The term “leasehold” can often prove scary and daunting to sellers. The thought of having to deal with all the leasehold aspects of a conveyancing transaction can sometimes appear to be more complicated than it really needs to be, when the truth of it is, a leasehold transaction need not delay your move by weeks upon weeks; providing you and your solicitor have prepared as much as possible in advance.
Read my brief overview of the use of a management pack in the leasehold sale process below:
What is a Management Pack and How is it Used in Leasehold Property Sales?
When selling a leasehold property, you will be required to provide a Leasehold Information Pack (sometimes referred to as a Management Pack). This information pack is provided by your landlord or their managing agent and provides your buyer with vital information regarding the day-to-day running of the estate/building and what costs are associated with the property.
For example, if your property is subject to ground rent or service charge payments, the information pack will provide copies of the accounts for the last 3 years which will allow your buyer to budget accordingly. It will also provide details of any upcoming or anticipated works which need to be carried out which the property owner will be expected to contribute towards.
Landlords almost always have the responsibility of insuring the building and so the pack will provide information on the insurance policy and how your buyer can apply to have their interest, or that of their mortgage company, noted on the insurance policy.
It will also provide general information such as if any past works have been carried out, any disputes that have arisen, whether there is a reserve fund for works and what administration fees the buyer will be charged when they apply to the landlord to have their details noted on their records.
Within the information pack will be a completed LPE1 form (Leasehold Property Enquiry Form). This is a standardised form which is designed to cover the main points which a buyer needs to be aware of when they purchase a leasehold property. The form is designed to limit, if not eradicate, the need for additional enquiries to be raised with the landlord during the conveyancing transaction.
Unfortunately, as with most services nowadays, the landlord will almost always charge a fee to produce this information pack. This fee is quite often the sticking point in a conveyancing transaction as sellers can sometimes be unaware that, not only is this information pack required in order to complete the transaction, but that a fee is payable for the same.
The burden of this fee does fall to the seller and usually ranges from approximately £100-£300 plus VAT, depending on the landlord/managing agent, the area and also the size of the information pack.
When you purchased the property, your seller would have also applied for and paid for this pack and so, as the next seller of the property, the duty now falls to you. An information pack usually takes up to 15 working days to be produced and so it is vital that it is ordered at the earliest opportunity to avoid any delays.
We strongly advise that when you place your property on the market or when you are delivered the exciting news that you have a buyer, that you contact your landlord or managing agent to enquire as to the cost of this pack and the timescale in which it will take for the pack to be provided.
It is always quicker to order the information pack and pay directly, as opposed to through your solicitor. This means that one direct payment is made and the production of the pack can be underway.
Once the pack has been completed, your buyer’s solicitor will inspect the same and hopefully not have to raise any further enquiries in respect of the landlord’s involvement.
If it transpires that additional enquiries are required, you will have the comfort of knowing that these enquiries have been raised at the earliest opportunity and every effort can be made to obtain satisfactory replies from your landlord/managing agent so that the sale can continue to proceed as quickly and efficiently as possible.
Read more: What’s the Difference Between Leasehold and Freehold Properties?
Howells Can Help with Your Leasehold Conveyancing
If you’re considering selling your leasehold property and would like the guidance of a trained and experienced leasehold team, our conveyancing solicitors will be happy to help.
We’re property law specialists and complete property purchases worth over £50m per month, so you can rest assured your sale will be in safe hands.
