Estate agents have just been given the go-ahead to market my ground floor apartment in Northwich.Conveyancing has not commenced but I have just received a quarterly service charge demand – should I leave it to the buyer to sort out?

It best that you pay 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 attracted to a two maisonettes in Northwich both have in the region of 50 years left on the leases. Should I regard a short lease as a deal breaker?

There is no doubt about it. A leasehold flat in Northwich is a deteriorating asset as a result of the reducing lease term. The nearer the lease gets to zero years unexpired, the more it reduces the salability of the property. The majority of purchasers and lenders, leases with less than 75 years become less and less marketable. 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 Northwich conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. More often than not it is possible to negotiate informally with the freeholder to extend 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 the agreed 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 flat in Northwich. Am I liable to pay service charges for periods before 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 am a negotiator for a long established estate agent office in Northwich where we have witnessed a number of flat sales derailed as a result of leases having less than 80 years remaining. I have received contradictory information from local Northwich conveyancing solicitors. Could you clarify whether the seller 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 start the lease extension process and assign the benefit of the notice to the purchaser. This means 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 prior to, or at the same time as completion of the disposal of the property.

An alternative approach is 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.

Are there common deficiencies that you encounter in leases for Northwich properties?

There is nothing unique about leasehold conveyancing in Northwich. 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 elements of the building
• Insurance obligations
• 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 can cause issues when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. HSBC Bank, Skipton Building Society, and Bank of Ireland 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, forcing the purchaser to withdraw.

Northwich Conveyancing for Leasehold Flats - Examples of Queries before Purchasing

For many Northwich leaseholds the cost for major works are not included within service charges, although a few managing agents in Northwich require leasehold owners to contribute towards a sinking fund and this is used to offset against larger repairs or maintenance. You will want to find out as much as you can concerning the managing agents as they will impact your use and enjoyment of the property. As the owner of a leasehold property you are frequently in the clutches of the managing agents both financially and when it comes to daily matters like the upkeep of the common parts. Ask prospective neighbours if they are happy with them. Finally, find out the dates that you are obliged pay the service charge to the managing agents and specifically what it includes. How is the lease structured?

Other Topics

Lease Extensions in Northwich