Questions and Answers: Peterlee leasehold conveyancing
Estate agents have just been given the go-ahead to market my ground floor flat in Peterlee.Conveyancing is yet to be initiated but I have just received a yearly service charge demand – what should I do?
Your conveyancing lawyer is likely to suggest that you should 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 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.
I am tempted by the attractive purchase price for a two flats in Peterlee which have approximately fifty years unexpired on the leases. Should I regard a short lease as a deal breaker?
There is no doubt about it. A leasehold apartment in Peterlee is a wasting asset as a result of the shortening lease. The nearer the lease gets to zero years unexpired, the more it adversely affects the value of the property. The majority of purchasers and lenders, leases with less than eighty 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 Peterlee 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 house in Peterlee. 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 lessee 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 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).
If all goes to plan we aim to complete the sale of our £475000 apartment in Peterlee in just under a week. The managing agents has quoted £396 for Landlord’s certificate, building insurance schedule and previous years statements of service charge. Is the landlord entitled to charge an administration fee for a leasehold conveyance in Peterlee?
For most leasehold sales in Peterlee conveyancing will involve, queries regarding the management of a building inevitably needing to be answered directly by the freeholder or its agent, this includes :
- Completing pre-contract questions
- Where consent is required before sale in Peterlee
- Copies of the building insurance and schedule
- Deeds of covenant upon sale
- Registering of the assignment of the change of lessee after a sale
What are the frequently found problems that you see in leases for Peterlee properties?
Leasehold conveyancing in Peterlee is not unique. Most leases are unique and drafting errors can result in certain provisions 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 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 as they can affect a potential buyer’s ability to obtain a mortgage. Yorkshire Building Society, Bank of Scotland, and Barclays Direct all have very detailed requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease is defective they may refuse to provide security, forcing the buyer to withdraw.
I inherited a leasehold flat in Peterlee, conveyancing formalities finalised in 2008. How much will my lease extension cost? Equivalent flats in Peterlee with a long lease are worth £245,000. The ground rent is £50 invoiced annually. The lease ends on 21st October 2074
With only 52 years left to run we estimate the price of your lease extension to be between £37,100 and £42,800 as well as costs.
The suggested premium range above a general guide to costs for renewing a lease, but we cannot give you the actual costs without more detailed due diligence. Do not use this information in a Notice of Claim or as an informal offer. There are no doubt additional issues that need to be considered and you obviously should be as accurate as possible in your negotiations. Neither should you take any other action based on this information without first seeking the advice of a professional.