Questions and Answers: Tiptree leasehold conveyancing
Back In 2000, I bought a leasehold flat in Tiptree. Conveyancing and Bank of Ireland mortgage went though with no issue. A letter has just been received from someone saying they have taken over the freehold. It included a demand for arrears of ground rent dating back to 1998. The conveyancing practitioner in Tiptree who previously acted has now retired.What should I do?
The first thing you should do is make enquiries of the Land Registry to be sure that the individual claiming to own the freehold is in fact the new freeholder. There is no need to instruct a Tiptree conveyancing solicitor to do this as it can be done on-line for £3. Rest assured that regardless, even if this is the legitimate freeholder, under the Limitation Act 1980 no more than 6 years of rent can be collected.
I am looking at a couple of flats in Tiptree both have about forty five years unexpired on the leases. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold apartment in Tiptree is a wasting asset as a result of the reducing lease term. The nearer the lease gets to zero years unexpired, the more it adversely affects the salability of the property. The majority of purchasers and banks, leases with under eighty years become less and less attractive. 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 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 property 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 Tiptree 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 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 the agreed 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've recently bought a leasehold property in Tiptree. Do I have any liability for service charges relating to a period prior to completion of my purchase?
In a situation 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. 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).
If all goes to plan we aim to complete the sale of our £200000 apartment in Tiptree on Tuesday in a week. The managing agents has quoted £384 for Landlord’s certificate, insurance certificate and 3 years statements of service charge. Is the landlord entitled to charge an administration fee for a leasehold conveyance in Tiptree?
Tiptree conveyancing on leasehold flats usually necessitates the buyer’s lawyer sending enquiries for the landlord to address. Although the landlord is under no legal obligation to answer such questions the majority will be content to assist. They are entitled invoice a reasonable administration fee for answering enquiries or supplying documentation. There is no set fee. The average fee for the information that you are referring to is over three hundred pounds, in some cases it is above £800. The administration charge demanded by the landlord must be sent together with a summary of entitlements and obligations in respect of administration charges, otherwise the invoice is not strictly payable. Reality however dictates that you have little option but to pay whatever is requested of you should you wish to sell the property.
Are there frequently found deficiencies that you see in leases for Tiptree properties?
There is nothing unique about leasehold conveyancing in Tiptree. All leases are unique and drafting errors can sometimes mean that certain provisions are erroneous. For example, if your lease is missing any of the following, it could be defective:
- Repairing obligations to or maintain elements of the premises
- 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 could have difficulties when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Barclays , The Royal Bank of Scotland, and TSB all have express 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 withdraw.
I acquired a leasehold flat in Tiptree, conveyancing was carried out 2003. Can you work out an approximate cost of a lease extension? Comparable properties in Tiptree with an extended lease are worth £181,000. The average or mid-range amount of ground rent is £55 levied per year. The lease finishes on 21st October 2098
With only 75 years remaining on your lease the likely cost is going to be between £10,500 and £12,000 plus costs.
The figure that we have given is a general guide to costs for extending a lease, but we are not able to provide a more accurate figure in the absence of detailed investigations. You should not use the figures in tribunal or court proceedings. There may be additional issues that need to be considered and you obviously should be as accurate as possible in your negotiations. Please do not take any other action placing reliance on this information before getting professional advice.