Specialist conveyancing articles to inform you about conveyancing for a house or a flat; whether you already own your own home or if you are buying one. These are free to read and written by specialists in this area.

At SAM Conveyancing we give you all the information you need to know written in a way that makes it easy to understand. We also have a panel of conveyancing solicitors should you need someone to help with conveyancing for buying a home, lease extension, remortgage, transfer of equity, collective enfranchisement, independent legal advice or deed of trusts.

Please click, read and enjoy. If you get stuck or need any help then call us and speak to a friendly member of the SAM Conveyancing team - 0333 344 3234 (local call charges).

Leasehold Costs – What Extra Charges does a Buyer Face?

11/10/2019
Leasehold costs - those attached to buying a leasehold flat - are many, compared to those you face when buying a freehold (a house). The extra charges which you face start right from when you initially buy your property.

It's well known that flat owners have to pay leasehold service charges and ground rent, among other continuing charges, before they take up ownership: these are some of the more well known disadvantages of buying leasehold property. 

But if you haven't bought a flat before, it's entirely understandable if you feel caught out by some of the charges you might be expected to pay just to complete your purchase.

This article is all about making sure you're forewarned about some of the more obscure - or at least less commonly talked-about(!) - charges which might crop up.

We would always recommend that you take up a fixed fee conveyancing quote, whether you're buying leasehold or freehold, because these charges are more likely to be covered in your overall fees already and not incur separate costs in the conveyancing for your leasehold price.


Buying Leasehold? Get a Fixed Fee Conveyancing Quote

Leasehold conveyancing is always more complex than if you're buying freehold because additional work has to be carried out because a freeholder is involved. Any property lawyer always has to be more 'on their guard' to ensure that all possible charges and the contract are fair.

You can rely on our experienced lawyers to hand-hold you right up until you move in and our fees are always fixed meaning you don't have to worry about unexpected extra charges cropping up.

* Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels



    1

    Notice of Transfer Fee

When you complete, your landlord/management company may require confirmation of your details as the new purchaser to ensure that their records are updated and they have the correct details for future service charge/ground rent invoices.

This is served in the form of a notice which will be prepared by your solicitor.


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    2

    Notice of Charge Fee

The landlord/management company require confirmation regarding any new mortgages or legal charges that you've obtained and are to be registered against the property.

If needed, the lenders details can be provided for the buildings insurance policy. As with the first item in this list, your solicitor prepares and serves this notice for you.


    3

    Deed of Covenant

This confirms that you abide by and accept any restrictions on your use of the property (restrictive covenants) which might be set down within your lease agreement.

Your solicitor should outline any of these to you and provide you with a copy of the lease to review yourself.

You have to sign the deed in the presence of an independent witness and return it to your solicitor. The landlord/management company normally charges a fee for either preparing this deed, accepting it or both.


    4

    Certificate of Compliance

In some cases there is a restriction on the property title - i.e. the deeds - which stops you being registered as the new property owner unless your landlord/management company has provided a certificate  - a Certificate of Compliance - which confirms that you/your solicitor have done everything you should to conform with the terms of the lease.

These duties would include serving one or both of the notices mentioned previously and making sure that any deeds of covenant required have been signed and provided to them.


    5

    Apportionments of Leasehold Service Charge and Ground Rent

Usually you'll have to pay your service charges and/or ground rent in advance for the year either once a year, 6-monthly or quarterly.

This means that in the year that you buy your seller will have paid these and you might be required to reimburse them from the date of completion to the next payment date/s on which service charges and/or ground rent is/are due.

You effectively then become responsible for any fees due regarding these two charges.


    6

    Service Charge Deficits

Because service charges are paid in advance, when the accounting year ends (31 March) your landlord/management company prepares final accounts to show actual expenditure for the year versus the total of the service charges collected.

If the amount spent is larger than what was collected, then all the leaseholders in your block might be asked to pay the difference/deficit.

As a new leaseholder you'll be asked to contribute your share even though the expenditure might relate to your seller's period of ownership. You can ask your solicitor to try and agree what is known as a retention with the seller's solicitors which would hold back a set sum for a specified period of time.

You can then use this sum to pay for and make good any deficit that arises from the seller's period of ownership. Many solicitor firms charge additionally for getting a retention agreed - this is well worth checking when you read through the terms and conditions attached to a leasehold purchase conveyancing quote.


    7

    Consent to Alterations or Letting

Your landlord/management company might charge you a fee if you're looking to carry out works/alterations to your property or are intending to let it to a third party under a tenancy agreement if your lease specifically states that the landlord/management company must consent before either is undertaken.

It's well worth informing your solicitor if you're considering either of these options because they can review or vary the lease or try and get further information for you.


    8

    Stock or Membership Transfer

If as a new leaseholder in your block you're required to become a member of the management company, you might find that some administrators charge you a fee for transferring the share or membership in the management company into your name.


Buying Leasehold? Get a Fixed Fee Conveyancing Quote

Leasehold conveyancing is always more complex than if you're buying freehold because additional work has to be carried out because a freeholder is involved. Any property lawyer always has to be more 'on their guard' to ensure that all possible charges and the contract are fair.

You can rely on our experienced lawyers to hand-hold you right up until you move in and our fees are always fixed meaning you don't have to worry about unexpected extra charges cropping up.

* Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels



Related Articles
Certificate of Compliance
14/08/2019
Guide to buying a leasehold
01/11/2017
Leasehold
07/10/2019
Leasehold Flats: No Pets Allowed?
04/02/2019
Leasehold Information Pack
23/06/2017
What are Leasehold Service Charges?
09/12/2019
What is Ground Rent?
03/11/2017