When you put the property on the market you should check the lease and give details to the agent. They should ask for the length of the lease, how much the ground rent is and how much the service charges are. It is good to have this available up front so that if there are any problems they can be sorted out whilst the rest of the conveyancing process is taking place (see below on lease extensions).
If you have no mortgage you may wonder where the title deeds are, but they no longer exist as a copy of your title is available at the Land Registry.
If you do not have a copy of the lease you can obtain it from the Land Registry but it is a good idea to instruct a conveyancer at this stage so that they can obtain a copy if necessary and advise you if there are likely to be any problems with the lease. If there is less than 85 years left to run you should consider extending the lease, but be aware that the cost may be considerable.
You should instruct a conveyancer as soon as you put the property on the market so that they can be ready to go as soon as you get a buyer.
Your conveyancer can prepare a package of info so that they are ready to go immediately you get a buyer. They will need information on service charges, etc. so you will need to give them details of the freeholder or managing agent. Your conveyancer will write to them asking for all relevant information, usually by sending form LPE2. There is usually a charge for this which you will have to pay. You should telephone them to find out how much they charge so that you are ready to pay them when necessary. You may decide to get things under way now, it's up to you.
You will also be asked to complete a form asking for information about service charges, alterations, disputes, etc. It's a good idea to do this now as it has many questions on it. If you send it to your conveyancers now it will give them a chance to look through it and sort out any queries with you.
If the lease has less than 80 years to run it is now the usual procedure to obtain an extension at the seller’s cost. However the length of a lease which is acceptable varies considerably. Most lenders will accept a lease which has at least 25 or 30 years to run after the end of the mortgage term, which would normally be 50 or 55 years in total. It should therefore be possible to sell a flat with a lease with, say, 65 years left to run, but in practice most buyers will insist on a lease extension as they do not wish to be buying a property which could be difficult to sell in a few years’ time.
The cost of a lease extension varies considerably from a few thousand pounds, but can easily run to £10,000 or £20,000 or more depending upon the value of the property and the length of the existing lease. Only a qualified surveyor can obtain an accurate figure but even then this will vary widely between surveyors as it is more of an art than a science.
The first course of action is to approach the freeholder or their managing agents to ascertain the cost for a lease extension. If the leaseholder considers that this is too much then legislation (the Leasehold Reform, Housing & Urban Development Act 1993) can be used to force the freeholder to extend the lease for an agreed figure, providing the seller has lived at he property for at least two years. However, this would involve the leaseholder paying costs for solicitors, and surveyors. These costs can immediately run into four figures so it may not be practical to use the legislation unless a large sum of money is involved. Furthermore, the procedure is fairly protracted and can take many months.
In this situation you must take legal advice to weigh up the alternative. An extension obtained using the legislation will be on the same terms as the existing lease but for an additional 90 years with no ground rent. A lease extension by negotiation can be on any terms and may involve a considerable increase in ground rent. This may be the best alternative if time is important as it will usually be quicker. If a sale is taking place this may be the best route, as long as your buyer and his or her lender are happy.