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Top Five Questions relating to Small Heath leasehold conveyancing

I am attracted to a couple of apartments in Small Heath which have about fifty years remaining on the lease term. Will this present a problem?

A lease is a right to use the property for a period of time. As a lease shortens the saleability of the lease reduces and it becomes more expensive to acquire a lease extension. For this reason it is often a good idea to extend the lease term. It is often difficult to sell a property with a short lease because mortgage companies may be unwilling to lend money on such properties. Lease enfranchisement can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this field

I've recently bought a leasehold property in Small Heath. Do I have any liability for service charges for periods before completion of my purchase?

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 be sure 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 employed by a reputable estate agent office in Small Heath where we have witnessed a few flat sales put at risk as a result of short leases. I have received inconsistent advice from local Small Heath conveyancing solicitors. Can you shed some light as to whether the vendor of a flat can initiate 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 kick-start the lease extension process and assign the benefit of the notice to the purchaser. This means that the proposed purchaser can avoid having to sit tight for 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment has to be done prior to, or at the same time as 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 purchaser.

Can you offer any advice when it comes to finding a Small Heath conveyancing firm to carry out our lease extension conveyancing?

If you are instructing a conveyancer for your lease extension (regardless if they are a Small Heath conveyancing firm) it is essential that they be familiar with the legislation and specialises in this area of work. We advise that you speak with two or three firms including non Small Heath conveyancing practices prior to instructing a firm. If the firm is ALEP accredited then so much the better. Some following of questions might be helpful:

  • How familiar is the firm with lease extension legislation?
  • Can they put you in touch with client in Small Heath who can give a testimonial?

    • Can you provide any top tips for leasehold conveyancing in Small Heath from the point of view of expediting the sale process?

    • Much of the frustration in leasehold conveyancing in Small Heath can be bypassed if you instruct lawyers the minute your agents start advertising the property and ask them to collate the leasehold information which will be required by the buyers conveyancers.
    • Many freeholders or Management Companies in Small Heath levy fees for supplying management packs for a leasehold homes. You or your lawyers should enquire as to the actual amount of the charges. The management information can be applied for as soon as you have a buyer, thus reducing delays. The typical amount of time it takes to obtain the necessary information is three weeks. It is the most common reason for frustration in leasehold conveyancing in Small Heath.
  • In the event that you altered the property did you need the Landlord’s consent? Have you, for example installed wooden flooring? Small Heath leases often stipulate that internal structural changes or laying down wooden flooring necessitate a licence from the Landlord approving such alterations. If you dont have the paperwork in place you should not contact the landlord without checking with your conveyancer first.
  • Some Small Heath leases require Landlord’s consent to the sale and approval of the buyers. If this applies to your lease, it would be prudent to place the estate agents on notice to make sure that the purchasers obtain 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 service charge figures so that they can pass this information on to the buyers or their solicitors.
  • You may think that you are aware of the number of years left 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 to exchange contracts if the lease term is less than 80 years. It is therefore important at an early stage that you identify whether the lease term for your property needs extending. If it does, contact your solicitors before you put your premises on the market for sale.

    • I bought a studio flat in Small Heath, conveyancing was carried out in 1995. How much will my lease extension cost? Similar flats in Small Heath with over 90 years remaining are worth £186,000. The average or mid-range amount of ground rent is £65 yearly. The lease ends on 21st October 2089

    With just 66 years left to run the likely cost is going to range between £11,400 and £13,200 as well as legals.

    The suggested premium range that we have given is a general guide to costs for extending a lease, but we cannot give you the actual costs in the absence of detailed due diligence. You should not use the figures in tribunal or court proceedings. There may be other issues that need to be taken into account and clearly you should be as accurate as possible in your negotiations. You should not take any other action placing reliance on this information without first getting professional advice.

    Other Topics

    Lease Extensions in Small Heath