My partner and I intend to remortgage our maisonette in Newton Heath with Bank of Ireland. We have a son approaching twenty who lives at home. Our solicitor requested us to identify any adults other than ourselves who lives in the flat. Our lawyer has now e-mailed a document for our son to sign, giving up any rights in the event that the flat is forfeited by the lender. I have a couple of questions (1) Is this document specific to the Bank of Ireland conveyancing panel as he did not need to sign this form when we remortgaged 4 years ago (2) Does our son by signing this giving up his entitlement to inherit the property?
On the face of it your lawyer has done nothing wrong as it is established procedure for any occupier who is aged 17 or over to sign the necessary Consent Form, which is purely to state that any rights he has in the property are postponed and secondary to Bank of Ireland. This is solely used to protect Bank of Ireland if the property were re-possessed so that in such circumstances, your son would be legally obliged to leave. It does not impact your son’s right to inherit the apartment. Please note that if your son were to inherit and the mortgage in favour of Bank of Ireland had not been discharged, he would be liable to take over the loan or pay it off, but other than that, there is nothing stopping him from keeping the property in accordance with your will or the rules of intestacy.
I own a freehold premises in Newton Heath yet invoiced for rent, why is this and what is this?
It’s unusual for properties in Newton Heath and has limited impact for conveyancing in Newton Heath 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 have existed for hundreds of years, but the Rent Charge Act 1977 barred the creation of new rentcharges from 1977 onwards.
Old rentcharges can now be redeemed by making a lump sum payment under the Act. Any rentcharges that are still in existence in 2037 is to be dispensed with completely.
I have been on the look out for a leasehold apartment up to £195,000 and identified one round the corner in Newton Heath I like with amenity areas and station in the vicinity, the downside is that it only has 61 years on the lease. There is not much else in Newton Heath suitable, so just wondered if I would be making a grave error purchasing a short lease?
If you require a mortgage the shortness of the lease will be a potential deal breaker. Discount the offer by the amount the lease extension will cost if it has not already been discounted. If the existing proprietor has owned the property for at least 2 years you may ask them to start the process of the extension and pass it to you. An additional ninety years can be extended on to the current lease term with a zero ground rent applied. You should speak to your conveyancing solicitor regarding this matter.
I am tempted by the attractive purchase price for a couple of maisonettes in Newton Heath both have in the region of forty five years remaining on the leases. Will this present a problem?
There is no doubt about it. A leasehold flat in Newton Heath is a wasting asset as a result of the reducing lease term. The nearer the lease gets to its expiry date, the more it reduces the salability of the property. The majority of purchasers and mortgage companies, leases with under eighty years become less and less marketable. 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 a 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 Newton Heath conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. More often than not it is possible to negotiate informally with the freeholder to extend 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 acquired a studio flat in Newton Heath, conveyancing having been completed half a dozen years ago. Can you give me give me an indication of the likely cost of a lease extension? Equivalent properties in Newton Heath with a long lease are worth £221,000. The ground rent is £50 per annum. The lease terminates on 21st October 2089
You have 70 years left to run we estimate the price of your lease extension to range between £9,500 and £11,000 as well as professional fees.
The figure above a general guide to costs for renewing a lease, but we cannot give you a more accurate figure without more detailed investigations. You should not use this information in tribunal or court proceedings. There are no doubt additional issues that need to be taken into account and you obviously should be as accurate as possible in your negotiations. You should not take any other action placing reliance on this information without first getting professional advice.
I've found a house that appears to tick a lot of boxes, at a reasonable figure which is making it all the more appealing. I have just found out that it's a leasehold rather than freehold. I am assuming that there are particular concerns purchasing a house with a leasehold title in Newton Heath. Conveyancing solicitors have not yet been appointed. Will they explain the issues?
Most houses in Newton Heath are freehold and not leasehold. In this scenario it’s worth having a local conveyancer used to dealing with such properties who can help the conveyancing process. It is clear that you are purchasing in Newton Heath in which case you should be looking for a Newton Heath conveyancing solicitor and check that they are used to transacting on leasehold houses. As a matter of priority you will need to check the number of years remaining. Being a leaseholder you will not be at liberty to do whatever you want with the house. The lease will likely included provisions such as requiring the landlord’spermission to carry out changes to the property. You may also be required to pay a maintenance charge towards the upkeep of the estate where the house is located on an estate. Your conveyancer should advise you fully on all the issues.