Selling or Buying a Leasehold Property - An Insight into the Process

Leasehold properties in conveyancing transactions can add an extra layer of complexity that can sometimes lead to delays. Understanding the potential hurdles associated with leasehold transactions is crucial for both buyers and sellers to ensure a smoother and more efficient process.

Leasehold properties come with a lease agreement between the property owner (landlord) and the buyer (leaseholder). Delays can arise when the lease documentation is incomplete or contains ambiguous terms. As your solicitors, we will thoroughly review and clarify these documents at the outset to prevent future complications.

As leasehold properties approach the end of their lease term, buyers often seek lease extensions. Mortgage lenders have minimum lease terms that they will accept, it is important to make sure your leasehold property is mortgageable from both a seller and buyer perspective. Negotiating these extensions can be a time-consuming process, involving legal consultations and agreements between the parties. If relevant to your transaction, it is important to start these negotiations as soon as possible. 

Leasehold transactions often require approval and a management pack from the freeholder, who owns the land on which the property stands.

The management pack includes several documents in relation to property you are selling, for example, service charge/ground rent information, completed leasehold property enquiry form, proposed future works for the property, management account history, building insurance details and budgets for future financial periods. 

Obtaining this information can be a bottleneck, especially if the freeholder is unresponsive or has a lengthy approval process. A management company may also be in place, a company hired by property owners to oversee the day-to-day operations and maintenance of the leasehold property. If you plan to sell your leasehold property, it would be very useful to start making enquiries with your management company/freeholder to obtain information on their processes and requirements as soon as the property is on the market.

While leasehold properties offer unique opportunities, potential delays lurk in the intricate details of their transactions. Both buyers and sellers must approach these transactions with a keen awareness of the specific challenges associated with leasehold arrangements. 

At Thomas Flavell and Sons, thorough our due diligence, clear communication, and proactive resolution of potential issues we pave the way for a smoother and more efficient leasehold property transaction.  If you would like to hear more about our conveyancing services, please contact our team today.