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Questions and Answers: St Neots leasehold conveyancing

I am looking at a couple of flats in St Neots which have about forty five years remaining on the lease term. Do I need to be concerned?

There are plenty of short leases in St Neots. The lease is a right to use the premises for a prescribed time frame. As the lease shortens the value of the lease decreases and it becomes more expensive to acquire a lease extension. For this reason it is advisable to increase the term of the lease. More often than not it is difficult to sell a property with a short lease because mortgage companies may be reluctant to lend money on properties of this type. Lease extension can be a protracted process. We advise that you seek professional help from a conveyancer and surveyor with experience in this field

I've recently bought a leasehold house in St Neots. 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. Strange as it may seem, your landlord may still be able to take action to forfeit the lease. A critical element 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 employed by a reputable estate agent office in St Neots where we have witnessed a number of flat sales jeopardised due to short leases. I have received conflicting advice from local St Neots conveyancing solicitors. Please can you shed some light as to whether the owner of a flat can instigate the lease extension formalities for the buyer?

Provided that 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. The benefit of this is 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 needs to be completed before, or simultaneously with completion of the sale.

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 St Neots from the perspective of expediting the sale process?

  • A significant proportion of the delay in leasehold conveyancing in St Neots can be avoided where you instruct lawyers the minute your agents start advertising 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 residence would they have required Landlord’s approval? Have you, for example laid down wooden flooring? Most leases in St Neots state that internal structural changes or laying down wooden flooring calls for a licence issued by the Landlord consenting to such changes. Where you dont have the paperwork in place do not contact the landlord without checking with your conveyancer first.
  • Some St Neots leases require Landlord’s consent to the sale and approval of the buyers. If this applies to your lease, you should place the estate agents on notice to make sure that the purchasers obtain bank and professional references. Any bank reference will need to confirm that the buyers are able to meet 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 purchasers or their lawyers.
  • If there is a history of any disputes with your freeholder or managing agents it is essential that these are resolved prior to the flat being put on the market. The purchasers and their solicitors will be reluctant to purchase a flat where a dispute is unsettled. You may need to swallow your pride and pay any arrears of service charge or resolve the dispute prior to completion of the sale. It is therefore preferable to have any dispute settled prior to the contract papers being issued to the buyers’ solicitors. You are still duty bound to disclose details of the dispute to the buyers, but it is better to present the dispute as historic as opposed to unsettled.
  • If you are supposed to have a share in the Management Company, you should ensure that you have the original share document. Arranging a replacement share certificate can be a lengthy formality and delays many a St Neots conveyancing deal. Where a duplicate share certificate is needed, you should approach the company director and secretary or managing agents (if relevant) for this as soon as possible.

  • We expect to complete the disposal of our £175000 apartment in St Neots next week. The managing agents has quoted £384 for Landlord’s certificate, insurance certificate and previous years service charge statements. Is it legal for a freeholder to charge exorbitant fees for a flat conveyance in St Neots?

    St Neots conveyancing on leasehold maisonettes often involves the buyer’s solicitor submitting questions for the landlord to answer. Although the landlord is not legally bound to respond to these enquiries the majority will be willing to assist. They are entitled charge a reasonable charge for responding to questions or supplying documentation. There is no upper cap for such fees. The average costs for the paperwork that you are referring to is £350, in some cases it is above £800. The management information fee demanded by the landlord must be sent together with a synopsis of rights and obligations in relation to administration fees, without which the invoice is not strictly payable. In reality you have no choice but to pay whatever is requested of you should you wish to sell the property.

    I invested in buying a split level flat in St Neots, conveyancing formalities finalised 3 years ago. Can you give me give me an indication of the likely cost of a lease extension? Equivalent properties in St Neots with over 90 years remaining are worth £173,000. The average or mid-range amount of ground rent is £55 levied per year. The lease runs out on 21st October 2084

    With only 62 years left to run we estimate the premium for your lease extension to be between £17,100 and £19,800 as well as professional fees.

    The suggested premium range above a general guide to costs for extending a lease, but we cannot give you a more accurate figure without more comprehensive due diligence. Do not use this information in tribunal or court proceedings. There may be additional concerns that need to be considered and clearly you should be as accurate as possible in your negotiations. Please do not take any other action based on this information without first getting professional advice.

    Other Topics

    Lease Extensions in St Neots