by Saqib Khan | Jun 14, 2023 | Conveyancing
Buying or selling a property is one of the most significant transactions a person will make in their lifetime. It is essential to have an experienced and knowledgeable solicitor to help navigate the legal process of a residential conveyance. One of the primary obligations of a solicitor in a residential conveyance is to protect the lender’s interests.
In a typical residential conveyance, a buyer will need to obtain a mortgage from a lender to finance the purchase. The lender will require a solicitor to act on their behalf to ensure that their investment in the property is secure. This means that the solicitor has an obligation to carry out a thorough investigation into the property’s legal title and ensure that there are no issues that could affect the lender’s security.
The solicitor will carry out a series of checks on the property’s title, including investigating any legal charges, restrictive covenants, and planning restrictions. They will also check that the property’s boundaries are accurate and that there are no rights of way or other easements that could impact the lender’s security. The solicitor will also ensure that the seller has the right to sell the property and that there are no disputes or legal issues that could prevent the sale from proceeding.
Once the solicitor has carried out these checks, they will report to the lender, outlining any issues that have been identified and what steps have been taken to resolve them. The lender will then use this information to decide whether to proceed with the mortgage and, if so, what conditions they will impose. If there are any significant issues with the property’s legal title, the lender may require the seller to resolve them before the sale can proceed.
It is essential to remember that the solicitor’s primary duty is to the lender and not to the buyer. While the buyer may pay for the solicitor’s services, the solicitor’s obligation is to protect the lender’s interests. This means that if any issues are identified that could impact the lender’s security, the solicitor will need to inform the lender, even if it means delaying or potentially preventing the sale.
In conclusion, a solicitor’s obligation to a lender in a residential conveyance is crucial in protecting the lender’s investment in the property. The solicitor’s duty to the lender requires a thorough investigation of the property’s legal title and identification of any issues that could impact the lender’s security. While the solicitor’s services may be paid for by the buyer, it is essential to remember that their primary obligation is to the lender, and any issues identified must be reported to the lender, even if it means delaying or preventing the sale.
Please call us to discuss this or any other property issues. Our conveyancing department would be happy to speak to you during working hours on 0161 850 9911 or at propertyteam@khanmather.co.uk
by Saqib Khan | Jun 8, 2023 | Conveyancing
Real estate is a significant investment, and for many people, it is the most significant financial commitment they will make in their lifetime. Whether you are buying a property to live in or as an investment, it is essential to understand the different types of ownership available. In particular, freehold and leasehold ownership structures are two common forms of property ownership that people often encounter. In this blog post, we will discuss the difference between freehold and leasehold properties.
Freehold Properties
A freehold property is one that is owned outright by the buyer. When you purchase a freehold property, you are buying the property and the land it is built on. This means that you have complete ownership and control over the property, and you can do with it as you wish. Freehold properties are generally considered to be more desirable than leasehold properties because they offer greater control and flexibility to the owner.
As the owner of a freehold property, you are responsible for maintaining the property and paying for any repairs that are required. You can also make changes to the property without seeking permission from anyone else, as long as you comply with any local building codes or regulations.
Leasehold Properties
Leasehold properties, on the other hand, are properties that are owned by the leaseholder for a fixed period, typically between 99 and 999 years. When you buy a leasehold property, you own the property for the duration of the lease, but not the land it is built on. Instead, you pay ground rent to the freeholder, who owns the land.
The freeholder is responsible for maintaining the common areas of the property, such as the communal gardens or stairwells. They may also charge the leaseholder additional fees for maintenance and repairs. The leaseholder is responsible for maintaining the interior of the property, but they must seek permission from the freeholder before making any significant changes or alterations to the property.
One of the main advantages of leasehold ownership is that the initial purchase price is often lower than that of a freehold property. However, there are several disadvantages to leasehold ownership, including the fact that the lease will eventually expire, and the property will revert back to the freeholder. This means that as the lease gets shorter, the value of the property may decrease, and it may become more difficult to sell.
Conclusion
In summary, the main difference between freehold and leasehold properties is that with freehold ownership, you own the property and the land it is built on, whereas with leasehold ownership, you only own the property for the duration of the lease. While leasehold properties can be cheaper to purchase initially, they come with a range of limitations and obligations that freehold properties do not. Ultimately, the choice between freehold and leasehold ownership will depend on your personal circumstances and preferences, and it is essential to consider all the factors carefully before making a decision.
Please call us to discuss this or any other property issues. Our conveyancing department would be happy to speak to you during working hours on 0161 850 9911 or at propertyteam@khanmather.co.uk
by Saqib Khan | Jun 5, 2023 | Conveyancing
Introduction
In the realm of property ownership, leasehold properties have gained significant attention due to the complexities associated with ground rent. Ground rent is a recurring payment made by leaseholders to the freeholder for the use of land. While it has been a customary practice for centuries, the intricacies and potential implications of ground rent have recently come under scrutiny. In this blog post, we will delve into the basics of ground rent in leasehold properties, explore its significance, and shed light on recent developments surrounding this aspect of property ownership.
- What is Ground Rent?
Ground rent refers to the regular payment made by the leaseholder to the freeholder, who owns the land on which the leasehold property is situated. It is typically outlined in the lease agreement and can be an annual or periodic payment. The leaseholder essentially rents the land from the freeholder for a specified duration, which can range from decades to centuries.
- Historical Perspective:
The concept of ground rent has a long history dating back to medieval times when landowners granted long-term leases to tenants. The payment of ground rent served as a recognition of the landlord’s ownership and an acknowledgment of the tenant’s leasehold rights. Over time, ground rent has become a crucial aspect of leasehold property ownership, especially in the United Kingdom.
- Purpose and Implications:
The purpose of ground rent can vary. In the past, it provided a stable income for landowners, while today it may serve as a means of retaining some control over the property or as a way to generate revenue. However, in recent years, concerns have arisen due to escalating ground rent terms and onerous clauses found in some leases. These concerns have highlighted the potential implications of ground rent on leaseholders.
- Escalating Ground Rent:
One issue that has drawn considerable attention is the presence of escalating ground rent clauses. Such clauses stipulate that ground rent increases over time, often at a significant rate. This has led to cases where ground rents become unreasonably high, making properties difficult to sell and causing financial strain for leaseholders.
- Onerous Lease Terms:
In addition to escalating ground rent, some leasehold agreements include onerous terms that can be burdensome for leaseholders. These may include permission fees for alterations, restrictive covenants, or high charges for maintenance and service. Such terms can restrict the leaseholder’s freedom and add unexpected costs.
- Leasehold Reform:
The issues surrounding ground rent have triggered calls for leasehold reform in many jurisdictions. In the United Kingdom, for example, the government has proposed changes to alleviate the concerns of leaseholders. These include plans to ban the sale of new leasehold houses, reduce ground rent to a nominal sum, and simplify the process of extending leases or purchasing the freehold.
- The Future of Ground Rent:
The focus on ground rent has undoubtedly sparked discussions and reforms aimed at improving the leasehold system. The intention is to strike a fair balance between the rights and responsibilities of freeholders and leaseholders, ensuring transparency and protecting the interests of all parties involved.
Conclusion
Ground rent plays a significant role in leasehold property ownership, serving as a financial arrangement between the freeholder and the leaseholder. However, recent controversies surrounding escalating ground rent and onerous lease terms have brought this aspect of property ownership into the spotlight. As reforms take shape, it is crucial for both current and prospective leaseholders to be aware of the implications of ground rent and to thoroughly understand the terms outlined in their lease agreements. By fostering transparency and promoting fair practices, the leasehold system can evolve to better serve the interests of all stakeholders in the future.
Call 0161 850 9911 and speak to one of our Property Law solicitors now.
by Saqib Khan | Jun 4, 2023 | Conveyancing
Leasehold residential properties are a common type of housing in many countries around the world. They are particularly popular in urban areas, where land is scarce and expensive. In this blog, we will discuss leases with regards to leasehold residential properties, including what they are, how they work, and some of the key issues that arise in relation to them.
What is a Leasehold Residential Property?
A leasehold residential property is a type of property where the owner of the property only owns it for a fixed period of time. This period is determined by the lease, which is a legal contract between the owner (known as the landlord) and the occupier (known as the tenant). The lease will set out the terms and conditions under which the tenant can occupy the property, including the rent that they will pay, the length of the lease, and any other obligations that they may have.
How do Leasehold Residential Properties Work?
Leasehold residential properties work by giving the tenant the right to occupy the property for the length of the lease. During this time, they will be responsible for paying rent to the landlord and complying with any other obligations set out in the lease. These may include things like keeping the property in good condition, not making any alterations without the landlord’s permission, and not using the property for any illegal purposes.
At the end of the lease, the property will typically revert back to the landlord, unless the tenant is able to renew the lease or purchase the freehold. This can create uncertainty for tenants, particularly those who have invested a lot of time and money into improving the property.
Key Issues with Leasehold Residential Properties
One of the main issues with leasehold residential properties is the cost of ground rent and service charges. Ground rent is an annual fee that the tenant pays to the landlord for the use of the land on which the property is built. Service charges are fees that the tenant pays to cover the cost of maintaining the common areas of the property, such as the communal gardens or lifts.
In some cases, these fees can be very high, particularly if the landlord has sold the freehold to a third-party company. This can make it difficult for tenants to afford the cost of living in the property, and can also make it harder for them to sell the property when they want to move on.
Another issue with leasehold residential properties is the difficulty of making alterations to the property. Many leases will require the landlord’s permission before any alterations can be made, and this can be a slow and bureaucratic process. This can make it hard for tenants to make the property their own, and can also reduce the value of the property if potential buyers are put off by the restrictions.
Conclusion
Leasehold residential properties are a common type of housing in many countries around the world. They offer tenants the right to occupy a property for a fixed period of time, but can create uncertainty and financial challenges due to the cost of ground rent and service charges. Tenants may also face restrictions on making alterations to the property, which can reduce its value and make it harder to sell. If you are considering buying or renting a leasehold residential property, it is important to carefully review the terms of the lease and seek legal advice if necessary. Please call our conveyancing department to discuss any lease concerns you may have.
Please call us to discuss this or any other property issues. Our conveyancing department would be happy to speak to you during working hours on 0161 850 9911 or at propertyteam@khanmather.co.uk
by Saqib Khan | Jun 3, 2023 | Conveyancing
SDLT, which stands for Stamp Duty Land Tax, is a tax that must be paid when buying land or property in the UK. The tax is calculated based on the value of the property being purchased, and is payable to HM Revenue and Customs (HMRC). In this blog post, we will discuss what SDLT is, how it is calculated, and who is responsible for paying it.
What is SDLT?
SDLT was introduced in the UK in 2003 as a replacement for the old system of stamp duty. It is a tax that must be paid by anyone who buys a property or land in the UK. The amount of SDLT payable depends on the value of the property being purchased.
How is SDLT calculated?
The amount of SDLT payable is calculated based on the value of the property being purchased. There are different rates of SDLT depending on the value of the property. The current rates are as follows:
– Up to £125,000 – 0%
– £125,001 to £250,000 – 2%
– £250,001 to £925,000 – 5%
– £925,001 to £1.5 million – 10%
– Above £1.5 million – 12%
For example, if you are buying a property for £300,000, you will pay 2% SDLT on the amount between £125,001 and £250,000, and 5% on the amount between £250,001 and £300,000. This would give you a total SDLT liability of £5,000.
Who is responsible for paying SDLT?
In most cases, the buyer of the property is responsible for paying SDLT. However, there are some circumstances where the seller may be responsible. For example, if the property is being transferred as part of a divorce settlement or inheritance, the seller may be responsible for paying SDLT.
If you are buying a property, it is important to factor in the cost of SDLT when budgeting for your purchase. You can use the SDLT calculator on the HMRC website to estimate how much SDLT you will need to pay.
In conclusion, SDLT is a tax that must be paid by anyone who buys a property or land in the UK. The amount of SDLT payable depends on the value of the property, and is calculated using a set of rates. The buyer of the property is usually responsible for paying SDLT, although there are some circumstances where the seller may be responsible. It is important to factor in the cost of SDLT when budgeting for your property purchase.
Call 0161 850 9911 and speak to one of our Property Law solicitors now.
by Saqib Khan | Jun 2, 2023 | Conveyancing
Please note that the exact timeline may vary depending on various factors such as the complexity of the transaction, the parties involved, and the location of the property. This timeline is intended to provide a general overview of the process.
1. Instruction: The buyer instructs a conveyancing solicitor to act on their behalf in the transaction.
2. Title Investigation: The solicitor obtains a copy of the title deeds and carries out searches with the Land Registry, local authority, and other relevant bodies to investigate the property’s legal status.
3. Enquiries: The solicitor raises enquiries with the seller’s solicitor to obtain further information about the property, such as any disputes or planning permissions.
4. Mortgage: If the buyer is obtaining a mortgage, the lender will instruct a surveyor to carry out a valuation of the property and the buyer will receive a mortgage offer.
5. The Solicitor reports all the title details and their findings to their Clients along with all the documentation to sign prior to exchange of contracts.
6. Exchange of Contracts: Once the buyer and seller have agreed on the terms of the contract, both parties sign and exchange contracts, and the buyer pays a deposit (usually 10% of the purchase price).
7. Completion Date: The completion date is set in the contract, usually 2-4 weeks after exchange of contracts.
8. Pre-Completion: Prior to completion, the buyer’s solicitor carries out final searches and requests mortgage funds from the lender.
9. Completion: On the completion date, the buyer’s solicitor transfers the balance of the purchase price to the seller’s solicitor. Once the funds have cleared, the seller’s solicitor releases the keys to the property and the transaction is complete.
10. Post-Completion: The buyer’s solicitor registers the property’s change of ownership with the Land Registry and pays any stamp duty due on the purchase.
Please note that this is a general timeline and some steps may overlap or vary depending on the specific circumstances of the transaction.
Please call us to discuss this or any other property issues. Our conveyancing department would be happy to speak to you during working hours on 0161 850 9911 or at propertyteam@khanmather.co.uk
