I have just started marketing my 2 bed apartment in Salcombe.Conveyancing lawyers have not yet been instructed but I have just received a yearly service charge invoice – should I leave it to the buyer to sort out?

Your conveyancing lawyer is likely to suggest that you should pay 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 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've recently bought a leasehold flat in Salcombe. Am I liable to pay service charges relating to a period prior to my ownership?

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 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 work for a long established estate agency in Salcombe where we have experienced a few flat sales jeopardised due to leases having less than 80 years remaining. I have received contradictory information from local Salcombe conveyancing firms. Please can you clarify whether the owner of a flat can commence the lease extension process for the buyer?

As long as the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to commence the lease extension process and assign the benefit of the notice to the purchaser. This means that the buyer can avoid having to wait 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed before, or at the same time as completion of the disposal of the property.

An alternative approach is to extend the lease informally by agreement with the landlord 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.

Can you provide any top tips for leasehold conveyancing in Salcombe with the aim of saving time on the sale process?

• Much of the delay in leasehold conveyancing in Salcombe can be bypassed where you instruct lawyers the minute your agents start marketing the property and ask them to put together the leasehold information which will be required by the buyers lawyers.
• If you have carried out any alterations to the property would they have required Landlord’s consent? Have you, for example installed wooden flooring? Most leases in Salcombe state that internal structural changes or laying down wooden flooring calls for a licence from the Landlord acquiescing to such changes. Where you dont have the consents to hand you should not communicate with the landlord without checking with your conveyancer in the first instance.
• Some Salcombe leases require Licence to Assign from the landlord. If this is the case, you should place the estate agents on notice to make sure that the purchasers obtain financial (bank) and professional references. Any bank reference will need to confirm that the buyers are able to meet the yearly 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 service charge figures so that they can pass this information on to the purchasers or their solicitors.
• If you are supposed to have a share in the Management Company, you should ensure that you hold the original share certificate. Organising a new share certificate is often a time consuming formality and slows down many a Salcombe conveyancing deal. Where a reissued share is necessary, do contact the company officers or managing agents (if relevant) for this sooner rather than later.
• You may think that you are aware of the number of years left on your lease but it would be advisable double-check by asking your solicitors. A buyer’s lawyer will not be happy to advise their client to proceed with the purchase of a leasehold property the lease term is below 75 years. In the circumstances it is important at an early stage that you identify whether the lease term requires a lease extension. If it does, contact your solicitors before you put your premises on the market for sale.

What makes a Salcombe lease unmortgageable?

There is nothing unique about leasehold conveyancing in Salcombe. All leases is drafted differently and legal mistakes in the legal wording can result in certain sections are missing. The following missing provisions could result in a defective lease:

• Repairing obligations to or maintain elements of the property
• A duty to insure the building
• 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 can cause problems when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. Lloyds TSB Bank, Norwich and Peterborough Building Society, and Alliance & Leicester all have very detailed conveyancing instructions when it comes to what is expected in a lease. If a mortgage lender believes that the lease is problematic they may refuse to provide security, forcing the purchaser to pull out.

Salcombe Conveyancing for Leasehold Flats - Examples of Questions you should consider Prior to Purchasing

What prohibitions are contained in the Salcombe Lease? In the main the cost for major works tend not to be built into the maintenance charges, although some managing agents in Salcombe ask leasehold owners to contribute towards a reserve fund created for the specific purpose of establishing a fund for larger works.