My lawyer has identified a a problem with the lease for the flat we are purchasing in London. The seller’s lawyers have put forward defective title insurance as a workaround. We are happy with insurance and will pay for it. Our lawyer says that he must check that the bank is content with this solution. Who is the client here, us or the mortgage company ?
The short answer to your last question is that, notwithstanding the potential for a conflict of interest, you and the mortgage company are the client. Your lawyer must comply with the UK Finance Lenders’ Handbook conditions. The UK Finance Lenders’ Handbook conditions require your lawyer to disclose issues such as defects with the lease so that the mortgage company can be afforded the opportunity to check with their valuer as to the extent that the value of the property is affected. Should you refuse to allow your lawyer to make the appropriate notification then your solicitor will have no choice but to discontinue acting for you.
I own a freehold premises in London but nevertheless invoiced for rent, why is this and what is this?
It’s unusual for properties in London and has limited impact for conveyancing in London but some freehold properties in England (particularly common in North West England) pay an annual sum known as a Chief Rent or a Rentcharge to a third party who has no other legal interest in the land.
Rentcharge payments are usually between £2.00 and £5.00 per year. Rentcharges date back hundreds of years, but the Rent Charge Act 1977 barred the creation of new rentcharges post 1977.
Previous rentcharges can now be redeemed by making a one off payment under the Act. Any rentcharges that are still in existence in 2037 will be dispensed with completely.
I require expedited conveyancing in London as I am faced with pressure to exchange contracts inside 3 weeks. Luckily I do not need a mortgage. Can I avoid the conveyancing searches to save money and time?
As you are not obtaining a home loan you are at liberty not to have searches conducted although no conveyancer would advise that you don't. With lots of history conveyancing in London the following are instances of what can appear and adversely affect future saleability: Refused Planning Applications, Outstanding Charges, Overdue Grants, Railway Schemes,...
I decided to have a survey done on a house in London prior to instructing solicitors. I have been informed that there is a flying freehold aspect to the property. The surveyor has said that some banks may not give a mortgage on this type of property.
It depends who your proposed lender is. Santander has different instructions from Halifax. If you call us we can check via the appropriate lender. If you lender is happy to lend one our lawyers can help as they are accustomed to dealing with flying freeholds in London. Conveyancing can be more complicated and therefore you should check with your conveyancing solicitor in London to see if the conveyancing costs will increase in light of this.
I have tried to negotiate informally with with my landlord to extend my lease without any joy. Can the Leasehold Valuation Tribunal adjudicate on such issues? Can you recommend a London conveyancing firm to assist?
Most definitely. We can put you in touch with a London conveyancing firm who can help.
An example of a Freehold Enfranchisement decision for a London flat is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case related to 1 flat. The unexpired residue of the current lease was 73.26 years.
What makes a London lease problematic?
There is nothing unique about leasehold conveyancing in London. All leases are unique and drafting errors can result in certain sections are not included. 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 building A duty to insure the building
You could have difficulties when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. Yorkshire Building Society, The Royal Bank of Scotland, and Godiva Mortgages Ltd all have very detailed 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 provide security, forcing the purchaser to withdraw.