May the miracle of Easter brighten your life with love, happiness and joy.

Further to the Government’s announcement yesterday evening, and the clear instruction on all non-essential businesses to be closed, we will be closing our offices to the general public until further notice.

However, we will continue to be available to assist and manage emergency related issues.  We will still be available via email on management@victormichael.com/ accounts@victormichael.com

This has become a necessity to protect our clients, staff and contractors.

For those facing financial difficulties, have contracted Covid-19, are self-isolating or are self-employed, the Government has released advice on what you can do to get financial assistance, please visit https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19/support-for-those-affected-by-covid-19

If your tenant has been layed or has been informed that they have been let go due to the above, we have asked them to provide written proof of the same.

However, the Government has prepared a ‘wage package’ called the ’Coronavirus Job Retention Scheme’, where:

“…all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.”

We have urged Tenants to should speak to their employers about this to see whether it would apply to them.

In the meantime, the following extract details specifically tenants and Landlords:

If you are experiencing financial difficulties meeting your mortgage repayments because of COVID-19, you may be entitled to a mortgage or rental holiday for 3 months. This includes if you are a landlord whose tenants are experiencing financial difficulties because of COVID-19. If you are a tenant experiencing financial difficulties because of COVID-19, the government will ensure you do not face the threat of eviction for at least 3 months:

• the government has agreed with mortgage lenders that they will offer repayment holidays of 3 months to households in financial difficulty due to COVID-19
• this will also apply to landlords whose tenants are experiencing financial difficulties because of COVID-19
• emergency legislation will be taken forward so that landlords will not be able to start proceedings to evict tenants for at least a 3 month period. This applies to private and social renters
• at the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances

Essentially this means that, during the next 3 months, tenants who have difficulty in paying their rent, will be ‘protected’ from being evicted, however, this does not mean that rents are not due/waived, but deferred/delayed.

During the next 3 months, it is recommended that rents is paid as much as possible, after which both sides are expected to agree affordable payment plans to clear arrears and cover future rental amounts due.

We have been in discussions with HomeLet, our Rent Guarantee provider, who has confirmed to us that, at present, they will meet their obligations with existing policies but we would need to make you aware that the policy contains a clause regarding ‘Force Majeure’, which they may decide to enact

‘Force Majeure’ means “unforeseeable circumstances that prevent someone from fulfilling a contract”.

However, please note that any legal action will the subject to the above ‘protection’ for those who have been directly affected by Covid-19.

Separately, they have informed us that they are not accepting any new applications, until further notice.

It’s important to ask potential conveyancing solicitors the right questions, to ensure your purchase goes as smoothly and quickly as possible.

Conveyancers are an important part of the homebuying process. A good conveyancing solicitor can help things run smoothly, but this largely depends on who you choose to work with and what service you get from them. And the only way to find that out is by asking the right questions before you instruct them.

1. How much will you charge?

Yes it’s a pretty obvious one but you’d be surprised how many people fail to ask this at the start of the conveyancing process. It’s important to get quotes from a few different conveyancers to ensure you’re getting a good deal.

Most conveyancing quotes will include third party costs (or disbursements) such as the cost of local authority searches and Stamp Duty. If a quote seems surprisingly low, it could be that third party costs aren’t included in the conveyancing fees. Ask for an itemised quote so you can see what the conveyancer’s time actually costs.

2. Who will handle my case?

The most experienced solicitor in the firm may give you the quote, but often you’ll find it’s the junior team member who actually works on your case. That’s not necessarily a bad thing. For straightforward sales the conveyancing process should be pretty standard and nothing a newly qualified solicitor couldn’t handle.

However, it’s important to know who is working on your case so that you can build a relationship with them and, in the event you run into issues and need to speak to someone for clarification or a concern. If your case is a little more complex (for example, buying a leasehold property where you will want to discuss restrictions and costs associated with being a leaseholder), you may prefer a more experienced solicitor. Ask for the name of the person that you will be speaking to in that instance.

3. How often will I hear from you?

Trust us, there is nothing worse than radio silence when you’re in the house buying process. You’re on tenterhooks, desperate for everything to go ahead as planned and your solicitor has suddenly gone to ground. No updates, no calls. Frustrating is an understatement. At the same time, you don’t want to be calling everyday when they are trying to progress your case.

You can avoid this frustration by having a frank discussion with your conveyancer at the start of the process about what level of communication is reasonable and when you can expect to hear from them.

4. Which bodies are you a member of?

Conveyancing solicitors should be members of professional bodies such as the Law Society and the Council of Licensed Conveyancers. Check which professional body they’re a member of before appointing them.

5. Have you dealt with many cases like mine?

Not all home sales are the same. Yes, there’s the run of the mill, three bedroom 1930s semi but there’s also a host of factors that can make things a little more complicated. And if your conveyancer isn’t accustomed to cases like yours, it could hold the whole process up and mean you aren’t getting the level of service you need. If you’re buying a leasehold or buying a new build home, for example, you’ll be much better off opting for a solicitor who has dealt with similar properties before.

6. What costs will I have to pay if the sale falls through?

It’s important to ask your conveyancing solicitor how much you’d need to pay if the sale falls through. It is possible to find firms that offer ‘no move, no fee’, but you should double check what that means in reality. For example, does it mean that you still need to pay third party costs? Do you need to pay for an insurance policy to be eligible for this, and if so how much will the premiums be?

It’s common for disbursements (the cost of searches and out-of-pocket expenses incurred by the firm) to be excluded from most ‘no sale no fee’ quotes. However, if you’re unsure whether to progress with a a purchase – for example if you are still finalising your financing, or waiting for survey results – you can always instruct the lawyers but ask them not to incur any expenses yet, and to hold off on any searches. That way, if the purchase doesn’t progress, you shouldn’t be out of pocket – at least with regards to the law firm.

7. Are you approved by my mortgage lender?

Many mortgage lenders will only work with conveyancing solicitors that are on their approved panel, but most conveyancing referral services will ask this upfront so you don’t end up with a conveyancing solicitor that your lender rejects.

You can still choose to work with a firm that isn’t approved, but you’ll need to pay extra and the costs can pile up.

8. Where can I check feedback?

There is no better way to check a firm’s performance than by reading reviews. If your chosen firm is proud of its track record it’ll have no problem directing you to where you can find feedback from past clients.

9. When do I need to pay conveyancing fees?

It’s important to check when you’ll be expected to pay the conveyancing bill. It could be that you need to pay when you exchange, or when you complete. You may be asked to pay a deposit at the start, and you may need to settle the bill for disbursements as they come up. In short, this varies by firm so make sure you find out when payment is due.

10. What’s your procedure for disputes?

It’s always a good idea to prepare for the worst case scenario, so asking how the firm deals with disputes is very important. Aside from giving you a feel for their level of customer service, it’ll arm you with invaluable knowledge if you do need to raise an issue. If a firm doesn’t have a solid procedure, or if the conveyancing solicitor is unsure of what to do in this situation, it should raise a red flag.

Source: www.hoa.org.uk

While leasehold is a common form of tenure for flats, it is increasingly applied to new build houses as well. So whether you’re thinking of buying a house which is leasehold – rather than freehold – or have realised your house is leasehold now that you’ve moved in, we look at what you need to know before you go any further.

I own a leasehold house: what are my options?

First off, you should consider suing your conveyancing solicitor for professional negligence

This seems like a drastic first step, but if you weren’t alerted to the fact your house was leasehold then your solicitor or conveyancer was negligent in not making you aware. You’ll need to be up for a battle; after all they do this for a living. It is not enough to believe or feel that you were inadequately advised, it is all about how much proof you have.

Your first job is to get a copy of your file from the solicitor who advised you when you bought your house. You can do this yourself by simply writing to your solicitor or you could instruct a solicitor to do this for you. Be prepared to wait: your solicitor has to provide you with this report but there is no legal timeframe for them to do this by.

The most important document is something called your “Report on title”. This is the report on the pros and cons of you buying this property. This is the document that could give you the proof you need to sue your conveyancing solicitor. The most important bit of your file to look for is the part where it explains the ground rent ground in your lease and the implications it will have for you in the future.

You will also need to check all the documents in your file as well to see if any other documents your solicitor provided you in your report included advice on the ground rent of the lease, and:

• If there is no mention of ground rent or their implications you could have a very good chance of suing.
• If your file shows the solicitor simply states your ground rent is “£250 per annum” with no other advice you may still have a case to win.
• If it says “Ground rent is £250 and doubles every 10 years” but does not offer any other advice you may still win but a solicitor will try to assert they did advise you.
• If your file says “Ground rent is £250 doubling every 10 years and this could be bad” then your chances of success are reduced even further as the solicitor will insist they had properly advised you.

Second, consider buying the freehold of your home

Broadly speaking there are three different ground rent schedules for leasehold houses.

• Doubling ground rent every ten years. This is by far the worse one and is considered onerous.
• Doubling every 25 years. This is not as bad and is not considered onerous.
• Linked to RPI. This essentially means the ground rent you pay is linked to inflation and technically you pay the same amount each year forever more.

You need to keep in mind however that all these ground rent options are totally needless and exist for the sole purpose of creating an asset class for the ground rent investors. By buying your freehold you could free yourself from these unpredictable and unfair fees. Under the 1967 Leasehold Act you have a legal right to force your freeholder to sell you the freehold of your home.

To work out how much it should cost you need to calculate the total ground rent you owe your freeholder for the remainder of your lease, taking into account inflation and the capitalisation rate. We advise you get dedicated advice from experts in calculating a ballpark figure before you formally start the process.

But buyer beware: Avoid informal agreements with the freeholder

Once you know where you stand on likely cost of buying your freehold, you will want to contact the freeholder to get the process started. At this point your freeholder may offer you the opportunity to bypass the process of buying a freehold using a formal process with lawyers and may suggest an informal agreement. This almost always leads to a worst deal for you the leaseholder and should be avoided at all costs. Remember your freeholder has bought your freehold to make money.

Furthermore, buying your freehold ‘informally’ from your freeholder places you outside any legal protection you would have if you acted inside the 1967 Leasehold Act. Your freeholder can negotiate the very best deal for themselves on the freehold transfer and there is nothing you can do to remove anything from the contract you don’t like, it’s a take it or leave it deal.

Finally, buy your freehold as part of a group using your statutory legal right under the 1967 Act.

The very best thing you can do is to buy your freehold as part of a group with your neighbours acting at the same time. The bigger the group the more money you will save. There is an economy of scale when you act as a group but it will also give you formidable negotiating power against your freeholder when trying to agree a fair price.

Source: www.hoa.org.uk

It may seem like technical legal language, but there are few things more important about your home than whether it is freehold or leasehold. It makes the difference between owning your own home outright, and having a landlord.

 What are the different forms of home ownership?
There are two fundamentally different forms of legal ownership: freehold and leasehold. Although estate agents tend to gloss over it, the difference can be between a home that is worth buying and one that isn’t. Many people who don’t sort this out when they buy a home end up regretting it – getting it wrong can be hugely expensive.
What is freehold?
If you own the freehold, it means that you own the building and the land it stands on outright, in perpetuity. It is your name in the land registry as “freeholder”, owning the “title absolute”. Freehold is pretty much always the preferred option: you can’t really go wrong with it.
You won’t have to pay annual ground rent
You don’t have a freeholder either failing to maintain the building, or charging huge amounts for it
You have responsibility for maintaining the fabric of the building – the roof and the outside walls
Whole houses are normally sold freehold – there is no reason for a standalone house to be leasehold though there is an increasing trend for leasehold houses, particularly with new build homes, so check before you buy

What is leasehold?
Leasehold means that you just have a lease from the freeholder (sometimes called the landlord) to use the home for a number of years. The leases are usually long term – often 90 years or 120 years and as high as 999 years – but can be short, such as 40 years.
A leaseholder has a contract with the freeholder, which sets down the legal rights and responsibilities of either side
The freeholder will normally be responsible for maintaining the common parts of the building, such as the entrance hall and staircase, as well as the exterior walls and roof. However, other leaseholders might have claimed their “right to manage”, in which case it is their responsibility
Leaseholders will have to pay maintenance fees, annual service charges and their share of the buildings insurance
Leaseholders normally pay an annual “ground rent” to the freeholder
Leaseholders will have to obtain permission for any majors works done to the property
Leaseholders may face other restrictions, such as not owning pets or subletting
If leaseholders don’t fulfil the terms of the lease – for example, by not paying the fees – then the lease can become forfeit.

Disputes between leaseholders and freeholders

It is very common to have tension between freeholders and leaseholders.

• Fees are a major source of contention, with one in four (26%) leaseholders feeling their freeholder is over charging, but being able to do little about it. While the ground rent usually costs in the region of £100-250, even on ordinary flats the annual charges can amount to over £1000 a year
• Leaseholders often complain that freeholders don’t maintain the building to a sufficiently high standard, or keep common areas clean and tidy. One in four (23%) leaseholders complain of a lack of control over what major works are done and almost one in five (18%) have had difficulty getting necessary works done (2019 annual Homeowner Survey)
• Freeholders often complain that leaseholders breach the terms of their lease, for example by making too much noise or not getting permission for building works

The declining value of leaseholds

When the term of the leasehold goes down to zero years, then the property reverts to the freeholder. So, if you have a 40 year leasehold, you only have the right to use the property for 40 years before it goes back to the freeholder. A lease with a term of zero years is clearly worthless, and all other things being equal, the shorter the lease, the less it is worth. The value of long leases stays fairly stable, but the value of short leases can drop rapidly. For example, a flat with a lease of 60 years is worth more than 10 per cent less than if it had a lease of 99 years – you might think that a flat is worth £200,000, but actually it is worth less than £180,000, with the difference in value being owned by the freeholder.

Should I avoid buying a property on a short leasehold?

Leases of less than 90 years can start to be problematic for leaseholders, and should be approached warily. Certainly, any lease of less than 80 years can start to significantly affect the value of the house. If you have a short lease, the property can decline in value even if property prices in your area are generally rising. This means that fewer people will want to buy it when you resell; it also means that mortgage companies might be reluctant to lend on it.

Extending your lease

A series of Government acts have given leaseholders protection against short leases, by giving them the right to extend their lease or the right to buy the property – but this can be very expensive indeed. The law is slightly different depending on whether you have a house or flat:

Flat:

• You normally have the right to extend your lease by 90 years on top of your unexpired term
• If so you won’t have to pay any more ground rent and you can negotiate new terms for the lease, like who pays for works on the flat
• However, you only have the legal right to do this if you have held the lease on the property for 2 years and it was originally leased on a “long lease”, usually more than 21 years.
• You will have to pay a premium for extending the leasehold.
• Many people considering buying a short leasehold property (generally less than 80 years) insist that the leaseholder extends the lease before they buy it.
• After you tell your landlord that you qualify for the right to extend the lease they can accept your offer, negotiate, or reject your offer. If they do the latter you can challenge them in court

House:

• You might have the right to extend your lease by 50 years on your house
• If so you can renegotiate the terms of your lease, like who pays for works on the house
• However, you only have the legal right to do this if you have held the lease on the property for 2 years and it was originally leased on a “long lease”, usually more than 21 years
• Unlike flats, you don’t have to buy a lease extension for a house, but your ground rent is likely to go up
• You should get a professional to help you extend the lease. For example, if you live in a converted house the rules for extending a lease on a flat might apply instead
• After you tell your landlord that you qualify for the right to extend the lease they can accept your offer, negotiate, or reject your offer. If they do the latter you can challenge them in court

Buying the freehold on a leasehold property

You might also have the right to buy your house or flat outright, so that you own the freehold. This is called ‘enfranchisement’. While there are complicated legal procedures and legal costs involved this process of enfranchisement can be invaluable. Again, the law depends on whether you have a house or flat. Ensure you get professional advice and assistance.

What is commonhold? 

• • Commonhold is a variant of freehold, created by the Leasehold Reform Act of 2002, which overcomes some of the worst aspects of leaseholds.
  • Commonhold is where a multi-occupancy building is divided into a number of freehold units, so each individual flat owns its own freehold. The common parts (staircases and hallways etc) are owned and managed by a Commonhold Association, a company that is itself owned by the freeholders of the flats.
  • This means there is no superior freeholder, but rather the owners of the flats manage the common and external parts of the property jointly. This protects people both from greedy landlords, and from the problems of short leases.
  • But, as with any form of community ownership, problems and conflicts can arise between members of the Commonhold Association. Moreover, only about 15 to 20 commonholds have been completed in the UK.

Source: www.hoa.org.uk