank of Ireland all have express 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 provide security, forcing the buyer to withdraw.
I bought a studio flat in Newcastle upon Tyne, conveyancing having been completed 8 years ago. Can you let me have an estimate of the premium that my landlord can legally expect in return for granting a renewal of my lease? Similar flats in Newcastle upon Tyne with a long lease are worth £222,000. The average or mid-range amount of ground rent is £45 invoiced annually. The lease ceases on 21st October 2099
You have 74 years unexpired the likely cost is going to be between £12,400 and £14,200 plus costs.
The suggested premium range above a general guide to costs for extending a lease, but we are not able to advice on the actual costs without more detailed investigations. Do not use the figures in tribunal or court proceedings. There are no doubt additional concerns that need to be considered and you obviously want to be as accurate as possible in your negotiations. Neither should you take any other action based on this information before getting professional advice.
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