Pitfalls To Avoid When Selling Your Leasehold Property
When the time comes to sell your leasehold property, the last thing you want is a long, drawn-out process. And yet, all too often, we see leaseholders waiting weeks – or even months – to complete their sale due to issues that could easily have been avoided with a little forward-thinking.
To ensure you don’t suffer the same situation, our sales team have compiled a few tips on pitfalls to avoid when selling your leasehold property:
Requesting information too late
Before you can sell your property, you must pull together all the relevant information, so that the new owner is fully aware of the communal and management situation. Your operator can produce this leasehold enquiry pack, but they need to be given sufficient time to do so.
It’s your solicitor’s role to request the information as part of the conveyancing process. The industry standard states that managing agents should be given 10 working days; urbanbubble actually offer a 5-day turnaround. However, you must factor in contingency time for any questions or delays that arise.
To prevent any hold-ups with the sale, instruct your solicitor to request the leasehold enquiry pack at the earliest opportunity – ideally when a buyer expresses interest in your property.
Not using the correct form
Conveyancing is an intricate process, which is why ARMA and other trade bodies have come together to create a standardised questionnaire for the industry: LEP1. This includes a set of frequently asked questions with regards to the lease, Management Company, insurance, service charges and property maintenance and upkeep.
The information pack will also contain documents such as insurance certificates, annual accounts, service charge budget, AGM minutes and memorandum, and Articles of Association. As such, the LEP1 ensures the buying party receives all the information they need to complete the sale.
When the leaseholder’s solicitors don’t use this form, it brings the risk of slowdown and additional costs that come from further requests for information. So while your solicitor might suggest that you don’t need the full pack, we recommend you insist that they submit the LPE1 standard form. Otherwise, you might end up paying twice or facing delays.
Failing to reconcile service charges
In order to complete the sale, you must ensure that any arrears on the account have been cleared during the conveyancing process. Until the service charge balance has been settled, we cannot transfer the account to a new owner.
Overlooking or delaying service charge reconciliation will have consequences for the sale of your property, so make sure these have been settled – along with any ground rents – before you sell. Ideally, you should also download statements evidencing payments made.
Not providing formal notification
Once the above obstacles have been cleared, your conveyancing process can be rounded off. However, some leaseholders and their solicitors don’t realise we need formal notification that a new owner is taking over, in order to complete the procedure.
This involves sending us the Certificate of Completion and Land Registry Certification within 7 days of the sale, so that we can close your old accounts and set up new ones with the new owner.
Be mindful of these pitfalls when selling your leasehold property; it’s only sensible to avoid any unnecessary delays, expenses or disputes during the process. For more information, ARMA have produced a useful guide on conveyancing.
Looking to sell your property? Our sales team can guide you through the next steps and take the hassle out of finding a buyer. To get started, visit our website, or call 0161 667 7666 today.