I am often asked why it takes longer to deal with the purchase of a leasehold flat than the purchase of, for example, a freehold house. There are several factors that can contribute to your sale taking a little bit longer to complete.
What factors can make your leasehold purchase take longer?
Current property law effectively requires that flats, apartments, and maisonettes be leasehold. There are some rare examples of ‘freehold’ flats, but most lenders will not give mortgages on them!
Providing there is a well-written lease and a properly managed building, a ‘leasehold’ flat should provide a good home and a secure investment.
A lease gives a flat owner a right of occupation and use of the flat for a long period, namely, the ‘term’ of the lease. This term can vary with some leases being for 125, 250 or even 999 years. The flat can be bought and sold during the term.
The lease sets out, amongst other things, the obligations and regulations by which the flat owner must abide; the service charge payments due to the landlord towards the maintenance and repair costs to the common parts of the building, towards insurance premiums and other fees; defines the means of access and use, and states the rights other flat owners and the landlord have over the building.
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What should you consider as a buyer?
As a buyer, you, and your mortgage lender, look to property solicitors to ensure that the flat has a ‘good & marketable’ title.
To do this, they must investigate the lease and other title documents sent by the Seller’s conveyancer. It is at this point that, quite often, the time taken to deal with a flat purchase stretches and takes longer to finalise than a freehold purchase.
This is due to the number of further enquiries that need answering and the additional details required from the landlord and/or management company to enable you, the buyer, to make an informed decision on whether you wish to buy the flat.
The Seller’s conveyancer, in effect, becomes dependent on others such as the landlord, the management company, and, occasionally, the resident’s association to provide the answers needed to not only satisfy you as the buyer but importantly to satisfy the lender’s requirements before it will provide a mortgage over the flat.
The longer it takes the Seller’s conveyancer to supply those answers, the longer the transaction will take!
What are the legal criteria for a lease?
Unfortunately, there are no legally defined criteria as to the perfect lease.
The legal requirements for leases have tended to change over the years. What was an acceptable form of lease when first granted twenty years ago may not be in an acceptable form today!
As such, the examination and investigation of any lease takes extra time and more effort (which is why many law firms make an additional charge for that work).
If the lease is unacceptable, this may result in a Deed of Variation being entered; to ensure the lease remains valid and effective for use today. This too will add time to the transaction.
Not sure of the legal criteria? Speak to an expert today.
We are expert solicitors that can help with your leasehold purchase.
Every leasehold case is dealt with on its own merits. If all the documentation is in order, then the purchase of a flat should only take slighter longer than a freehold purchase. Hopefully, being equipped with this knowledge will mean less stress if delays do occur.
Moving home is an exciting time and we’re here to chat with you about any questions you might have about the process.
At Jackson Lees we will act in your best interests, helping you every step of the way to ensure your home move is completed on time. Contact us today, and allow us to expedite your leasehold purchase process