I have just appointed agents to market my basement flat in Olney.Conveyancing is yet to be initiated but I have just had a half-yearly maintenance charge invoice – what should I do?

It best that you clear the invoice 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. Having a clear account will assist your cause and will leave you no worse off financially.

I am attracted to a two flats in Olney which have in the region of forty five years remaining on the leases. Will this present a problem?

There is no doubt about it. A leasehold flat in Olney is a wasting asset as a result of the shortening lease. The closer the lease gets to its expiry date, the more it reduces the marketability of the property. For most buyers and banks, leases with less than 75 years become less and less attractive. On a more positive note, leaseholders can extend their leases by serving a Section 42 Notice. One stipulation is that they must have owned the property 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 premises 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 Olney 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 You may find he or she is happy to negotiate informally and willing to consider your offer straight off, without having to involve anyone else. This will save you time and money and it could help you reach a lower price on the lease. 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 property in Olney. Am I liable to pay service charges relating to a period prior to my ownership?

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. 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 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).

Can you provide any advice for leasehold conveyancing in Olney with the purpose of expediting the sale process?

• Much of the frustration in leasehold conveyancing in Olney can be avoided if you appoint lawyers the minute your agents start advertising the property and ask them to collate the leasehold information needed by the buyers conveyancers.
• In the event that you altered the property did you need the Landlord’s approval? In particular have you installed wooden flooring? Olney leases often stipulate that internal structural alterations or addition of wooden flooring necessitate a licence from the Landlord consenting to such works. Where you dont have the paperwork in place you should not contact the landlord without contacting your lawyer before hand.
• A minority of Olney leases require Licence to Assign from the landlord. If this applies to your lease, it would be prudent to notify your estate agents to make sure that the purchasers obtain financial (bank) and professional references. The bank reference will need to confirm that the buyers are able to meet the annual service charge and the actual amount of the service charge should be quoted in the bank’s letter. You will therefore need to provide your estate agents with the service charge figures so that they can pass this information on to the purchasers or their lawyers.
• If there is a history of any disputes with your landlord or managing agents it is very important that these are resolved before the property is put on the market. The purchasers and their solicitors will be concerned about purchasing a flat where there is a current dispute. You will have to accept that you will have to pay any arrears of service charge or resolve the dispute prior to completion of the sale. It is therefore preferable to have any dispute settled prior to the contract papers being issued to the buyers’ solicitors. You will still have to reveal details of the dispute to the purchasers, but it is better to present the dispute as over as opposed to unresolved.
• If you hold a share in a the freehold, you should make sure that you hold the original share certificate. Organising a replacement share certificate is often a lengthy formality and delays many a Olney home move. If a reissued share certificate is necessary, you should approach the company director and secretary or managing agents (where applicable) for this at the earliest opportunity.

Are there common problems that you witness in leases for Olney properties?

Leasehold conveyancing in Olney is not unique. All leases are unique and legal mistakes in the legal wording can sometimes mean that certain sections are missing. For example, if your lease is missing any of the following, it could be defective:

• Repairing obligations to or maintain parts of the premises
• A duty to insure the building
• 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

You could have difficulties when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. HSBC Bank, Barnsley Building Society, and Alliance & Leicester all have express requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease does not cover certain provisions they may refuse to grant the mortgage, obliging the buyer to pull out.

Olney Conveyancing for Leasehold Flats - Sample of Queries Prior to Purchasing

Best to be warned whether fixing the lift or some other major work is due shortly to be shared amongst the tenants and could well materially impact the level of the service charges or necessitate a specific invoice. What prohibitions are contained in the Olney Lease?