Leasehold Management Packs
When you are purchasing a flat one of the things that your solicitor will usually wish to see is a leasehold information pack or information form (with the catchy label of LPE1). This is usually prepared by the landlord and or the managing agent. This pack contains information about the day to day running of the building and whether ground rent and service charges payments payable by the current flat owner have been paid up to date. This is important as a landlord does not have to chase the former owner for historical payments but can simply chase you, and you do not want to be responsible for your seller’s debts when you move into the property.
The lease to the property explains what needs to happen when there is a change of ownership and the leasehold information pack should contain details of how the process is managed and what fees you will have to pay to the landlord/manager on completion.
Notice of transfer and charge
Following completion of a flat purchase, your solicitor is usually required to give the landlord or manager the details of the buyer and the details of the buyer’s mortgage company if there is one. This is so that the landlord has up to date information of the owner and who to contact to demand payment of service charges, ground rent and also for contacting generally. The landlord/manager charges a fee for accepting the notice and this will be payable by you, the purchaser.
Deed of Covenant
A deed of covenant is a document that you will sign to confirm that you will comply with all of rules contained in the lease including making the payments to the landlord or managing agent that are required in the lease, for example service charges and ground rent. This is a formal deed and it is legally binding on the tenant. The deed is usually prepared by the landlord/managing agent, but in some cases can be drawn up by your solicitor. There will be a fee payable to the landlord for the deed to be drafted and accepted on completion.
Licence to Assign
In some Leases written approval is required from the Landlord before the seller can transfer the Lease to you. The Licence is a document which is prepared by the Landlord which you will be required to sign. The Landlords solicitor will charge a fee for preparing the Licence and this would usually be payable by the seller.
If the Landlord is a company you may receive a share in the company. The seller will need to transfer their share to you on completion and this can be done by the seller signing a form to confirm that the share can be transferred and by handing over their share certificate. Your solicitor will pass this form and the sellers share certificate to the Landlord/Managing Agent on completion and will ask for the share certificate to be issued in your name. There is usually a fee payable for the transfer of shares and an additional fee where the seller hasn’t kept their share certificate.
For more information about leasehold property transfers contact Coral Milner in the conveyancing team.