Last month I purchased a leasehold flat in South Hornchurch. Am I liable to pay service charges for periods before completion of my purchase?

In a situation 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. However, your landlord may still be able to take action to forfeit the lease. A critical element 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 am a negotiator for a busy estate agency in South Hornchurch where we have experienced a number of leasehold sales jeopardised due to short leases. I have received contradictory information from local South Hornchurch conveyancing firms. Could you shed some light as to whether the seller of a flat can commence the lease extension formalities for the purchaser on completion of the sale?

Provided that the seller has owned the lease 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 need not have to wait 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 sale.

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 buyer.

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

If you are instructing a conveyancer for your lease extension (regardless if they are a South Hornchurch conveyancing firm) it is most important that they be familiar with the legislation and specialises in this area of work. We recommend that you speak with several firms including non South Hornchurch conveyancing practices before you instructing a firm. If the firm is ALEP accredited then so much the better. Some following of questions could be helpful:

• How experienced is the practice with lease extension legislation?
• If they are not ALEP accredited then what is the reason?

Can you provide any advice for leasehold conveyancing in South Hornchurch from the perspective of speeding up the sale process?

• Much of the frustration in leasehold conveyancing in South Hornchurch can be bypassed where you appoint lawyers as soon as you market your property and request that they start to collate the leasehold information needed by the purchasers’ representatives.
• The majority landlords or Management Companies in South Hornchurch charge for supplying management packs for a leasehold premises. You or your lawyers should find out the actual amount of the charges. The management pack sought as soon as you have a buyer, thus accelerating the process. The average time it takes to receive management information is three weeks. It is the most common cause of frustration in leasehold conveyancing in South Hornchurch.
• Some South Hornchurch leases require Licence to Assign from the landlord. If this is the case, you should notify your estate agents to make sure that the purchasers put in hand financial (bank) and professional references. Any bank reference will need to confirm that the buyers are able to meet the yearly 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 service charge figures so that they can pass this information on to the buyers or their solicitors.
• If you have had conflict with your landlord or managing agents it is essential that these are resolved before the property is put on the market. The buyers and their solicitors will be concerned about purchasing a flat where a dispute is ongoing. You will have to accept that you will have to pay any arrears of service charge or settle the dispute prior to completion of the sale. It is therefore preferable to have any dispute settled ahead of the contract papers being issued to the buyers’ solicitors. You will still have to reveal particulars of the dispute to the buyers, but it is better to reveal the dispute as historic rather than unsettled.
• You may think that you are aware of the number of years remaining on your lease but it would be wise to double-check via your lawyers. A purchaser's conveyancer will be unlikely to recommend their client to proceed with the purchase of a leasehold property the remaining number of years is below 75 years. It is therefore essential at an early stage that you consider whether the lease requires a lease extension. If it does, contact your solicitors before you put your home on the market for sale.

After years of dialogue we cannot agree with our landlord on how much the lease extension should cost for our flat in South Hornchurch. Does the Leasehold Valuation Tribunal have jurisdiction to calculate the appropriate figures?

if there is a missing freeholder or where there is dispute about the premium for a lease extension, under the relevant legislation it is possible to make an application to the First-tier Tribunal (Property Chamber) to assess the price.

An example of a Lease Extension case for a South Hornchurch premises is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case related to 1 flat. The unexpired lease term was 57.5 years.

Are there frequently found problems that you see in leases for South Hornchurch properties?

There is nothing unique about leasehold conveyancing in South Hornchurch. All leases is drafted differently and drafting errors can sometimes mean that certain clauses are erroneous. For example, if your lease is missing any of the following, it could be defective:

• A provision to repair to or maintain parts of the property
• Insurance obligations
• 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. Lloyds TSB Bank, Norwich and Peterborough Building Society, and Aldermore all have express requirements 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 grant the mortgage, obliging the buyer to pull out.

Leasehold Conveyancing in South Hornchurch - Sample of Queries Prior to buying

Does this lease have more than 85 years unexpired? It is important to be aware whether changing the roof or some other major work is due in the foreseeable future to be shared by the leasehold owners and will materially impact the level of the service costs or necessitate a specific payment.