Victoria leasehold conveyancing: Q and A’s
I want to rent out my leasehold flat in Victoria. Conveyancing solicitor who did the purchase is retired - so can't ask her. Is permission from the freeholder required?
Some leases for properties in Victoria do contain a provision to say that subletting is only permitted with prior consent from the landlord. The landlord is not entitled to unreasonably withhold but, in such cases, they would need to review references. Experience dictates that problems are usually caused by unsatisfactory tenants rather than owner-occupiers and for that reason you can expect the freeholder to take up the references and consider them carefully before granting permission.
I am hoping to put an offer on a small detached house that seems to tick a lot of boxes, at a great price which is making it all the more appealing. I have subsequently discovered that the title is leasehold as opposed to freehold. I am assuming that there are particular concerns buying a leasehold house in Victoria. Conveyancing lawyers have not yet been appointed. Will they explain the issues?
Most houses in Victoria are freehold rather than leasehold. This is one of the situations where having a local conveyancer used to dealing with such properties who can help the conveyancing process. We note that you are buying in Victoria in which case you should be shopping around for a Victoria conveyancing solicitor and be sure that they are used to transacting on leasehold houses. First you will need to check the unexpired lease term. As a leaseholder you will not be entirely free to do whatever you want with the house. The lease will likely included provisions such as requiring the freeholder’sconsent to conduct alterations. You may also be required to pay a service charge towards the maintenance of the estate where the house is part of an estate. Your lawyer will appraise you on the various issues.
I've recently bought a leasehold property in Victoria. Am I liable to pay 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).
I am employed by a long established estate agency in Victoria where we see a few leasehold sales jeopardised as a result of short leases. I have received inconsistent advice from local Victoria conveyancing solicitors. Please can you confirm whether the seller of a flat can instigate the lease extension process for the buyer?
Provided that the seller has owned the lease 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 buyer can avoid having to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed prior to, 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 purchaser.
Following years of negotiations we cannot agree with our landlord on how much the lease extension should cost for our flat in Victoria. Does the Leasehold Valuation Tribunal have jurisdiction to calculate the appropriate figures?
You certainly can. We are happy to put you in touch with a Victoria conveyancing firm who can help.
An example of a Lease Extension matter before the tribunal for a Victoria flat is Flats 12A & 19, Evelyn Mansions Carlisle Place in June 2009. The Tribunal held that the price to be paid for the new lease of Flat 12A is £168,824, For the other flat the price was set at £169,110 This case was in relation to 2 flats. The remaining number of years on the lease was 56 years.
In relation to leasehold conveyancing in Victoria what are the most common lease defects?
Leasehold conveyancing in Victoria is not unique. Most leases is drafted differently and legal mistakes in the legal wording can sometimes mean that certain clauses are wrong. For example, if your lease is missing any of the following, it could be defective:
- A provision to repair to or maintain elements of the premises
- A duty to insure the building
- A provision for the recovery of money spent for the benefit of another party.
- Maintenance charge proportions which don’t add up to the correct percentage
You will 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. Santander, Skipton Building Society, and Bank of Ireland all have express conveyancing instructions 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, forcing the purchaser to withdraw.