Peterborough leasehold conveyancing: Q and A’s
Due to sign contracts shortly on a garden flat in Peterborough. Conveyancing lawyers have said that they are sending me a report tomorrow. What should I be looking out for?
Your report on title for your leasehold conveyancing in Peterborough should include some of the following:
- You should be sent a copy of the lease
I am looking at a two maisonettes in Peterborough both have about fifty years unexpired on the lease term. Do I need to be concerned?
A lease is a right to use the property for a period of time. As the lease shortens the saleability of the lease reduces and it becomes more expensive to acquire a lease extension. For this reason it is generally wise to increase the term of the lease. Sometimes it is difficult to sell a property with a short lease as mortgage lenders may be unwilling to lend money on such properties. Lease extension can be a protracted process. We recommend you get professional assistance from a conveyancer and surveyor with experience in this area
I've recently bought a leasehold house in Peterborough. Am I liable to pay 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. 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 employed by a long established estate agency in Peterborough where we see a number of flat sales put at risk as a result of short leases. I have received conflicting advice from local Peterborough conveyancing firms. Please can you confirm whether the owner of a flat can commence the lease extension process for the purchaser on completion of the sale?
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 proposed purchaser need not have to sit tight for 2 years to extend their lease. 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.
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.
What makes a Peterborough lease unmortgageable?
Leasehold conveyancing in Peterborough is not unique. Most leases are individual and legal mistakes in the legal wording can sometimes mean that certain provisions are not included. 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 will have a problem 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, Skipton Building Society, and Nottingham Building Society all have very detailed conveyancing instructions 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 buyer to withdraw.
I inherited a ground floor flat in Peterborough, conveyancing having been completed 5 years ago. How much will my lease extension cost? Comparable flats in Peterborough with a long lease are worth £201,000. The ground rent is £50 invoiced annually. The lease finishes on 21st October 2081
With only 61 years remaining on your lease we estimate the price of your lease extension to be between £21,900 and £25,200 plus professional fees.
The suggested premium range above a general guide to costs for renewing a lease, but we cannot give you a more accurate figure in the absence of comprehensive due diligence. Do 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. You should not move forward based on this information without first seeking the advice of a professional.