I am looking at a two apartments in Stockport both have in the region of forty five years unexpired on the leases. Should I regard a short lease as a deal breaker?

There is no doubt about it. A leasehold flat in Stockport is a deteriorating 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. The majority of purchasers and mortgage companies, leases with under 75 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 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 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 Stockport 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 work for a long established estate agency in Stockport where we see a few flat sales put at risk due to leases having less than 80 years remaining. I have been given contradictory information from local Stockport conveyancing firms. Please can you clarify whether the vendor of a flat can start the lease extension process for the purchaser on completion of the sale?

As long as the seller has owned the lease 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 buyer can avoid having 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 before, or simultaneously with 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 purchaser.

What are your top tips when it comes to choosing a Stockport conveyancing practice to carry out our lease extension conveyancing?

If you are instructing a conveyancer for your lease extension (regardless if they are a Stockport conveyancing practice) it is most important that he or she should be familiar with the legislation and specialises in this area of work. We suggested that you speak with several firms including non Stockport conveyancing practices prior to instructing a firm. If the firm is ALEP accredited then so much the better. Some following of questions might be helpful:

• How many lease extensions have they carried out in Stockport in the last year?

Our conveyancer has advised that he intends to complete and exchange simultaneously on our sale of a £350000 apartment in Stockport on Wednesday in a week. The landlords agents has quoted £420 for Certificate of Compliance, insurance certificate and previous years service charge statements. Is the landlord entitled to charge an administration fee for a flat conveyance in Stockport?

Stockport conveyancing on leasehold apartments normally requires the purchaser’s solicitor submitting questions for the landlord to address. Although the landlord is not legally bound to address such questions the majority will be willing to do so. They are at liberty charge a reasonable administration fee for answering enquiries or supplying documentation. There is no upper cap for such fees. The average fee for the information that you are referring to is £350, in some situations it exceeds £800. The administration charge levied by the landlord must be accompanied by a summary of rights and obligations in relation to administration charges, without which the invoice is not strictly payable. Reality however dictates that one has no choice but to pay whatever is demanded if you want to sell the property.

What makes a Stockport lease defective?

There is nothing unique about leasehold conveyancing in Stockport. All leases is drafted differently and legal mistakes in the legal wording can sometimes mean that certain sections are not included. The following missing provisions could result in a defective lease:

• A provision to repair to or maintain parts of the premises
• A duty to insure the building
• A provision for the recovery of money spent for the benefit of another party.
• Maintenance charge proportions which don’t add up to the correct percentage

You could encounter a problem when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. Accord Mortgages Ltd, The Mortgage Works, and Nottingham Building Society all have very detailed conveyancing instructions when it comes to what is expected in a lease. Where a lender has been advised by their lawyers that the lease does not cover certain provisions they may refuse to provide security, obliging the purchaser to pull out.

Leasehold Conveyancing in Stockport - Sample of Queries before Purchasing

How many of the leaseholders are in arrears for their service charge payments? Does the lease contain onerous restrictions? Many Stockport leasehold properties will have a service charge for maintenance of the block set on behalf of the management company. If you purchase the flat you will have to pay this charge, normally in instalments during the year. This could be anything from several hundred pounds to thousands of pounds for bigger purpose-built blocks. In all probability there will be a rentcharge for you to pay annual, this is usually not a exorbitant figure, say around £50-£100 but you need to check as on occasion it could be surprisingly expensive.

Other Topics

Lease Extensions in Stockport