A casual trawl of the internet will unearth a wealth of stories and concerns on leasehold property. Does that mean Leasehold is bad? No not at all. All it means is that some have unfortunate experiences and the smart buyer will plan and map out what they need to know and be prepared.
For the first time buyer the whole process can be daunting and exciting in equal measure. You will face a whole raft of new experiences and emotions. How can anyone know everything they need to know? Of course reading this magazine is a great starting point! But where do you go, how do you find out easily and quickly what you need to know?
There is a lot of guides and information that can clear your path for a successful purchase and happy experience in your first home. By giving some simple steps in this article hopefully you can finish wiser than when you read the headline.
Your first port of call will be the estate agents and the developers selling the flat or house. You want to know if the property is leasehold or freehold. Generally flats will be leasehold. This form of tenure has been around for centuries and there is a wealth of legislation covering the obligations and control of the building. There are many professionals who haven’t uncovered all the intricacies and there is always something else to learn. Only recently I discovered it is a criminal matter to not comply with supply of information. Rarely is anyone prosecuted and we always supply information needed so I hadn’t needed to know!
Make sure when looking at a flat you know the length of the lease, the service charge levels, when were the last audited accounts for the service charge completed and how much is in the reserve fund. The reserve fund or sinking fund is there to finance future major works at the building. Armed with these points will give a good steer in the first instance as to how well the building is managed and what it will cost you each year to pay for the running of the building.
If the seller cannot answer these questions easily then you should be cautious on taking the purchase further. However much you fall in love with the home you have to keep heart and head separate and let the head have its day as you start the purchase process. There will be plenty of time for the heart to rule and do cartwheels in your chest.
Once you find the home of your dreams and assessed your payment commitment each year and its affordability then you need to find a lawyer to handle the purchase. In all things it can be tempting to go to the cheapest because it all seems so expensive. This can be a false economy and I do not mean this to be disparaging to the legal profession. There are a number of cheap conveyancing solicitors that will not understand the complexities of leasehold and for the money they charge cannot do a thorough or complete job on any purchase that is not the simplest or most straightforward.
Make sure that you receive a report on title, a copy of the lease, the management information that will have been passed to your lawyer. As unsexy as it is, you need to relax with your favourite beverage and read the papers and the information. Ask questions to have any points clarified. Ensure you understand what you are buying and what your obligations are. Find out online about the people who manage the building. Find out about the developer.
It is very exciting making that first home purchase and everyone should be able to make a sound decision and have full knowledge of what they are doing. Of course there may be issues and problems going along but the more you understand and prepare during purchase the better prepared you will be to overcome and ensure nothing turns into a disaster.
Following simple advice and getting clear guidance can make sure you have a home to enjoy.