Articles

Q&A from the City & Angel Magazine Property Expert Column

Hema Anand and Andrew Flint have become the property experts for the City and Angel Magazine. Their monthly column answers reader questions on all residential property issues including buying, selling, developing or buying the leasehold of their homes.

See below for a selection of questions from their column:

I wish to extend the lease of my flat and have obtained a valuation. I have written to my landlord several times to extend my lease but have not received a response. What I should do next?

I assume that you have the correct address for the Landlord? By law, a Landlord is obliged to let you have details of his/her address and this is usually contained in your ground rent and service charge demand.

If so, I would advise that you consider exercising your rights to force the Landlord to grant you a lease term extension. Your rights are contained in legislation known as the Leasehold Reform, Housing and Urban Development Act 1993. Subject to meeting criteria, you can serve a document known as a Notice of Claim which sets out your proposals for acquiring a lease term extension, including the price you are prepared to offer the Landlord. The Landlord is obliged to respond to the Notice of Claim by a date that your solicitor will refer to in the Notice of Claim. If the Landlord does not respond, then you may be able to apply to Court for a declaration that the terms upon which the Landlord should grant you a lease term extension is as per your Notice of Claim. You shall see that it is in the Landlord's interests to make sure he responds to the Notice of Claim. Hopefully, this will bring to an end the impasse that you have reached.

I am buying a property and was wondering if whether or not I need a survey?

You do not say what type of property you are buying. If you are obtaining a mortgage to buy a property, then it is very likely that a valuer will inspect the property on behalf of your lender. Whilst the report gives an indication about the value of the property and if it is worth the amount that you are borrowing, you will probably not be allowed to rely on the lender's valuation report. The report also may or may not be a comprehensive one. For example, it may not cover those issues that are of concern to you.

You should consider either via your mortgage company or independently to arrange for a valuer to carry out a detailed survey known as a Home Buyer's Report. This report would highlight issues for your solicitors to consider, perhaps identify risks such as structural movement, damp, and timber defects. It would also advise on the current market value.

If the property is old or perhaps has undergone a lot of re-development then you may consider obtaining a full structural survey report.

I want to carry out some alterations to my flat. Will I need the freeholder's permission?

This will depend on what your lease says. Each lease is drafted differently but most leases will say that a lessee can make alterations to the flat with the freeholders' consent, such consent not to be unreasonably withheld. Even if a lease doesn't state that the freeholders' consent can't be unreasonably withheld, it is actually implied by statute. Some leases also make the distinction between structural and non structural alterations so you may not actually need permission depending on what you want to do. Occasionally, leases include a strict prohibition against carrying out alterations but this is quite rare. Some freeholders will simply consent to alterations in a letter but others will insist on a formal Licence for Alterations being drawn up which will have to be done at the cost of the lessee. These more formal licences tend to be used in large mansion blocks rather than a converted a property but it will depend on the freeholders' individual approach. You should also bear in mind that you may need building regulation approval for the work and you may also need planning consent particularly if the property is listed.

I am buying a property with my partner and I am not sure how we should own the property. Can you advise us?

There are two ways of owning property jointly; a joint tenancy or tenancy in common. If you own the property as joint tenants, it means that should one of your die, the deceased's share will automatically pass to the survivor. If you own it as tenants in common, it means that should one of your die, the deceased's share passes in accordance with the intestacy rules or instructions left in a Will. Most couples buy properties as joint tenants but it may be more appropriate to have a tenancy in common, for example, if one of you has children from a previous relationship or you contribute towards the price in vastly in equal shares. In these circumstances, it might also be worth thinking about a Declaration of Trust that would set out your respective interests in the property which can also incorporate a mechanism for dealing with the disposal of the property in the event of a breakdown in the relationship.

I am buying a house for £510,000. I understand that stamp duty is paid at the rate of 4% on the purchase price. Is it possible to pay £500,000 for the house and £10,000 for the carpets and curtains etc, so I only have to pay 3% stamp duty?

Stamp duty is not payable on the value of chattels and therefore in theory, it is possible to apportion the purchase price between the property and the chattels. However, in practice, this is much harder to do. The trouble is, there must be a genuine apportionment. In your case, there really needs to be £10,000 worth of chattels that have been left at the property. This is easy to do if lots of furniture is being included in the sale but usually the only items included will be things like the white goods, curtains and carpets. It would be a blatant evasion of tax if, for example, the figure of £10,000 was placed against three pairs of curtains and a five year old washing machine!

Please contact Hema Anand ,Enfranchisement Partner or Andrew Flint, Residential Property Partner for further information or see our enfranchisement or residential property sections

Source: City & Angel Magazine Ask the Expert, August - October 2010

Authors: Hema Anand and Andrew Flint

Date: October 2010

More articles