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Snowball

Pitfalls of buying a leasehold flat

Are there any?
WE have figured out that we are not going to use the vendors' estate agent linked solicitors no matter how nice and helpful they want to be.
Obviously we need to see the lease agreement and service charges in writing. Is there anything else we can demand that may make reference to future maintenance costs or anything like that?
Jamanda

Our first flat was leasehold - no issues at all.
microbiz

Both my sister and daughter have had probs with residents(or sub-let tenants?) in flat above. Overflowing their bath and flooding ceiling, and boiler sprung leak - ditto.
A lot depends on which floor you're on and how lucky you are with neighbours and landlord.
T.G

Just make sure the lease has plenty of time left on it, you can renegotiate and purchase a longer lease but this can take time; so allow for this in the time on the lease for sale.
Katieowl

Yes ask if there is any major work planned that you have to contribute towards!

Also check the length of the lease against how long you want to stay there for...there is a figure beneath which it's difficult to sell without extending it. Some building societies won't give a mortgage if they don't think the lease is long enough.

Kate
Bebo

There is usually a service charge or charge for maintenance of communal facilities. So if the roof looks like it's had it be aware, as you may end up paying a proportion of the cost of replacement.
JB

The very fact that you are asking the question should indicate one of the drawbacks. Any potential buyer in future will ask themselves the same question so if and when you want to sell it will be less attractive to any potential buyer. It doesn't matter whether the reluctance is irrational or not, it is real and could be a problem.
Bebo

Length of the lease is also an issue when it comes to resale. If you're buying with a 200 year lease then no worries. If its an 80 year one and you intend to stay there for a while then it might be more of an issue.
RichardW

If I remember right when we had a "price realignment" in the late 80's early 90's (might have been a bit later) the first & worst hit were the leasehold flats with most owners going in to deep negative equity.
dpack

as above and any disputes may require a good lawyer as the lease contracts are often open to interpretation

the word bargepole can be inserted in a suitable sentance
joanne

Re: Pitfalls of buying a leasehold flat

Are there any?
WE have figured out that we are not going to use the vendors' estate agent linked solicitors no matter how nice and helpful they want to be.
Obviously we need to see the lease agreement and service charges in writing. Is there anything else we can demand that may make reference to future maintenance costs or anything like that?


I wouldn't worry too much about the fact that the estate agents have a linked solicitors - this is quite common and is just a way of getting work passed to them, it's a very tough market for conveyancers out there at the moment and they are having to work much harder and more competitively than they've ever done, especially with the introduction of what is commonly known as 'Tesco Law' which opens up the market to 'other' providers. There are alot of solicitors merging or going under at the moment as their bread and butter work ie conveyancing is disappearing

Under the rules in the SRA Handbook that came into force last October each solicitor performing conveyancing services has to be seen to be conforming to the code of conduct which requires them to comply with the following

“provide a proper standard of service to your clients” by “taking into account the individual needs and circumstances of each client.”

and ensure that clients are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them.

They also have to have systems in place to monitor risk and ensure that all 3rd party search providers are accredited by the Council of Property Search Organisations (CoPSO).

Any good solicitor should perform a number of searches based on the postcode, these will include

1) A drainage and water search to identify where the drainage is, who is responsible etc,

2) A local council search using either a personal search company if your lender allows them (they are often cheaper) or an official search by going straight to the council. Depending on the area and the property you are buying they may look at roads and surrounding areas for any applications for development and there are numerous other additional questions such as common land, pipe lines, houses in multiple occupation, noise abatement etc

3) Any local hazards such as flooding, radon, coal, limestone, brine (mainly Cheshire), ball clay, china clay and if the High Speed 2 proposed rail route is within 5000 metres - this is usually covered by a residential environmental search from either Groundsure or Landmark, although there are specific extra searches needed for coal mining areas and areas where china clay is mined

4) A Land Registry search to establish title and any covenants held on the property, if its already registered with the Land Registry (ie previously sold after about 1990), the results should be pretty instant although they are a right royal pain in the backside and if there are big lease documents they haven't always scanned them in so there is a delay

For a flat that has a leasehold (pretty common), there will be 2 searches needed at the land registry, the lease documents and the freehold documents, this should reveal most of the issues you are worrying about

You also need another Land Registry product when you are about to complete to prevent someone else coming in and placing a charge on the property before you - For freehold or standalone properties its known as as OS1 - Official Search with Priority and for Flats or sometimes new builds it's known as an OS2 - Official Search of Part with Priority

Beyond that, is up to your individual solicitor and the needs of the property, there can be a Chancel search done if you are in a village or area where there is likely to be a Chancel Repair liability for the local church or transport searches for cities to see how near the trams or underground run.

Hope that helps

BTW, I only know all this because I work for a company that provides all these searches as a 'one stop shop' - We don't do the searches ourselves, we just provide the technology to do it all from one place and not have to go to each supplier individually and over time the conveyancing requirements tend to sink in Smile
Snowball

Thank you all very muchly.
WandaBlue

Are you buying a new lease from the Landlord or an existing lease from the current tenants? This will make a difference to what LR search your solicitor applies for. If it's the former it'll be an OS2 but if the latter it will only be an OS1. Also if it's a new lease your solicitor will need to make sure it contains a suitable plan and this plan will also be attached to the OS2. If the plan is not up to standard both applications would be rejected by LR. As an ex-LR employee I would never buy leasehold.
I have also had to deal with a lot of problems from solicitors who don't actually know a lot about conveyancing over the years. It's one of their best earners but very few of them seem to really understand what they're doing. One solicitor once said to a colleague of mine 'I should have stuck with litigation, it was easier'! Thankfully leases are a bit more straightforward these days but they were never my favourite thing to deal with.
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