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Tenancy Deposits    No Comments

The Tenancy Deposit Service  have claimed that up to a million private sector deposit remain unprotected.  Please make sure that you are not one of these landlords.

Failure to protect your deposit could result in a Court ordering that you have to protect the deposit and pay the tenant compensation equivalent to three times the amount of the deposit – if your deposit is £1000, that’s £4000 you will have to pay out, you may also have to pay the tenant’s legal costs.

Further, while the deposit remains unprotected you can not issue a Section 21 Notice (which is the first step towards getting possession).

If you have not protected your deposit yet ensure that it is the first thing you do after reading this.

If you would like any legal advice, please telephone Rebecca Brough at Fidler & Pepper on 01623 448331 or visit our Landlord Legal Advice page

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Service Charge    No Comments

A lot of my clients ask when buying a leasehold property what the service charge and ground rent actually is and what it is for?

Let’s be clear ground rent and service charges are not the same thing.

Ground rent is the money that you pay as a leaseholder to the Landlord or Freeholder for basically renting the land that the leasehold property sits on. This is usually a fixed sum and is paid annually.

The service charge is payment for all the services (such as maintenance of gardens and communual areas) that you as a leaseholder will use but will not be specifically responsible for. This will often be an estimate of what the landlord will anticipate will be for the forthcoming year.

Quite often this will be collected through a management company on behalf of the Landlord or Freeholder.

Under the terms of the lease you will be responsible for paying these amounts.

When purchasing a leasehold property your solicitor will investigate whether the ground rent and service charge has been paid up to date and ask questions such as whether it is likely to increase in the coming year. On completion of your purchase your solicitor will ensure that all arrears have been paid and that you will not be responsible for debts incurred not during your ownership.

If you have any questions about Ground Rent or Service Charges please get in touch by email or by leaving a comment on this blog. Or if you need a leasehold conveyancing quote then use our on-line quote system

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Leasehold extension    2 Comments

Hi, it’s William James here – I specialize in leasehold properties at Fidler & Pepper. I’ve had a few clients recently who have been in the process of selling a leasehold property and discovered that as a result of the term of their lease being around 70 years they have been unable to attract any buyers

In light of this I thought I would put together a brief guide as to why it might (from a sellers point of view) be a good idea to extend your lease before you find a buyer!

· As long as you have lived in your property for at least 2 years you have a statutory right to extend your lease.

· If your flat was built or the lease was granted anytime between the 1960’s and 1980’s your lease will almost certainly fall into the category needing extension attention.

· Most people will want to extend their lease as it can increase the value of their property. As soon as your lease reduces to around 60 years then the value decreases significantly and effectively becomes un-mortgagable. It is therefore difficult (if not impossible) to sell to the vast majority of buyers purchasing with a mortgage.

· Extending your lease can take time (sometimes up to 6 months) so it’s not something you want to leave to the last minute if you are thinking of selling your property!

· The longer you wait to extend your lease and therefore the less that is left on it the more expensive the cost of the extension will be.

· An example of a flat with a 68-year unexpired lease, on a ground rent of £100.00 pa, with a current value of £100k would cost approximately £7k to £8k to extend the lease. The same property, on a lease with only 35 years to run, would be considerably more expensive (£50k to £60k). However if you extend your lease before it has less than 80 years left to run (95 years for example) the cost of this extension would be in the hundreds rather than thousands.

· Property prices have fallen over recent years and this can work to your advantage as any compensation that you pay to the Landlord is linked to the current value of the property and therefore you would pay considerably less today than you would 2 to 3 years ago.

If you have any questions about extending your lease please get in touch by email or by leaving a comment on this blog.

William

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