Common questions relating to North East London leasehold conveyancing
I have recently realised that I have 68 years unexpired on my flat in North East London. I now wish to get lease extension but my landlord is missing. What options are available to me?
On the basis that you qualify, under the Leasehold Reform, Housing and Urban Development Act 1993 you can submit an application to the County Court for an order to dispense with the service of the initial notice. This will mean that your lease can be lengthened by the Court. You will be obliged to prove that you have done all that could be expected to find the freeholder. On the whole an enquiry agent would be helpful to conduct investigations and prepare an expert document to be used as proof that the freeholder can not be located. It is advisable to get professional help from a property lawyer both on proving the landlord’s absence and the application to the County Court covering North East London.
I have just started marketing my garden flat in North East London.Conveyancing has not commenced but I have just received a yearly maintenance charge invoice – what should I do?
It best that you clear 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 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.
Last month I purchased a leasehold property in North East London. Do I have any liability for service charges relating to a period prior to completion of my purchase?
In a situation 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. Strange as it may seem, your landlord may still be able to take action to forfeit the lease. A critical element of leasehold conveyancing for your conveyancer to ensure 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 employed by a reputable estate agent office in North East London where we see a few leasehold sales put at risk as a result of short leases. I have received contradictory information from local North East London conveyancing solicitors. Please can you shed some light as to whether the owner of a flat can initiate the lease extension process for the buyer?
As long as the seller has owned the lease 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. This means that the buyer need not have to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment has to be done prior to, or simultaneously with completion of the disposal of the property.
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 are the common defects that you encounter in leases for North East London properties?
There is nothing unique about leasehold conveyancing in North East London. Most leases are individual 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 parts of the building
- A duty to insure the building
- 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 problems when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. HSBC Bank, Norwich and Peterborough Building Society, and Platform Home Loans Ltd all have very detailed requirements when it comes to what is expected in a lease. Where a lender has been advised by their lawyers that the lease is problematic they may refuse to provide security, obliging the buyer to withdraw.
I invested in buying a 1 bedroom flat in North East London, conveyancing having been completed half a dozen years ago. Can you shed any light on how much the price could be for a 90 year extension to my lease? Equivalent properties in North East London with over 90 years remaining are worth £169,000. The average or mid-range amount of ground rent is £60 invoiced every year. The lease finishes on 21st October 2098
With 74 years left to run we estimate the price of your lease extension to be between £11,400 and £13,200 plus plus your own and the landlord's "reasonable" professional fees.
The suggested premium range that we have given is a general guide to costs for extending a lease, but we are not able to provide a more accurate figure in the absence of comprehensive investigations. Do not use the figures in tribunal or court proceedings. There may be additional issues that need to be considered and clearly you should be as accurate as possible in your negotiations. Neither should you take any other action based on this information before seeking the advice of a professional.
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