Leasehold changes…at last!| New homes division
The feeling of euphoria experienced when you sell your house and find your dream home is short lived when you sit down and calculate exactly how much the move is going to cost.
From estate agents fees, solicitors fees, stamp duty land tax and removal costs, the list seems never ending. To then discover that because you own a leasehold property you are liable to further costs seems to be rubbing salt in the wounds.
More often than not your Landlord or Management Company will have employed a firm of Managing Agents to look after the communal areas surrounding your property and, upon sale, you are required to provide your buyer’s with a whole raft of information appertaining to the charges that you pay to the Managing Agents. Securing this leasehold information can severely delay your sale and is often expensive and just another of those seemingly endless costs from the pot of money you are sitting on.
The news that James Brokenshire, Secretary of State for the Ministry of Housing, Communities and Local Government had made a series of announcements with regard to leasehold reform and in particular around securing leasehold information for clients from lease administrators and curbing the cost of getting that information to not more than £200, and that it should be delivered within 15 working days, is therefore long overdue.
When selling leasehold property there is, more often than not, a requirement for you to provide a standard leasehold property enquiry form (LPE1) which is to be completed by the Landlord/Management Company/Managing Agents. The fee charged for your lease administrator to complete the LPE1 can range from £150 to £400 and it can take between two to four weeks for the information to be provided.
The Government has now confirmed that they will introduce legislation to cap the fee payable for the sale information in the LPE1 to that which is accurately reflective of the work involved in producing it and for that to be no more than £200. In addition, they have stated that there is to be a £50 cap on the refreshment of the information so that you can obtain the information at the point of marketing your property knowing that if, for whatever reason, you do not exchange contracts within six months it will only cost £50 to renew the information.
By far the most impactful point in the announcement is the requirement that the information should be delivered within 15 working days. More often than not a leasehold property transaction automatically adds three weeks to the entire purchase process. Indeed, in over 30% of leasehold transactions it takes the lease administrator more than 50 days to produce the LPE1. The changes therefore have the potential to knock three weeks off the average leasehold transaction.
The further good news is that the Secretary of State has made it clear he expects there to be no transitional provisions once the legislation comes out and the intention is to forge ahead and implement the Ministry’s work by requiring lease administrators to produce the information in the LPE1 for no more than £200 and within 15 working days so as to ensure you are no longer the subject of unreasonable costs and ridiculous delays in obtaining the information you need and are paying for.
For further information about leasehold properties, or to discuss any other aspect of residential conveyancing, please contact Thursfields Head of New Homes, Louise Jones on 0121 796 4021 or at email@example.com