Frequently asked questions relating to Victoria leasehold conveyancing
My fiance and I may need to rent out our Victoria ground floor flat temporarily due to a career opportunity. We used a Victoria conveyancing firm in 2004 but they have since shut and we did not have the foresight to get any advice as to whether the lease prohibits the subletting of the flat. How do we find out?
The lease dictates the relationship between the landlord and you the flat owner; specifically, it will set out if subletting is banned, or permitted but only subject to certain conditions. The rule is that if the lease contains no expres ban or restriction, subletting is permitted. Most leases in Victoria do not contain an absolute prevention of subletting – such a clause would adversely affect the market value the property. In most cases there is simply a requirement that the owner notifies the freeholder, possibly sending a copy of the sublease.
Having checked my lease I have discovered that there are only 68 years remaining on my lease in Victoria. I now wish to extend my lease but my landlord is missing. What are my options?
On the basis that you qualify, under the Leasehold Reform, Housing and Urban Development Act 1993 you can apply to the County Court for for permission to dispense with the service of the initial notice. This will enable the lease to be granted an extra 90 years by the magistrate. You will be obliged to demonstrate that you have done all that could be expected to track down the landlord. On the whole a specialist would be helpful to carry out a search and prepare an expert document which can be accepted by the court as evidence that the freeholder can not be located. It is wise to seek advice from a solicitor both on investigating the landlord’s disappearance and the application to the County Court covering Victoria.
I am attracted to a two apartments in Victoria which have approximately fifty years remaining on the leases. should I be concerned?
A lease is a legal document that entitles you to use the premises for a prescribed time frame. As a lease shortens the saleability of the lease decreases and results in it becoming more expensive to extend the lease. For this reason it is often a good idea to increase the term of the lease. It is often difficult to sell a property with a short lease because mortgage companies may be reluctant to lend money on such properties. Lease enfranchisement can be a difficult process. We recommend you seek professional assistance from a solicitor and surveyor with experience in this arena
I've recently bought a leasehold flat in Victoria. Do I have any liability for service charges for periods before 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. Strange as it may seem, 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 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 work for a reputable estate agency in Victoria where we have experienced a few flat sales put at risk as a result of short leases. I have received contradictory information from local Victoria conveyancing solicitors. Please can you clarify whether the vendor of a flat can initiate the lease extension process for the buyer?
Provided that the seller has been the owner 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 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 prior to, or simultaneously with completion of the disposal of the property.
An alternative approach is 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.
I inherited a garden flat in Victoria. Given that I can not reach agreement with the freeholder, can the Leasehold valuation Tribunal determine the premium payable for a lease extension?
Absolutely. We are happy to put you in touch with a Victoria conveyancing firm who can help.
An example of a Lease Extension matter before the tribunal for a Victoria property is Flats 12A & 19, Evelyn Mansions Carlisle Place in June 2009. The Tribunal held that the price to be paid for the new lease of Flat 12A is £168,824, For the other flat the price was set at £169,110 This case related to 2 flats. The unexpired lease term was 56 years.
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