I have just appointed agents to market my ground floor apartment in Petersfield.Conveyancing has not commenced but I have just received a quarterly service charge demand – Do I pay up?

Your conveyancing lawyer is likely to suggest that you should discharge 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 unless 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 hoping to put an offer on a small detached house that appears to be perfect, at a great figure which is making it more attractive. I have subsequently been informed that it's a leasehold as opposed to freehold. I am assuming that there are particular concerns buying a leasehold house in Petersfield. Conveyancing solicitors have are about to be appointed. Will they explain the issues?

Most houses in Petersfield are freehold rather than leasehold. In this scenario it’s worth having a local conveyancer who is familiar with the area can help the conveyancing process. It is clear that you are buying in Petersfield so you should seriously consider shopping around for a Petersfield conveyancing solicitor and be sure that they are used to advising on leasehold houses. As a matter of priority you will need to check the number of years remaining. As a tenant you will not be at liberty to do whatever you want with the house. The lease will likely included provisions for example requiring the freeholder’sconsent to conduct changes to the property. You may also be required to pay a service charge towards the upkeep of the estate where the property is located on an estate. Your solicitor should appraise you on the various issues.

Last month I purchased a leasehold property in Petersfield. Am I liable to pay service charges for periods before 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. 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).

I am a negotiator for a long established estate agent office in Petersfield where we have experienced a few flat sales jeopardised as a result of leases having less than 80 years remaining. I have been given conflicting advice from local Petersfield conveyancing firms. Could you confirm whether the vendor of a flat can commence the lease extension formalities for the purchaser on completion of the sale?

Provided that the seller has owned the lease 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. The benefit of this is that the buyer can avoid having to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed prior to, or simultaneously with 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 buyer.

What are the common problems that you witness in leases for Petersfield properties?

There is nothing unique about leasehold conveyancing in Petersfield. Most leases are individual and legal mistakes in the legal wording can sometimes mean that certain provisions are wrong. For example, if your lease is missing any of the following, it could be defective:

• Repairing obligations to or maintain elements of the property
• Insurance obligations
• 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 may encounter a problem when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Accord Mortgages Ltd, Skipton Building Society, and Platform Home Loans Ltd 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 does not cover certain provisions they may refuse to provide security, forcing the purchaser to withdraw.

Petersfield Leasehold Conveyancing - A selection of Queries before Purchasing

It would be prudent to discover as much as you can concerning the managing agents as they will affect your use and enjoyment of the property. As the owner of a leasehold property you will be at the mercy of the managing agents from a financial perspective and when it comes to every day issues such as the tidiness of the communal areas. Ask prospective neighbours what they think of their service. Finally, investigate as to the dates that the maintenance fees are due to the managing agents and precisely how they are spending the funds. You should be aware that where the lease has no more than 80 years it will have adverse implications on the value of the apartment. It is worth checking with your lender that they are willing to to proceed given the lease term. Leases with fewer than 80 years remaining means that you will probably have to extend the lease sooner rather than later and you need to have some idea of how much this would cost. Remember, in most cases you would be be obliged to have been the owner of the property for a couple of years in order to be legally able to extend the lease. Is the freehold owned collectively by the leaseholders?

Other Topics

Lease Extensions in Petersfield