There is always a lot of information on the internet warning you about buying a leasehold property so here is a guide as to what the difference is between leasehold and freehold and why leasehold ownership makes sense for some types of properties.

The main differences between freehold and leasehold are as follows:-

1. leasehold you do not own the property you in fact lease it for the  number of years stated in the lease  (there is however a statutory right to extend this);
2. you will  frequently have to pay rent to the landlord;  
3.  you will frequently have to pay service charges to cover for the maintenance of shared facilities such as shared gardens , lifts and any other communal areas within the building ;
4. the lease will provide rules as to how the tenants must or must not act  for example not to keep any pets or play loud music. If these rules are breached ,  it is possible for the landlord to forfeit the lease which  would result in you losing your property;

So why have a leasehold property? If the property you are buying is a flat then leases provide important rules and rights for the tenants such as rights of support from the other flats and the building or rights of way over the stairs. The lease  should also  provide that all the flats  are be regulated in the same way i.e. the same policy on pet s  being  kept in the flat . 

Some estates are sold as leasehold properties for example if there are common areas and so the residents all pay to the upkeep of the landscaped areas.

There are lots of occasions when a property should rightly be leasehold.

It is important that you instruct a solicitor who specialises in leasehold property so that they can advise you fully on the terms of the lease to make sure that it is suitable for you.

The benefit you have with instructing Fidler and Pepper is that we offer a no sale no fee so if something comes up with the lease that means you do not wish to proceed you will not have to pay our legal fees ( you will still have to cover the payments for disbursements such as searches).

If you do wish to obtain a quote for buying or selling a leasehold property please visit we would be happy to provide you with a fixed fee quote.

Why would you look to extend your lease?

As the length of the remaining term decreases so does the value of the lease. Further if you plan to have a mortgage on the property or you are planning to sell the property, you or the proposed buyer may have difficulties obtaining lending on the property unless there is at least 55 years left on the term i.e. 30 years plus the mortgage term. Some lenders will ask that there is at least 70 years on the left on the lease term.

You must have owned the the flat for 2 years to be able to applying if successful you will be granted a further 90 years plus the remainder of the term of the current lease.

It is best to increase you lease term early on as if the lease has 80 years or more then you will not have to pay a sum of money to the landlord when you seek the extension, this is called the marriage value.

You will need to serve a notice on the landlord, this notice must include certain information and we would suggest that you instruct an expert to assist you with this.

If you are planning to sell the property and have you have concerns that the lease term will put off potential buyers it is possible that provided you have served a claim notice that you can transfer the right to seek the extension to the new buyer. this avoids the buyer having to wait 2 years before they can seek the extension.

At Fidler and Pepper we have a specialist leasehold team that can help with such enquiries. If you would like us to provide you with a quote for a lease extension or if you require any further information on this matter please do not hesitate to make contact with me, climb@fidler.co.uk or 01623 448302.

Christie Limb

Partner

SDLT may be payable by a tenant when they take on a lease. This is based on the Net Present Value. The HMRC provide a useful tool for calculating the SDLT payable.

The calculation is based on the highest known rent in the first 5 years of the lease. If there is a rent review in the first five years then once this has taken place a further SDLT return is required and any SDLT due has to be paid.

Rent reviews after the first 5 years are ignored save for abnormal rent reviews. Abnormal rent reviews only apply to leases granted after the 1st December 2003. The tenant needs to assess whether the rent reviews is abnormal, there is a calculator on the HMRC but the calculation is quite complex. If the rent review is abnormal then any SDLT due will need to be paid.

SDLT is a complex area and therefore we would always suggest that our clients take specialist advice on such.

Christie Limb

You will almost certainly have noticed in the press over the last week or so the proposals for the second phase of the new high speed rail network or HS2.

This will affect numerous properties and businesses in the East Midlands.  The Department for Transport will have already written to the properties and business that the HS2 that are close to the proposed route.  It is anticipated that construction of the route will start in 2016 and between now and then there will be a programme of land referencing to identify specifically the properties that will be affected by this.

Once the properties are identified, they owners will be contacted and the potential compulsory acquisition and the process in general will be discussed.

The principle behind compulsory purchase is the it must benefit society as a a whole and be for the greater public good. Only organisations or bodies such as the  local authority, highways agencies and Regional Development Agencies can force you to sell your home.  

The price that you get for your property is basically no more than the market value plus a grant for the inconvenience and relocation costs. The amount you receive is just the market value and not the ‘ransom value’ your property may have by virtue of the fact that it is pivotal to the route of the rail link. If your house is located in an area which has a depressed market this could reduce significantly the amount that you will be paid.

In addition to the statutory compensation code, the secretary of state has asked that proposals for discretionary measures be brought forward, aimed at mitigating as far as is reasonably possible, the effect of the project on property markets, and on peoples’ lives.  Further announcements about these proposals will be forthcoming but are likely to  include:

• a sale and rent back scheme for properties required for compulsory purchase, which would give people more choice as to when they left their property
• the advance payment of a compensation claim, for example, to aid relocation.

If you have received such a letter or are concerned that your property may be affected by the recent proposals and would like cheap cialis online more information on this then please drop William James a line on 01623 451111 or alternatively email me on wjames@fidler.co.uk or visit our website.

The third and final instalment of my recent blogs on pop up shops is concerned with the potential pitfalls that are experienced with short term lets over commercial properties.

In my previous blog on this subject we discussed the different types of agreements for short term occupation of premises.

SDLT (StampDutyLand Tax)

Tenancies at Will and Licences are exempt from SDLT unless they form part of an agreement for lease and then this may trigger a charge as the contract has been substantially performed.

Security of Tenure

Generally, short term leases are not subject to any protection by statute and therefore the tenant cannot ‘force’ the landlord to extend the term of the lease. This is a general rule and the landlord can find that by granting consecutive leases for more than buy cialis 12 months or where there is provision to extend the lease passed 12 months the tenant is able to get some protection.

The statutory protection does not apply to licences and tenancies as they are not construed as business tenancies for the purposes of the relevant legislation, in this case the Landlord and Tenant Act 1954.

From a tenants point of view this does not offer them much protection which could either be a bad or a good thing depending on your view point. The argument is that the whole concept of pop up shops is that it gives the tenant greater flexibility.

If you need further information on this subject please contact me at wjames@fidler.co.uk or contact me on 0162345111. Alternatively you can visit our website for more information on what we do.

Anyone walking down a High Street in the UK at the moment cannot fail to notice the amount of disused shops and retail units. Of the available units many are either disused and empty or being occupied by pound or charity shops. This environment has resulted in a new phenomena emerging, that of the pop up shop.

A pop up shop or temporary shop has been called an “innovative way in which businesses are adapting to changing trading conditions” by the British Retail buy viagra online Consortium but are they actually a good use of the empty properties and from a legal point of view what is the implications of this type of occupation.   

The concept has been around for quite a few years but it is only recently that businesses have adopted them. Essentially it can be a less risky strategy for both Tenant and Landlord in these uncertain economic times.

The Government has also mooted the relation of  planning permission to allow the change of use of the property to be easier and thereby make it more attractive for both Landlords and Tenants to use the premises for purposes not previously envisaged as the cost from a change of use perspective did not make it attractive enough.

Please read my later blogs on the considerations that both Landlord and Tenant should look into before embarking on this type of occupation. Alternatively, give me call or drop me an email in the Commercial Department at wjames@fidler.co.uk or on 01623 45111.

The Local Data Company’s (LDC) have reported on the 28 November 2012 that there has been the first significant drop in shop vacancies in 2012.  The level of vacancies dropped from   14.57% to 14.41% from September to October 2012.

They report that not since December 2011 has the rate of empty shop premises fallen below 15%.  With Christmas and the new year sales in front of us hopefully matters will only improve.

There seems to have been a change in the markets with large retailers closing branch shops whilst independent sellers are now on the increase with it being reported that  in the top  650 town centres independent shops account for 68%  of the units.

Leasing a unit?

If you are a landlord or tenant interested in leasing a unit please cialis contact me if you need any assistance I am happy to provide a fixed fee quote for the work.

Christie Limb

In the legal profession matters that have gone to court can decide what you can and can’t do in the future.
This is called setting a precedent.
There is a significant case happening in the estate agency world.
The matter involves the sale of property where there was mine shaft near the property. The estate agent was aware of the mine shaft and a number of sales had fallen through for this reason.
A new purchaser was found and paid for searches and survey. This revealed the mine shaft and he pulled out of the transaction and then sued the estate agents for the costs of £515 arguing that they should have disclosed the existence of the mine shaft.
He used the Consumer Protection from Unfair Regulations 2008 , a new piece of legislation and was successful.
The estate agent is appealing this decision.
The estate agent will argue that he is acting in the seller’s best interests and trying to get the property sold and

any buyers should carry out all searches and enquiries before proceeding (called Caveat emptor). They will argue that they don’t have a duty to any buyer.

However buyers are also consumers and can now claim protection under consumer legislation.
My view is let’s have cards on the table and if there is a problem disclose it and deal with it in the best light possible. Arguably it is not in the best interests of the seller to have a number of aborted sales either.
My views don’t count but I will looking with interest to outcome of the appeal in February.

conveyancing quote is here if you want one.

Matt Slade

If you are planning to purchase a commercial property at an auction you will need

to consider the following:-

1. the legal documents- these will be available before the auction and I suggest that you take legal advice on them so that you know the property before you commit to buying such;

2. funding – when you buy a property at an auction you will usually only have 14-28 days to complete the purchase and therefore if you are not buying with cash you need to find funding available. There are lending opportunities out there but I suggest that you make enquiries into such and to knwo that you will have the funds available for the purchase before committing to such;

3. go and view the property;

4. if you are thinking of leasing the property consider making enquiries with local letting agents to find out what the likely rental income would be;

5. if the property is already subject to a lease take legal advise on such as the tenant may have the right to remain there for a number of years and this may affect any plans that you have to occupy or develop the property.

If you have any questions in respect of a commercial property that you are planning to buy at an auction please contact me Christie Limb on 01623 448302 or climb@fidler.co.uk  I would be happy to assist you or provide you with a quote for the work if you are successful in buying the property at the auction.

Christie Limb

Your first question will be what is one?

Essentially it is an arrangement whereby someone guarantees or strands as a guarantor for a tenant that is being assigned a lease.

Typically this will occur when a lease is assigned to a new tenant and the outgoing tenant (under the terms of the lease) is asked to stand as a guarantor for the new tenant.

When considering a lease for the first time this is an important consideration. This will have an impact on you as the tenant if you are entering into a long lease and may at some point consider assigning your lease (such as needing to move to bigger premises). Essentially you will still have liability in respect of the lease once you have moved on.

This is a fairly standard requirement from the Landlord’s point of view and will almost always be included in the lease that you are asked to enter into. That said and depending on your negotiating position you may be able to negotiate that it is deleted. Although it would

appear that the commercial property market is beginning to improve slightly it is still very much a tenants market and if the Landlord is struggling to lease the property you may be able to have this provision successfully removed.

Another consideration is when you are setting up a new business and the lease is taken by a company that has limited its liability. The Landlord would almost certainly require that you as the director also stand as a guarantor (essentially defeating the benefit of the company being limited). This should be an important consideration as if the company or venture is not successful the you would be liable under the terms of the lease. Depending on the rent and the length of the lease this could be serious liability.

If you are considering taking on a lease and want some advice in relation to your obligations or potential pitfalls why don’t you drop us a line  in the commercial department on 01623 451111 or email me on wjames@fidler.co.uk