Hi Folks, here we are, another month and another blog and this time, on a different topic completely, the law!

Buying and selling a property can be confusing to say the least and that is before you even get to the conveyancing part.

On 21 December 2017 the Government announced plans to tackle the growing problem of newly built houses sold as leasehold rather than freehold, and to limit ground rents on new lease agreements. Leasehold reform was included in the Law Commission’s Programme of Law Reform with the aim of finding ways to make buying a freehold or extending a lease “easier, faster, fairer and cheaper.”

In The Queen’s Speech 2022 “The Government will be taking forward a comprehensive programme of reform to improve fairness and transparency in the leasehold market. The Law Commission’s work on leasehold reform is now complete and will become law from 31^st May 2022.

There are around 4.6 million leasehold homes in England, according to estimates from the Ministry for Housing, Communities and Local Government (MHCLG). Long leaseholders buy the right to live in their homes for the term of the lease. Around 68% of these are flats, while 32% are houses. Most flats in the private sector are leasehold (an estimated 93% of owner-occupied flats and 73% of private-rented flats). Leasehold houses are uncommon across England, at around 8% of the stock. There’s evidence indicating that developers had started to sell new-build houses on long lease agreements as this can represent a lucrative future income stream.

Leaseholders report a range of problems, including: high service charges and a lack of transparency over what they are being charged for; freeholders who block attempts by leaseholders to exercise the Right to Manage; excessive administration charges and charges for applications to extend lease agreements or enfranchise; and a lack of knowledge over their rights and obligations.

From the end of May, estate agents and other property businesses must include length of lease, amount of service charge and ground rent and whether the property is in a shared ownership scheme when marketing properties. This information is absolutely essential to buyers finding out from the start whether a property is worth pursuing or not (e.g., is the lease so short they won’t be able to get a mortgage).

What does this information include? Perhaps most significant is that details of tenure of the property (how you own a property) must be disclosed, this includes the following categories:

1. leasehold
2. freehold
3. commonhold

Currently most reputable estate agents and property professionals are in the midst of obtaining the relevant information required to comply with this new legislation, however it is not an easy task as some of the property owners are not even aware of what their exact lease terms mean to them. There are some developments in our area that are indeed freehold but also have a leasehold element, including the cost of maintaining communal outdoor areas or the cost of electric and maintenance of gates in gated communities etc: –

The story here at Cross Keys Estates is no different. We are speaking to vendors and their solicitors to obtain this newly legally required information. The best way is to get a physical copy of the lease, that way we can quote the lease details directly. If a copy of the lease is not immediately available, then maybe either talk to the solicitor that is either doing or committed to doing the conveyancing on the property. Unfortunately, we cannot just take the vendors word for this information anymore as it forms an integral part of the Government’s reform for the housing market.

If you would like a personal chat with me to see if now is the right time for you to sell or rent out your property, please feel free to either give me a call on 01752 500099 or 01752 500018 or pop in to our Stoke office where I or one of my experienced property consultants will be only too happy to see if we can help.

You get what you pay for

For those of you who are new to the house buying game, as the title says, choosing a solicitor to do your legal work can be very challenging to say the least. There are two types of people that can do the legal work for you, the first is a “licensed conveyancer” and the second is a “solicitor”. Both of these groups will do the same job but a firm of solicitors will usually have a dedicated conveyancing department to deal with selling, buying property, lease extensions, probate and remortgage and equity transfers. Some buyers and sellers look online to compare the prices for these services and although this does seem logical to ensure that you get a good price for this service, as an estate agent of 20 years I can tell you that this is probably the worst thing possible for you to do. If you cannot go in to see the person dealing with this, do not use them. During any property transaction there will be a lot of issues that get raised and have to be answered before contracts can be exchanged, usually this entails lots of running around trying to get the relevant information back to your chosen conveyancer. It is always much easier if you can get a face to face meeting and thus ensure that the right questions and answers are being given.

As an estate agent selling hundreds of properties in Plymouth and the surrounding areas, we often have buyers and sellers telling us that they are going to use an online company to fulfil the legal obligation. My first response to this is often to check out the online reviews for these companies, sometimes we already have had experience in dealing them so we are often able to offer a firsthand account of how good or not their services are. The main issue for these big call centre based conveyancing firms is that all the legal groundwork is carried out by paralegals or administrative assistants (not the qualified person that you think), all this paperwork is then put into a file for a solicitor or conveyancer to sign off. Usually in these firms there are several different teams in several different locations and sometimes they don’t always coordinate very well leading to lengthy delays in the purchase or sale process and this in turn can lead to huge amounts of frustration to both sides of the transaction.

In Plymouth and many other cities around the country, there are lots of different covenants on properties. These can vary from things such as “You cannot have chickens at this property”, “You cannot run a business from this property”, “You cannot alter the front fascia of this building” or one of the most common ones being ”You cannot split this property into multiple dwellings”. Plymouth has all of these covenants and many more besides. A lot of them are no longer enforceable but a surprising amount of them are enforceable and this often catches buyers out as it can change their decision as to complete the purchase or to pull out altogether. You can get around some of these covenants by having an indemnity policy to protect you from them being enforced but again using an online firm that does not know the area, or the idiosyncrasies that we have, often leads to poor advice being given and usually a sale will fall through as a result.

There is an old saying “You get what you pay for” this is certainly true when it comes to conveyancing in England. Just because they may be cheap, doesn’t mean that you will be happy. At Cross Keys Estates, we regularly offer our clients several quotes from local solicitor firms so that they can compare local prices, that added to the fact that we have sat in the middle of thousands of property sales, means that we can help you make the right choice for you to ensure that you have a smooth house buying/selling process.