Fixed-fee leasehold conveyancing in Preston Park:

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I have just appointed agents to market my ground floor flat in Preston Park.Conveyancing solicitors are to be appointed soon but I have just received a yearly service charge demand – Do I pay up?

It best that you clear the service charge 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 attracted to a two apartments in Preston Park which have about fifty years unexpired on the leases. Will this present a problem?

There is no doubt about it. A leasehold apartment in Preston Park is a wasting asset as a result of the shortening lease. The closer the lease gets to its expiry date, the more it adversely affects the value of the premises. The majority of buyers and banks, leases with under eighty 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 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 Preston Park conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending 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 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.

I am a negotiator for a long established estate agency in Preston Park where we see a few leasehold sales put at risk as a result of short leases. I have received inconsistent advice from local Preston Park conveyancing firms. Could you clarify whether the vendor of a flat can start the lease extension process for the purchaser on completion of the sale?

Provided that the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to start the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the proposed purchaser can avoid having to wait 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment has to be done before, or at the same time as completion of the sale.

Alternatively, it may be possible 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.

Do you have any advice for leasehold conveyancing in Preston Park from the point of view of speeding up the sale process?

  • Much of the frustration in leasehold conveyancing in Preston Park can be bypassed if you instruct lawyers as soon as you market your property and ask them to collate the leasehold information needed by the purchasers’ solicitors.
  • Some Preston Park leases require Landlord’s consent to the sale and approval of the buyers. If this applies to your lease, you should 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 financially capable of paying 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 actual amount of the service charge so that they can pass this information on to the buyers or their lawyers.
  • If there is a history of any disputes with your freeholder or managing agents it is very important that these are resolved prior to the flat being marketed. The buyers and their solicitors will be reluctant to purchase a flat where a dispute is unresolved. You may need to swallow your pride and discharge any arrears of service charge or resolve the dispute prior to completion of the sale. It is therefore preferable to have any dispute settled ahead of the contract papers being issued to the buyers’ solicitors. You will still have to reveal particulars of the dispute to the purchasers, but it is clearly preferable to reveal the dispute as over rather than unresolved.
  • If you are supposed to have a share in the Management Company, you should ensure that you hold the original share certificate. Arranging a new share certificate is often a time consuming formality and delays many a Preston Park conveyancing transaction. If a new share is needed, you should approach the company director and secretary or managing agents (where relevant) for this at the earliest opportunity.
  • You believe that you know the number of years remaining on your lease but it would be wise to double-check by asking your solicitors. A buyer’s conveyancer will be unlikely to recommend their client to where the remaining number of years is below 80 years. In the circumstances it is important at an early stage that you consider whether the lease for your property needs extending. If it does, contact your solicitors before you put your property on the market for sale.

    • What makes a Preston Park lease unmortgageable?

    Leasehold conveyancing in Preston Park is not unique. All leases are unique and legal mistakes in the legal wording can result in certain sections are missing. The following missing provisions could result in a defective lease:

    • A provision to repair to or maintain elements of the building
    • 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

    You will encounter 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. Accord Mortgages Ltd, Coventry Building Society, and Clydesdale 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 does not cover certain provisions they may refuse to grant the mortgage, obliging the purchaser to pull out.

    I invested in buying a 1st floor flat in Preston Park, conveyancing formalities finalised half a dozen years ago. Can you shed any light on how much the price could be for a 90 year extension to my lease? Comparable properties in Preston Park with an extended lease are worth £248,000. The ground rent is £55 invoiced annually. The lease ends on 21st October 2100

    With just 75 years unexpired we estimate the premium for your lease extension to span between £9,500 and £11,000 as well as costs.

    The suggested premium range that we have given is a general guide to costs for renewing a lease, but we are not able to provide the actual costs without more 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 should be as accurate as possible in your negotiations. Neither should you move forward placing reliance on this information without first seeking the advice of a professional.

    Other Topics

    Lease Extensions in Preston Park