Moving home has always been a very stressful experience. Selling your leasehold flat or house can prove to be problematic. The process appears confusing and something over which you have no control.
The Leasehold & Freehold Reform Bill aims to tackle and provide solutions for many common issues encountered by homeowners.
Let’s look at some of these now:-
Extending your lease
Historically, there has been no regulation over the length of a lease required when new leasehold properties were created. This has led to properties having varying lease terms, some of which will need to be extended. There is a statutory right to extend your lease, but at present you have to wait two years before being able to start the process. This time will be scrapped under the new legislation, leaving you free to extend your lease when you want.
The current legislation states that you must pay your landlord’s legal and valuation fees as well as your own. Some unscrupulous professionals have sent some very large bills to leaseholders, considerably adding to the costs of a lease extension. It is proposed that this be scrapped entirely. Leaseholders will only be liable for their own costs. This will in effect reduce the cost of a lease extension.
The current entitlement for an extended lease is 90 years for a flat and 50 years for a house. As time passes, this has meant that you can have to repeat the process and incur the costs for a second time. The proposal contained in this Bill that all leases be extended by 990 years – not something that would need repeating again in our lifetimes.
Sales Information Requests
When selling or refinancing your leasehold property, you will need to obtain a Leasehold Property Enquiry (LPE1) form completed by whoever is responsible for running your building. There are presently no limits on how long it can take for this information to be provided or indeed how much it will cost. The process isa gain unregulated and no sanction can be bought against very high costs or very long waits. The new legislation will introduce Sales Information Requests. Time limits and costs will be embodied into the legalisation to make them cheaper and quicker to provide in the conveyancing process.
Service Charge Demands
At the moment, requests for leaseholders to pay service charges come in all shapes and sizes. It is proposed that in future that all service charge demands come in a specified form and contain specific information. This will make them easier to understand and create uniformity.
To conclude, the Leasehold & Freehold Reform Bill is currently working its way through the legislative process. Although there is no guarantee that the current provisions will be changed, hopefully the intention to speed up, clarify and reduce the costs of dealing with leasehold properties will be bought into law.
Speak with Angela Badcock or our Residential Property team to find out how we can best assist you in your house move.