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Recently asked questions relating to Portland leasehold conveyancing

I have just appointed agents to market my ground floor apartment in Portland.Conveyancing solicitors are to be appointed soon but I have just received a half-yearly service charge invoice – Do I pay up?

The sensible thing to do is 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 unless 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.

I've found a house that seems to meet my requirements, at a great price which is making it more attractive. I have since been informed that it's a leasehold rather than freehold. I am assuming that there are particular concerns buying a house with a leasehold title in Portland. Conveyancing advisers have are soon to be appointed. Will they explain the issues?

The majority of houses in Portland are freehold rather than leasehold. This is one of the situations where having a local solicitor used to dealing with such properties who can assist with the conveyancing process. We note that you are buying in Portland so you should seriously consider shopping around for a Portland conveyancing practitioner and check that they have experience in dealing with leasehold houses. First you will need to check the number of years remaining. As a tenant you will not be at liberty to do whatever you want to the property. The lease will likely included provisions such as requiring the freeholder’sconsent to carry out alterations. You may also be required to pay a service charge towards the maintenance of the communal areas where the house is part of an estate. Your solicitor should advise you fully on all the issues.

Back In 2001, I bought a leasehold house in Portland. Conveyancing and Virgin Money mortgage went though with no issue. A letter has just been received from someone saying they have taken over the freehold. It included a demand for arrears of ground rent dating back to 1992. The conveyancing practitioner in Portland who acted for me is not around.Any advice?

The first thing you should do is make enquiries of HMLR to be sure that this person is in fact the new freeholder. It is not necessary to incur the fees of a Portland conveyancing lawyer to do this as you can do this on the Land Registry website for a few pound. Rest assured that in any event, even if this is the legitimate freeholder, under the Limitation Act 1980 no more than 6 years of rent can be collected.

I am attracted to a couple of apartments in Portland which have in the region of forty five years remaining on the lease term. Should I regard a short lease as a deal breaker?

There are no two ways about it. A leasehold apartment in Portland is a wasting asset as a result of the reducing lease term. The closer the lease gets to its expiry date, the more it adversely affects the marketability of the premises. For most purchasers and mortgage companies, leases with under eighty years become less and less attractive. 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 premises 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 property 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 Portland 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 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.

Can you provide any top tips for leasehold conveyancing in Portland from the perspective of speeding up the sale process?

  • A significant proportion of the delay in leasehold conveyancing in Portland can be reduced if you appoint lawyers as soon as your agents start marketing the property and ask them to put together the leasehold documentation which will be required by the purchasers’ representatives.
  • In the event that you altered the property did you need the Landlord’s consent? In particular have you installed wooden flooring? Portland leases often stipulate that internal structural alterations or laying down wooden flooring require a licence issued by the Landlord acquiescing to such works. Should you dont have the consents to hand do not contact the landlord without checking with your solicitor before hand.
  • Some Portland leases require Licence to Assign from the landlord. If this applies to your lease, it would be prudent to place the estate agents on notice to make sure that the purchasers obtain bank and professional references. Any bank reference should make it clear that the buyer is 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 actual amount of the service charge so that they can pass this information on to the purchasers or their solicitors.
  • If you have had conflict with your freeholder or managing agents it is very important that these are resolved prior to the flat being put on the market. The purchasers and their solicitors will be nervous about purchasing a flat where there is an ongoing dispute. You may need to swallow your pride and discharge any arrears of service charge or resolve 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 details of the dispute to the buyers, but it is better to reveal the dispute as over rather than ongoing.
  • You believe that you know the number of years remaining on your lease but it would be wise to double-check by asking your conveyancers. A purchaser's conveyancer will be unlikely to recommend their client to where the remaining number of years is under 80 years. In the circumstances it is important at an early stage 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.

    • I purchased a studio flat in Portland, conveyancing formalities finalised half a dozen years ago. Can you let me have an estimate of the premium that my landlord can legally expect in return for granting a renewal of my lease? Comparable properties in Portland with an extended lease are worth £175,000. The average or mid-range amount of ground rent is £60 yearly. The lease finishes on 21st October 2094

    With only 70 years left to run the likely cost is going to be between £8,600 and £9,800 plus legals.

    The figure that we have given is a general guide to costs for renewing a lease, but we are not able to supply a more accurate figure in the absence of comprehensive due diligence. You should not use this information in a Notice of Claim or as an informal offer. There may be additional concerns that need to be taken into account and you obviously should be as accurate as possible in your negotiations. Please do not take any other action based on this information before getting professional advice.

    Other Topics

    Lease Extensions in Portland