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

When many clients approach us they generally have already agreed the new terms of their lease.  Very often however they have not negotiated the terms of their lease very well or at all.  The market is considerably more tenant friendly and as such you should consider the following as items a tenant should consider when re-negotiating.

Rent

You should always attempt to get the rent to be decreased. Unlike a normal rent review during the term of the lease which will almost certainly be upwards only, on renewal you can re-negotiate the amount that you pay.

Rent-free

Does the property need any works carried out. Rather than the landlord doing this could you as the tenant carry out the works but not pay any rent for the period that they are being carried out?

Break clauses

You should look to insert break clauses at regular intervals to ensure that this gives you as much flexibility for your business as possible and to suit your needs. However, this may result in higher rents to rent penalties.

 Repair

You should always resist any attempt to insert into the new lease any obligation to put or keep the property in repair. Depending on the length of the lease this may be a significant expenditure at the end of the lease. If the landlord refuses to have this removed then you should insist that a schedule of repair is included in the lease to record the condition of the property when you took it on.

Alienation or transferring the lease

You should attempt to have as much control over who you transfer the lease to and limit the consents that you need to obtain to do this. This should be applicable for when you transfer or assign the lease and when you underlet or grant sub-tenancies.

Service Charge

You should ensure that this is as low as possible and that it is capped so that it does not become a ‘blank cheque’ clause for the Landlord.

Rent Review

If the landlord insists that this is included then please ensure that it is downwards as well as upwards. You should also pay close attention to the assumptions contained in the rent review provisions.

User Clause

This needs to be as wide as possible and allows you to diversify slightly if required.  You should also consider that a restrictive clause will limit who you can assign or sublet to.

Monthly rent payments

Look at how and when the rent is paid. This can have a significant impact on your business cash flow. Generally you would want monthly payments to assist with your cash flow.

If you are thinking of renewing your lease and buy cialis online want to chat about any concerns why not drop us a line for an informal chat on your concerns on 01623451111 or wjames@fidler.co.uk. Alternatively you can visit our web page for more information on commercial property.

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.

I published a blog last week regarding the influx of pop up shops on the high street at the moment. Economically, this makes a lot of sense and is good for the high street generally but how does a tenant occupy the premises if they do not enter into a full commercial lease of the property?

Generally a landlord will ask you to enter into either a licence for occupation, tenancy at will or a periodic tenancy.

A licence for occupation is for a short period of time and does not give the tenant an interest in the property with the knock on effect buy cialis online that the Landlord can enter the premises at any time.  They can also be drafted so as to allow the landlord a right to share occupation with the tenant.

A tenancy at will is a more formal agreement for occupation which in theory is for an indefinite period of time but generally can be terminate on notice being given by either party. This type of agreement can be modified to suit either the landlord to the tenant to their individual requirements. Quite often they arise at the end of a pervious lease whereby the exiting tenant finds that they revert of this type of agreement. They are not as secure for the tenant as a full commercial lease for a defined period of time.

A periodic tenancy is a tenancy agreement for fixed intervals or periods of time that run concurrently to each other. Typically the term or period will be how often the rent is paid which quite often is either weekly or monthly. They tend to be more applicable for residential property rather than commercial.

All of the above carry with them their own benefits and pitfalls. Please keep an eye out for my further blog for more details on this or alternatively, if you want to discuss this in more detail contact me at wjames@fidler.co.uk or on 0162345111. You can also visit our website http://www.fidler.co.uk/comm_conveyancing/index.cfm

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.

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