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Questions and Answers: Birkenhead leasehold conveyancing

I've recently bought a leasehold flat in Birkenhead. 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 owner 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 a negotiator for a reputable estate agency in Birkenhead where we have experienced a few leasehold sales jeopardised as a result of leases having less than 80 years remaining. I have been given contradictory information from local Birkenhead conveyancing solicitors. Can you clarify whether the seller of a flat can initiate the lease extension formalities for the purchaser on completion of the sale?

Provided that the seller has been the owner 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 need not have to sit tight for 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment has to be done prior to, or simultaneously with completion of the disposal of the property.

Alternatively, it may be possible 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.

What are your top tips when it comes to choosing a Birkenhead conveyancing firm to deal with our lease extension?

When appointing a solicitor for your lease extension (regardless if they are a Birkenhead conveyancing firm) it is most important that they be familiar with the legislation and specialises in this area of work. We recommend that you talk with several firms including non Birkenhead conveyancing practices before you instructing a firm. If the firm is ALEP accredited then that’s a bonus. Some following of questions might be of use:

  • Can they put you in touch with client in Birkenhead who can give a testimonial?
  • What are the charges for lease extension conveyancing?

    • Do you have any advice for leasehold conveyancing in Birkenhead from the point of view of saving time on the sale process?

    • Much of the frustration in leasehold conveyancing in Birkenhead can be bypassed if you get in touch lawyers the minute your agents start advertising the property and request that they start to collate the leasehold documentation needed by the buyers representatives.
    • The majority freeholders or managing agents in Birkenhead charge for providing management packs for a leasehold property. You or your lawyers should discover the fee that they propose to charge. The management pack sought on or before finding a buyer, thus reducing delays. The average time it takes to receive management information is three weeks. It is the most common cause of delay in leasehold conveyancing in Birkenhead.
  • If you have carried out any alterations to the residence would they have required Landlord’s approval? Have you, for example installed wooden flooring? Most leases in Birkenhead state that internal structural alterations or addition of wooden flooring require a licence issued by the Landlord consenting to such changes. If you dont have the paperwork to hand you should not communicate with the landlord without contacting your conveyancer before hand.
  • Some Birkenhead leases require Licence to Assign from the landlord. If this is the case, it would be prudent to notify your estate agents to make sure that the purchasers put in hand financial (bank) and professional references. The bank reference should make it clear that the buyer is financially capable of paying the annual service charge and the actual amount of the service charge should be quoted in the bank’s letter. You will therefore need to provide your estate agents with the actual amount of the service charge so that they can pass this information on to the purchasers or their lawyers.
  • You believe that you know the number of years left on your lease but it would be wise to verify this via your conveyancers. A buyer’s lawyer will be unlikely to recommend their client to to exchange contracts if the remaining number of years is less than 75 years. It is therefore important at an as soon as possible that you identify whether the lease term requires a lease extension. If it does, contact your solicitors before you put your property on the market for sale.

    • All being well we will complete our sale of a £125000 garden flat in Birkenhead in nine days. The managing agents has quoted £324 for Landlord’s certificate, insurance certificate and previous years service charge statements. Is it legal for a freeholder to charge such fees for a leasehold conveyance in Birkenhead?

    Birkenhead conveyancing on leasehold apartments more often than not requires the purchaser’s solicitor submitting enquiries for the landlord to answer. Although the landlord is under no legal obligation to address such questions most will be willing to assist. They are at liberty charge a reasonable charge for responding to questions or supplying documentation. There is no upper cap for such fees. The average costs for the information that you are referring to is over three hundred pounds, in some cases it is above £800. The administration charge invoiced by the landlord must be sent together with a summary of rights and obligations in respect of administration fees, otherwise the invoice is technically not due. Reality however dictates that one has no choice but to pay whatever is demanded if you want to exchange contracts with the buyer.

    Birkenhead Leasehold Conveyancing - Examples of Questions you should ask before buying

      It would be sensible to discover as much as you can regarding the company managing the building as they will affect your use and enjoyment of the property. Being a leasehold owner you will be at the mercy of the managing agents from a financial perspective and when it comes to daily matters like the upkeep of the communal areas. Enquire of prospective neighbours if they are happy with their management. In conclusion, find out the dates that you are obliged pay the maintenance charge to the managing agents and precisely what you get for your money. Plenty Birkenhead leasehold apartments will incur a service bill for maintenance of the building set by the management company. Where you purchase the property you will have to pay this charge, normally periodically accross the year. This could be anything from a few hundred pounds to thousands of pounds for blocks with lifts and large common areas. There will also be a rentcharge to be met yearly, normally this is not a large sum, say approximately £50-£100 but you should to enquire as on occasion it could be many hundreds of pounds. If a Birkenhead lease has less than 80 years it will impact the value of the property. Check with your lender that they are willing to lend given the lease term. A short lease means that you will most likely need a lease extension at some point and you need to have some idea of what this will be. Remember, in most cases you would be required to have owned the residence for 24 months before you are entitled to extend the lease.

    Other Topics

    Lease Extensions in Birkenhead