Lease Creations

Can you help me with the creation of a new lease?

We have considerable experience of creating leases out of both freeholds and long leaseholds, particularly properties that have been converted into Flats where new individual leaseholds titles need to be created to enable the Flats to be sold or mortgaged as separate properties. This is a specialist area where we have developed the knowledge and expertise over the years. In comparison most conveyancers only encounter such scenarios occasionally, need thinking time as a consequence and have to remind themselves what steps to follow. The law is complex and there are pitfalls to avoid. We deal with such cases on a day to day basis and will guide you through the process.

I need help so what should I do?

Call us and ask to speak to our specialist teams that deal with these types of transactions whether you intend to sell or re-mortgage. An enquiry costs nothing. You could start by giving us a call on 0800 103 2600 or complete an enquiry form and we will call you back. 

We will be able to guide you through the entire process but here are some of the questions we get asked a lot:

• Why is a Lease necessary?

  A lease is a contract and provisions in a contract are mutually enforceable against future owners whereas that is not necessarily the case with freeholds. This is known as privity of contract and is fundamental to the principle. So, a lease is required to make the ownership of a Flat good and marketable and therefore acceptable to buyers and lenders.

  But note - leases have had bad publicity in recent years and Copyhold title may replace leases if it catches on. Watch this space.

• How long can the Lease be?

  Many years ago a new term of 99 years was the norm but granting a new 99 year lease would not be acceptable nowadays because of issues experienced in recent years with short leases. You could try 125 or 150 years but you would probably be asked why you are not granting 999 years if you own the freehold.

• What is ground rent?

  A ground rent is an annual fee payable to a landlord under a lease for “renting the ground”. Historically it was traditional to reserve a ground rent when creating a new lease but following issues with excessive and escalating rents legislation was introduced relatively recently and as a consequence new ground rents cannot now be created.

• What is a service charge?

  A service charge is a charge levied by freeholders to recover any costs they incur in carrying out general maintenance, repairs and insurance of the building. It also covers the cost of other services, such as heating, lifts, lighting and the cleaning of common areas. A service charge may also include the cost of management by the landlord or by a professional managing agent and may include contributions to a Reserve fund.

• What is a Reserve Fund?

  A Reserve fund is a sum of money collected from leaseholders as part of their service charge contribution to meet the cost of expenditure on the building in future years. It is often set up to cover the cost of major repairs like a new roof, for example.

• Plans

  You will need Land Registry compliant plans. We will give you guidance notes that you can pass to your plan provider.

• How do I deal with the future management and the freehold after the leases have been granted?

  There are various options that we will explain to you. Start by calling us on 0800 103 2600

• What will it cost?

  Every case is different as you can well imagine but once we know exactly what you wish to do we will give you the most accurate estimate of costs that we feel we can.

• How long will it take?

  Every case is different as you can well imagine but once we know exactly what you wish to do we will give you the most accurate estimate of timescale that we feel we can. We have standard templates that we start with and use to create bespoke documentation for you so we can act quickly. Please be aware that once the documentation is completed it has to be registered at the Land Registry and they have a significant backlog of cases involving skill. They will consider expediting an application if there is evidence of the delay obstructing a financial transaction. If you are contemporaneously taking out a new mortgage or selling then it may be possible to submit the registration once that financial transaction completes which will avoid delay waiting for a registration.

• Will Russell & Russell provide a written fee estimate for my lease creations?

  We always provide a written estimate at the outset of a transaction based on the information provided to us at that time, so that you know where you stand and to ensure that there's no misunderstanding between us at a later time. 

  In the case of residential property transactions, we are usually able to offer a fixed fee for our time. We will quote a fixed fee for the work normally undertaken in a standard case and will provide you with a list of additional fixed fees that we would charge if you require additional work to be undertaken. 

  We will always honour the fixed fee quoted unless the information relied upon by us at the time of the estimate was incorrect or it subsequently becomes apparent that there's an aspect of the transaction that will significantly affect the amount of time that has to be spent by us – in either case we will notify you of any such development before we proceed further. For a free quote and breakdown of related disbursements known at this time, please use our quote enquiry form.

  In addition to receiving instructions direct from clients, we also work alongside brokers, referrers and property agents who refer clients to us. If we have agreed to pay to them a referral fee for recommending us to act for you then we will disclose the amount to you and we will pay the amount involved to the referrer out of our fee.

• Does my location, or that of the property, matter?

  No, your location is irrelevant – we can act for you whether or not you are local to our offices. ID verification can be dealt with electronically and you can on-board (instruct us) by completing documents on our Portal. If face to face is needed we also have the facility to use Zoom and/or Teams video conferencing if you cannot get to one of our offices. 

  The location of the property you are dealing with is also irrelevant as the same principles apply to properties across all of England and Wales.

• Will I have a direct contact number and email for my conveyancer?

  Yes, we will let you know the name and direct contact details of the person who is primarily dealing with your case when you become our client. That person will have support and also a Supervisor. This work is often Solicitor led or supervised due to the required level of expertise.

• What happens if I need to speak to someone out of normal office hours or at a weekend?

  We operate an out of hours, seven days a week service so you can speak to us in the evening or at weekend if you need to. The number to call is 07884 067 920.

& we think you might also find these helpful...

Suffered an injury? New home?