Portland leasehold conveyancing: Q and A’s
Estate agents have just been given the go-ahead to market my basement apartment in Portland.Conveyancing has not commenced but I have just received a half-yearly maintenance charge demand – Do I pay up?
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 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.
Back In 2009, I bought a leasehold house in Portland. Conveyancing and Leeds Building Society mortgage are in place. I have received a letter from someone claiming to own the reversionary interest in the property. Attached was a ground rent demand for rent dating back to 1998. The conveyancing practitioner in Portland who previously acted has now retired.Any advice?
The first thing you should do is make enquiries of HMLR to be sure that this person is in fact the new freeholder. There is no need to instruct a Portland conveyancing firm to do this as it can be done on-line for £3. You should note that in any event, even if this is the legitimate landlord, under the Limitation Act 1980 the limitation period for recovery of ground rent is six years.
I am looking at a couple of apartments in Portland both have about 50 years left on the lease term. Will this present a problem?
There is no doubt about it. A leasehold flat in Portland is a wasting asset as a result of the shortening lease. The nearer the lease gets to zero years unexpired, the more it reduces the salability of the property. For most purchasers and lenders, leases with under 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 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 Portland 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 any new 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.
What are your top tips when it comes to appointing a Portland conveyancing firm to deal with our lease extension?
When appointing a conveyancer for lease extension works (regardless if they are a Portland conveyancing practice) it is most important that they be familiar with the legislation and specialises in this area of work. We advise that you make enquires with two or three firms including non Portland conveyancing practices prior to instructing a firm. If the firm is ALEP accredited then that’s a bonus. Some following of questions might be helpful:
- How familiar is the practice with lease extension legislation?
What are the frequently found problems that you see in leases for Portland properties?
Leasehold conveyancing in Portland is not unique. Most leases are individual and drafting errors can sometimes mean that certain sections are erroneous. The following missing provisions could result in a defective lease:
- Repairing obligations to or maintain parts of the building
- A duty to insure the building
- A provision for the recovery of money spent for the benefit of another party.
- Maintenance charge proportions which don’t add up to the correct percentage
A defective lease can cause issues when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. National Westminster Bank, Bank of Scotland, and Nottingham Building Society all have express 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 pull out.
Portland Conveyancing for Leasehold Flats - A selection of Questions you should ask before buying
The answer will be important as a) areas can cause problems for the building as the communal areas may start to deteriorate where maintenance are not paid for b) if the leasehold owners have a dispute with the running of the building you will wish to have complete disclosure
Please note if it is fewer than eighty years it will affect the value of the apartment. It is worth checking with your bank that they are willing to lend given the lease term. Leases with fewer than 80 years remaining means that you will almost definitely have to extend the lease sooner rather than later and it is worth finding out what this will be. Remember, in most cases you will need to own the premises for two years in order to be entitled to exercise a lease extension.
For many Portland leaseholds the outlay for major works are not built into the maintenance charges, albeit that some managing agents in Portland require tenants to contribute towards a reserve fund created for the specific purpose of establishing a fund for larger repairs or maintenance.