“Ask the Expert”
Get all your legal questions answered by our expert Solicitor Emma Selfridge, Head of Conveyancing at Bowden Jones Solicitors.
Q: I am selling my flat but the Estate Agent has told me that my lease is too short. Te lease has 45 years leſt. Why is that a problem? What can I do?
A: A Lease is a contract between you and your Landlord. It will be granted for a set term and is generally 99 years. When a Lease has less than 80 years leſt this becomes a problem where you are looking to sell the Property to a buyer who requires a mortgage. Most lenders do not like lending on short term Leases because they do not give the lender sufficient security for the mortgage loan. Your buyer’s solicitor will ask that you apply to the Landlord for a Lease Extension. Generally, you will be responsible for all the. Te premium will increase as the term decreases. Once you have owned the Property for two years you are able to serve a Notice upon the Landlord to extend the Lease or purchase the Freehold. If you have owned the Property for less than two years the Landlord must be in agreement or you must wait for the two year period.
Q: I am buying a house and my solicitor has told me that there is a “title defect” and I need indemnity insurance to cover the same. Te seller does not want to pay for this. What is a title defect and what is indemnity insurance?
A: A title defect generally involves either missing Deeds or missing Planning Permissions and Building Regulations Consents or breach of a condition or covenant in the title Deeds. Where a title defect is apparent it is standard practice to obtain an indemnity insurance policy to protect you and your lender (if any). As the policy is required because of a title defect it is the seller’s responsibility to either resolve the defect or provide indemnity insurance policy. It is likely that it is not possible to resolve the defect quickly and indemnity insurance will be necessary. Your mortgage lender will insist on the indemnity insurance policy being in place upon exchange and completion. Te policy will require a one-off premium based on the current market value of the Property. Te seller usually deducts this sum from the price for the Property. We call this an
allowance. As the market value of your Property increases, and if you are selling or re-mortgaging, additional payments may be required to ‘top up’ the policy to increase the cover in line with the Property value.
Please note that the above is basic advice. Should you require additional information then please call our team on 02920 484550. If you have any questions that you would like answered within the next edition please email
enquiries@bowdenjones.co.uk.
New Homes Wales and the South West
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