Warrington leasehold conveyancing: Q and A’s
My wife and I purchased a leasehold house in Warrington. Conveyancing and Chelsea Building Society mortgage went though with no issue. I have received a letter from someone saying they have taken over the reversionary interest in the property. Attached was a ground rent demand for rent dating back to 1992. The conveyancing solicitor in Warrington who previously acted has long since retired.What should I do?
The first thing you should do is make enquiries of HMLR to make sure that the individual purporting to own the freehold is in fact the new freeholder. It is not necessary to incur the fees of a Warrington conveyancing firm to do this as it can be done on-line for a few pound. You should note that regardless, even if this is the rightful landlord, under the Limitation Act 1980 the limitation period for recovery of ground rent is six years.
I am looking at a couple of flats in Warrington which have in the region of forty five years left on the leases. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold flat in Warrington 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 value of the premises. For most purchasers and lenders, leases with less than eighty years become less and less marketable. 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 property 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 premises 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 Warrington conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending the lease They may agree to a smaller lump sum and an increase in the ground rent, but to shorter extension terms in return. You need to ensure that any new 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 house in Warrington. Do I have any liability for service charges relating to a period prior to completion of my purchase?
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. 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 busy estate agent office in Warrington where we see a number of leasehold sales derailed as a result of short leases. I have received inconsistent advice from local Warrington conveyancing firms. Could you confirm whether the vendor of a flat can start the lease extension process 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 start the lease extension process and assign the benefit of the notice to the purchaser. This means that the proposed purchaser 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 before, or at the same time as completion of the disposal of the property.
Alternatively, it may be possible 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.
What are your top tips when it comes to appointing a Warrington conveyancing firm to deal with our lease extension?
If you are instructing a conveyancer for lease extension works (regardless if they are a Warrington conveyancing firm) it is imperative that he or she should be familiar with the legislation and specialises in this area of conveyancing. We recommend that you talk with several firms including non Warrington 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:
- How familiar is the practice with lease extension legislation?
Warrington Leasehold Conveyancing - A selection of Queries Prior to Purchasing
You should be aware if it is no more than 80 years it will impact the value of the property. Check with your bank that they are content with residual term of the lease. A short lease means that you will probably require a lease extension at some point and it is worth finding out what this would cost. For most Warringtonlease extensions you would need to own the property for a couple of years before you are eligible to extend the lease.
Are any of leasehold owners in arrears of their service charge liability?
Is there a share of the freehold?