The owners have very pushy sellers who has insisted on a exclusivity agreement with a non-refundable deposit 10k. Is it wise to enter into such agreements?
There are a couple of main concerns with signing a lock out contract (also referred to as a no-shop agreement) is that it diverts attention away from moving forward with the conveyancing process, so in the absence of it needing little or no negotiation then it may transpire to be unhelpful. It is not promoted by Cullompton conveyancing practitioners for this reason. A further concern is the extent of the remedies available - a jilted purchaser should not expect to obtain an injunction to stop the owner completing the sale to a third party, so the only remedy available under the agreement will be the recovery of abortive charges and, in restricted situations, the additional payment of damages.
I am about to put an offer on a leasehold property in Cullompton. The selling agents assure me that it is normal for flats in Cullompton to have less than 75 years left on the lease. I am expecting a mortgage with Nationwide Building Society. Is this going to be a problem if the lease has 72 years remaining.
Most leasehold conveyancing experts should be able to deal with a lease extension. if you are getting a mortgage then your lender may insist that the lease be extended before competition. Nationwide Building Society have specific requirements as set out in the UK Finance Lenders’ Handbook in relation to minimum unexpired lease terms. As of 8/12/2024 the requirements read as follows :
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn Ground Rent (Annual Rent) charges
For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance.
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.
Lease Extensions
We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office.
I completed on my house on 3 September and the transaction details is not yet registered. Any reason for this? My conveyancing solicitor in Cullompton advises it will be recorded in a couple of weeks. Are titles in Cullompton uniquely lengthy to register?
There is nothing unique when it comes to conveyancing in Cullompton registration formalities. Rather than based on location, timeframes can adjust according to who lodges the application, whether there are errors and whether the Land registry communicate with any 3rd parties. At present roughly three quarters of such applications are fully dealt with in less than three weeks but some can be subject to longer hold-ups. Registration is effected after the new owner has moved in to the property so 'speed' is not typically an essential issue yet where there is a degree of urgency associated with the registration then you or your conveyancer should communicate with the Registry to express the reasoning for an expedited registration.
I decided to have a survey done on a house in Cullompton prior to retaining lawyers. I have been told that there is a flying freehold aspect to the property. The surveyor has said that some mortgage companies will not grant a mortgage on such a property.
It depends who your proposed lender is. Santander has different instructions from Halifax. Should you wish to call us we can investigate further via the appropriate mortgage company. If you lender is happy to lend one our lawyers can assist as they are used to dealing with flying freeholds in Cullompton. Conveyancing may be slightly more expensive based on your lender's requirements.
Given that I am about to spend £400,000 on a property in Cullompton I would like to talk to a solicitor about myconveyancing prior to giving the go ahead to the firm. Is this something that you can arrange?
Absolutely - we would be delighted to talk to you we do not take any clients on without you first talking to the conveyancer who will be conducting your conveyancing in Cullompton.There is no ‘factory style conveyancing’ - each client is an important person, not a case number. The practices that we put you in touch with believe that the figure you are provided with for residential conveyancing in Cullompton should be the figure that you are charged.
What can I do where I am unhappy with the property lawyer who undertook our conveyancing in Cullompton?
Occasionally the level of service you receive is not as you expect, and unfortunately every so often things do go wrong. However there is recourse if you were unhappy with your conveyancing in Cullompton. This varies from trying to resolve matters directly with them, through to reporting a lawyer to their regulator. If you remain aggrieved you may consider getting in touch with the Legal Ombudsman.