Fixed-fee leasehold conveyancing in Victoria:

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Common questions relating to Victoria leasehold conveyancing

Frank (my husband) and I may need to let out our Victoria basement flat for a while due to a new job. We used a Victoria conveyancing firm in 2002 but they have since shut and we did not have the foresight to get any guidance as to whether the lease permits subletting. How do we find out?

The lease dictates the relationship between the freeholder and you the flat owner; specifically, it will set out if subletting is banned, or permitted but only subject to certain caveats. The rule is that if the lease contains no specific ban or restriction, subletting is allowed. Most leases in Victoria do not prevent strict prohibition on subletting – such a provision would undoubtedly devalue the flat. Instead, there is usually a basic requirement that the owner notifies the freeholder, possibly supplying a duplicate of the sublease.

I have just appointed agents to market my garden flat in Victoria.Conveyancing is yet to be initiated but I have just received a yearly service charge invoice – Do I pay up?

Your conveyancing lawyer is likely to suggest that you should pay the invoice as normal because all ground rent and service charges will be apportioned on completion, so you will be reimbursed by the buyer for the period running from after the completion date to the next payment date. Most management companies will not acknowledge the buyer until the service charges have been paid and are up to date so it is important for both buyer and seller for the seller to show that they are up to date. This will smooth the conveyancing process.

Last month I purchased a leasehold house in Victoria. 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 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 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 work for a long established estate agency in Victoria where we have witnessed a few leasehold sales derailed as a result of short leases. I have received inconsistent advice from local Victoria conveyancing firms. Could you clarify whether the owner of a flat can instigate the lease extension formalities 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 commence the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the buyer can avoid having to wait 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed prior to, or simultaneously with 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.

Can you offer any advice when it comes to appointing a Victoria conveyancing firm to deal with our lease extension?

If you are instructing a solicitor for your lease extension (regardless if they are a Victoria conveyancing practice) it is essential that they be familiar with the legislation and specialises in this area of work. We advise that you make enquires with two or three firms including non Victoria conveyancing practices before you instructing a firm. Where the conveyancing practice is ALEP accredited then that’s a bonus. Some following of questions might be helpful:

  • If the firm is not ALEP accredited then what is the reason?
  • What volume of lease extensions have they completed in Victoria in the last twenty four months?

  • After years of negotiations we are unable to agree with our landlord on how much the lease extension should cost for our flat in Victoria. Can we issue an application to the Residential Property Tribunal Service?

    Where there is a missing landlord or if there is disagreement about the premium for a lease extension, under the Leasehold Reform, Housing and Urban Development Act 1993 you can apply to the Leasehold Valuation Tribunal to calculate the premium.

    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 related to 2 flats. The the number of years remaining on the existing lease(s) was 56 years.

    Other Topics

    Lease Extensions in Victoria