One unhappy leaseholder in London is facing a massive £420,000 charge to renew the lease on their Chelsea property. The bill, to renew a lease with only 23 years left to run, prompted an unsuccessful challenge in the Court of Appeal to the current lease renewal valuation system.
With 4.1 million leasehold properties across England and Wales, the ramifications of the ruling will be felt by many homeowners.
Protecting your rights and interests
Buying or selling leasehold can be a complicated and potentially expensive business. When you buy leasehold, you are buying what remains of the lease, which is effectively a contract with the land owner, and January’s court ruling has shown how essential it is to have as long a lease as possible in place.
Ideally a lease should run into hundreds of years – some run for 999 years – but many have less than 100 years remaining and some properties are sold with as few as 40 years left. When the lease expires, the property reverts to the freeholder, or land owner.
The less time remaining on a lease, the lower the value of the property. Meanwhile, many mortgage lenders are reluctant to lend on property with a short lease, and by short, we mean less than 90 years. It’s crucial that you engage a solicitor or conveyancing specialist who can protect your rights and interests during any transaction.
Engage the right solicitor
Homeward Legal’s nationwide panel of solicitors are experts in the property field who will make the essential enquiries regarding the length of lease left in place and identify the annual charges that are levied on leaseholders, including ground rent, maintenance fees and monthly service charges.
Many of the precise details of the responsibilities and costs that a leaseholder must pay are often hidden in the small print of a contract to buy a leasehold property. It’s essential to engage a solicitor who knows how the leasehold system works and can ask the right questions of a freeholder or the management company that often collects the ground rent.
Ensure you’re not facing a financially ruinous bill further down the line when buying a leasehold property. Call Homeward Legal today on 0800 038 6699 to get the right solicitor for you.