Estate agents have just been given the go-ahead to market my basement flat in Shoreditch.Conveyancing lawyers have not yet been instructed but I have just received a quarterly maintenance charge invoice – what should I do?

The sensible thing to do is clear the service charge 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. Having a clear account will assist your cause and will leave you no worse off financially.

I am looking at a couple of apartments in Shoreditch both have about fifty years remaining on the lease term. Do I need to be concerned?

There are no two ways about it. A leasehold flat in Shoreditch is a wasting asset as a result of the reducing lease term. The closer the lease gets to its expiry date, the more it reduces the marketability of the premises. The majority of buyers and lenders, leases with under eighty years become less and less marketable. On a more positive 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 Shoreditch conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. More often than not it is possible to negotiate informally with the freeholder to extend 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 the agreed 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 am a negotiator for a long established estate agency in Shoreditch where we see a few leasehold sales jeopardised as a result of short leases. I have been given inconsistent advice from local Shoreditch conveyancing solicitors. Could you clarify whether the owner of a flat can commence the lease extension process 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. This means that the proposed purchaser 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 needs to be completed prior to, or simultaneously with completion of the sale.

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 purchaser.

If all goes to plan we aim to complete the sale of our £400000 flat in Shoreditch next Friday . The managing agents has quoted £312 for Landlord’s certificate, building insurance schedule and 3 years statements of service charge. Is it legal for a freeholder to charge exorbitant fees for a flat conveyance in Shoreditch?

For most leasehold sales in Shoreditch conveyancing will involve, queries regarding the management of a building inevitably needing to be answered directly by the freeholder or its agent, this includes :

• Answering pre-exchange enquiries
• Where consent is required before sale in Shoreditch
• Copies of the building insurance and schedule
• Deeds of covenant upon sale
• Registering of the assignment of the change of lessee after a sale

Your conveyancer will have no control over the level of the charges for this information but the average costs for the information for Shoreditch leasehold property is £350. For Shoreditch conveyancing transactions it is customary for the seller to pay for these costs. The landlord or their agents are under no legal obligation to answer such questions most will be willing to do so - albeit often at exorbitant prices where the fees bear little relation to the work involved. Unfortunately there is no law that requires fixed charges for administrative tasks. Neither is there any legal time frame by which they are obliged to supply answers.

I inherited a ground-floor 1950’s flat in Shoreditch. Given that I can not reach agreement with the freeholder, can the Leasehold valuation Tribunal make a decision on the amount due for the purchase of the freehold?

Absolutely. We are happy to put you in touch with a Shoreditch conveyancing firm who can help.

An example of a Lease Extension decision for a Shoreditch residence is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case affected 2 flats. The unexpired lease term was 72.39 years.

Are there frequently found defects that you see in leases for Shoreditch properties?

Leasehold conveyancing in Shoreditch is not unique. All leases is drafted differently and drafting errors can result in certain provisions are erroneous. For example, if your lease is missing any of the following, it could be defective:

• Repairing obligations to or maintain parts of the property
• A duty to insure the building
• A provision for the recovery of money spent for the benefit of another party.
• Service charge per centages that don't add up correctly leaving a shortfall

You may have a problem when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Halifax, Virgin Money, and Barclays Direct all have express requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease is problematic they may refuse to provide security, obliging the purchaser to withdraw.

Other Topics

Lease Extensions in Shoreditch