My husband and I may need to sub-let our Victoria ground floor flat for a while due to a career opportunity. We instructed a Victoria conveyancing practice in 2004 but they have closed and we did not think at the time get any guidance as to whether the lease permits subletting. How do we find out?

Some leases for properties in Victoria do contain a provision to say that subletting is only allowed with permission. The landlord cannot unreasonably withhold but, in such cases, they would need to see references. Experience suggests 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 looking at a two flats in Victoria both have about 50 years remaining on the lease term. Should I regard a short lease as a deal breaker?

There are plenty of short leases in Victoria. The lease is a legal document that entitles you to use the property for a prescribed time frame. As the lease gets shorter the marketability of the lease reduces and it becomes more costly to acquire a lease extension. This is why it is often a good idea to increase the term of the lease. It is often difficult to sell a property with a short lease as mortgage companies may be unwilling 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

Last month I purchased a leasehold property in Victoria. Do I have any liability for service charges for periods before 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 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 work for a reputable estate agency in Victoria where we have experienced a number of leasehold sales jeopardised as a result of leases having less than 80 years remaining. I have been given conflicting advice from local Victoria conveyancing firms. Please can you clarify whether the owner of a flat can instigate the lease extension formalities for the buyer?

As long as 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. The benefit of this is that the proposed purchaser can avoid having to sit tight for 2 years for a lease extension. 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 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.

I have given up trying to reach an agreement for a lease extension in Victoria. Can this matter be resolved via the Leasehold Valuation Tribunal?

Most certainly. We are happy to put you in touch with a Victoria conveyancing firm who can help.

An example of a Lease Extension decision for a Victoria premises 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 affected 2 flats. The the unexpired term as at the valuation date was 56 years.

Are there common defects that you see in leases for Victoria properties?

Leasehold conveyancing in Victoria is not unique. All leases are individual and drafting errors can result in certain sections are wrong. The following missing provisions could result in a defective lease:

• A provision to repair to or maintain parts of the premises
• Insurance obligations
• Clauses dealing with recovering service charges for expenditure on the building or common parts.
• Service charge per centages that don't add up correctly leaving a shortfall

You could have a problem when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. National Westminster Bank, Barnsley Building Society, and Godiva Mortgages Ltd 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 is defective they may refuse to provide security, forcing the buyer to withdraw.

Other Topics

Lease Extensions in Victoria