Buying a house with a swimming pool

Many of us dream about having our own pool, especially as summer approaches. What better way to beat a heatwave? And, on a more practical note, swimming is great exercise, suitable for all ages and fitness levels. So, if you are searching for your next home, a house with a pool may be high on your wish list.

‘With rising temperatures and longer summers, it is easy to see the appeal of a house with a swimming pool,’ agrees Philip Walker, Head of the  conveyancing team.  ‘However, this amenity can raise issues, both practical and legal. So, it is important to do your homework first.’  Here he offers some advice before taking the plunge.

Ask yourself how often you will use the pool

In the heat of mid-summer, the attraction of a pool is obvious, especially if it comes with an outside entertainment area. However, think about how often you would use those facilities. Be realistic. Consider the location, the heating system (if any), whether the pool is covered, and how hardy you are.  Bear in mind, it may take many weeks of higher ambient temperatures for the water in an outdoor pool to heat up.

If you are determined to swim all year round, you may need to consider incorporating a pool room, which will entail additional expense and may require planning permission. Discuss your plans with your surveyor, they can advise on the feasibility. Obtain an estimate for the work from a reputable builder and talk to your solicitor as well; they can give guidance about the necessary consents and whether any title restrictions would prevent you building there.

Understand the cost of owning a swimming pool

As well as the costs of any improvements, you will need to consider ongoing maintenance costs. These will depend upon the pool’s age, condition, and construction. You should budget for any repairs, parts, servicing, water, and the chemicals necessary to keep the pool clean. Checkatrade estimates the average annual maintenance cost for an outdoor pool as between £500 and £1,020. In addition, you should factor in the cost of electricity if the pool is heated, and regular electrical inspections.

To gain a better idea of the likely cost, ask the sellers about how much they have spent. Your solicitor can also ask them for details of major expenditure, and service records, together with confirmation they are not aware of any lack of repair. Having their written replies to pre-contract enquiries should ensure you have the full picture. While there is no guarantee there will be no issues in the future, this can give you confidence you are not buying into a pool with a problem.

Consider the pool’s condition and your longer-term plans

On average, an in-ground pool should last between 20 and 30 years. However, this will depend upon its construction and past maintenance. It is a good idea to take specialist advice, which may mean commissioning an additional report.

Generally, your surveyor will inspect the pool and consider any impact, such as subsidence, on the main property. However, they will not usually comment on the condition of the pool or any associated equipment. For this, you would need a specialist pool survey. This should reveal any major issues with the pool and indicate the likely cost of repair. If significant, you may ask the seller to carry out the work before you buy, or you could seek a reduction of the purchase price.

You should also consider what to do once the pool is no longer viable, particularly if it is already quite old. The cost of replacing it, or even filling it in safely, could be substantial. This is usually a professional job, especially if you intend to build over the site later. So, it is important to take specialist advice before you buy.

Check the pool complies with planning and building regulations

Unless the property is in a special area, such as a conservation area, an outdoor pool will not generally require planning permission. Any associated buildings may do, such as a plant room. Your solicitor will check all the necessary consents are in place. This is to ensure there is no risk of the local authority taking enforcement action. In a worst-case scenario, they could require you to remove the pool and any associated building and reinstate the garden back to its original condition.

Where works have recently been carried out, your solicitor will also ask about any guarantees or warranties. Ensuring the seller transfers their benefit to you means you should have the same rights against the contractor as they had. This can give you additional peace of mind where the pool is relatively new and still in its warranty period.

Ensure any legal issues are thoroughly investigated

Your solicitor will ask the seller about other issues that could affect your use of the property. It is possible, for example, that their use of the pool has given rise to complaints from neighbours. Noise from people using the pool is unlikely to amount to a nuisance that could give rise to legal action. However, a history of disputes could influence your decision to buy or how you intend to use the property in the future.

Occasionally, the seller’s replies to your solicitor’s enquiries may reveal other issues that need investigating. For example, the pool may have caused physical damage to a neighbouring property through subsidence, leakage, or the deliberate discharge of wastewater close to the boundary. In this case, your solicitor should check any issues are historic or ensure the seller settles them before completion. Otherwise, as owner, you could be liable to make good any damage and to compensate your neighbour for their loss.

Consider the impact when you come to sell

It may seem premature to think about selling up, but it is a good idea to consider the impact of a pool on your home’s future marketability before you buy. Some buyers, particularly in the country house and luxury market, expect a property to have a pool. However, other buyers may be put off by the cost of its upkeep or concerns about safety particularly if they have small children.

An independent estate agent, or your surveyor, can help you understand the potential impact. There are also simple things you can do to allay concern; keep your pool well maintained, keep any warranties or service records, and incorporate safety features, such as a pool alarm or fencing. As well as making your home more appealing to future buyers, this will ensure you get the most of your pool during your ownership.

How we can help

Whether you are buying a house with a swimming pool, plan to add one to your new home, or just want a conveyancer who truly understands your individual needs, we can help. Our conveyancers have extensive experience in all types of transactions.

For further information or an informal discussion, please contact Philip Walker in the conveyancing team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

 

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Selling a leasehold property where there is a problem or dispute

If you are selling a leasehold property, as part of the standard conveyancing process, your buyers will expect you to provide certain information about your property. There are set forms for this, including one which relates specifically to leases that asks if you are aware of any problems regarding the service charge or any complaints about your landlord, the management company, or any neighbour.

Unfortunately, occasionally disputes occur and usually these can be resolved over time. But what if you are keen to move, can you still put your home on the market and hope to find a buyer at the right price?

It is important to be realistic in your expectations if there is a problem with a leasehold property,’ cautions Philip Walker, Head of the conveyancing team.  ‘Buyers will naturally be wary of buying into an ongoing dispute, so they will need reassurance and any sale will require careful handling.’

Here he answers some of your questions.

How much must I tell a buyer?

You might have heard the expression ‘caveat emptor’, meaning the buyer needs to beware, but if you withhold information that could influence your buyer’s decision, you could be liable for misrepresentation.

Your buyer could reject the sale contract and require you to compensate them for any loss. So, if you are in any type of dispute with your freeholder, or management company, tell your solicitor who can advise you about what you must disclose and how best to deal with it.

When asked if you know of any problems, in theory you could refuse to answer these questions. However, a buyer is likely to find this suspicious and it could jeopardise your transaction. Sometimes sellers are tempted to tell a half-truth. This too can easily backfire, undermining the buyer’s confidence when they discover the full story.

If there is a problem, it is often better to be open and to tell the other party what you are doing to fix it.

Do I need to resolve any outstanding issues before selling?

Most buyers will view a historic dispute more favourably than an ongoing one. So, ideally, you should resolve any dispute before putting your property on the market. Your solicitor can advise whether this is possible in your desired timescale and, if so, how best to achieve it. If necessary, we can introduce you to a colleague who specialises in dispute resolution.

Sometimes, it may not be possible to resolve an issue before you need to sell. For example, you may be trying to exercise your statutory right to extend your lease, but your landlord is slow in responding. Showing you have complied with all the legal requirements and that your buyer will be able to continue your application to extend the lease should help alleviate their concerns. Alternatively, you could agree that the buyer retains part of the purchase price pending the successful outcome of the application to extend the lease.

There are no one-size-fits-all solutions. So, it is important to have a solicitor on board who is experienced in complex property transactions and who can give you their close personal attention.

Should I withhold payments to my landlord?

The level of service charge, and non-provision of services, are some of the most common complaints by leaseholders. If you are not happy with these, it is easy to feel tempted to withhold some of your service charge payments. There are some limited exceptions, but generally you should ensure your service charge and ground rent payments are up to date. Failure to do so is likely to put you in breach of your lease terms.

Any buyer will want to know that there are no bills outstanding. Not only could this affect their security, but they will also want to be confident the landlord will not look to them to make up any shortfall.

Paying your bills up to date does not prevent you from challenging the reasonableness of the service charge separately, provided you follow the correct procedure.

There may be some circumstances in which you could lawfully withhold payment. For example, if your landlord has failed to carry out repairs they are obliged to do under your lease, and you have spent money in effecting those repairs yourself. Before doing so, however, ask your solicitor who will check that your lease does not exclude this right and discuss with you how this could impact any sale.

Do I need my landlord’s agreement before I market the property?

The law provides leaseholders with some protection against unreasonable landlords in certain situations. For example, where your lease contains a restriction against alterations or transferring your property without your landlord’s consent, that consent cannot be unreasonably withheld or delayed. If your landlord unreasonably withholds or delays consent, then it is possible to apply to court for a declaration to this effect. Your landlord may then be deemed to have consented. Sometimes, a solicitor’s letter reminding them of this possibility is enough to have the desired effect.

Unfortunately, though, the law in this area is complicated, with different pieces of legislation applying in different cases. Talking things through with your solicitor will help you understand your options and the potential impact on any sale.

Do I need to get retrospective consent to alterations?

If your lease contains a restriction on alterations, and you have carried out work on the property, your buyer will want to see evidence of compliance. If the work was in breach of a restriction, the landlord could require the new owner to remove the work or to pay damages. In an extreme case, they could even exercise their right to enter your property and bring your lease to an end.

If you did not obtain your landlord’s consent when you should have done, you may need to apply for it retrospectively or take out insurance against the risk of enforcement action.

If, however, there is an absolute bar on alterations, the position is more complex. As a result of a recent case, Duval v 11-13 Randolph Crescent Ltd, some landlords may be reluctant to agree to vary a lease, for example, to permit alterations that would otherwise be a breach of the lease terms. There are some possible solutions to this impasse, for example, applying to the tribunal to vary the lease terms.

Depending on the facts, the pragmatic approach may be to remove the works yourself or to make it clear to any buyer that the price reflects this risk.

How we can help

Ideally, you should contact your solicitor as soon as you think of selling if you are aware of an issue that might be problematic.

We can advise you about the implications of the issue on the proposed sale, support you through the negotiations or by obtaining relevant insurance.

For further information, please contact Philip Walker in the conveyancing team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Budget 2024 and the abolition of multiple dwelling relief

The Government’s 2024 Spring Budget saw significant changes to the way property is taxed, including the imminent abolition of multiple dwelling relief. This will primarily affect investors looking to buy multiple properties at the same time, however, it could also affect you if you are buying a property that comprises more than one unit, such as a house with a distinct annex.

If you are purchasing a property with a separate granny annex and multiple dwelling relief applies to your purchase, it can save you thousands of pounds in stamp duty,’ explains Philip Walker Head of the conveyancing team.  ‘However, this relief will very shortly be abolished, so if you think an intended purchase may qualify, then speak to your solicitor as soon as possible.’

In this article, Philip answers some of your questions about multiple dwelling relief and the recent changes.

What is multiple dwelling relief?

The amount of stamp duty you pay will usually depend on the purchase price of the property. If you are buying more than one property in a single transaction, or what HMRC considers to be linked transactions, then stamp duty will usually be calculated on their combined value. So, for example, if you are buying two flats in a block costing £350,000 and £300,000 respectively, and assuming you already own property, you will have to pay £39,500 in stamp duty. This is based on the total combined purchase price of £650,000. The first £250,000 is taxed at three per cent (£7,500), the remaining £400,000 at eight per cent (£32,000).

In contrast, where multiple dwelling relief is available, you will only pay £27,000 in stamp duty, a saving of £12,500. This is because this relief allows you to average the cost of the properties. In this way, each ‘nominal’ property valued at £325,000 (£650,000 divided by two, the number of properties) can benefit from the lower rate bands of stamp duty. So, in this example, you will pay stamp duty at three per cent on the first £250,000 of the averaged property price multiplied by the number of properties (£7,500 x 2 = £15,000), and at eight per cent on the remaining £75,000 (£6,000 x 2 = £12,000).

Who benefits from multiple dwelling relief?

Multiple dwelling relief can apply wherever you buy two or more dwellings in the same transaction. For example, an investor buying several new-build apartments to add to their portfolio can claim the relief, as they can if buying ‘off plan’ (although special rules then apply).

The key requirement is that all the properties should be suitable for use as separate dwellings. This means a house with a separate annex could qualify if both are sufficiently independent of each other and individually suitable for a person to occupy as their home. However, this can be a very grey area with HMRC sometimes challenging claims for multiple dwelling relief in the courts. So, it is imperative to get expert advice before making a claim.

How has the 2024 budget changed things?

In his recent budget, the Chancellor of the Exchequer abolished multiple dwelling relief.

Transitional provisions mean you may still be able to claim the relief in two situations:

  • The first is where you exchanged contracts on or before 6 March 2024 (provided the terms of that contract have not been varied and it meets other conditions). In this case, you can claim multiple dwelling relief regardless of the date of completion.
  • The second is where you have exchanged, and ‘substantially performed’ a contract before 1 June 2024. Although ‘substantially performed’ has a special meaning for tax purposes, this will usually mean completion of your purchase.

Can I still claim multiple dwelling relief?

If you exchanged contracts on or before 6 March 2024, you could still claim multiple dwelling relief. In some cases, you may even claim reimbursement from HMRC if you were entitled to the relief but did not claim it when you completed. There is a twelve-month deadline for such applications. So, if you think this could apply to you, speak to your solicitor without delay.

In all other cases, you will only be able to claim multiple dwelling relief if you complete your purchase before 1 June 2024. If you are in the process of buying multiple dwellings, or plan to do so imminently, then completing before that date could save you money. The timetable is tight, so this is something you should discuss with your solicitor at the earliest opportunity.

While it makes sense to benefit from multiple dwelling relief if possible, you should avoid rushing into a commitment just to beat the deadline. It is more important to ensure the transaction as a whole works for you, and that there are no other legal issues which could cause you problems in the future.

How we can help you

Our team of residential property lawyers have experience in all aspects of conveyancing, including property tax. Being proactive, where multiple dwelling relief applies, we will progress your purchase to give you the best chance of making a successful claim. However, we will never lose sight of the bigger picture.

We can also advise you if there are other ways of reducing the amount of stamp duty payable. For example, other reliefs may apply if you are buying six or more properties in a single transaction, or your purchase includes a mixture of residential and commercial use.

For further information, please contact Philip in the conveyancing team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

The information you must provide when selling your home

When selling your home, you may recall the expression ‘buyer beware’. But what does this mean, and is it still relevant today?

Historically, the buyers in a conveyancing transaction have been responsible for satisfying themselves on a property’s suitability,’ explains Philip Walker head of the conveyancing team. ‘Nowadays though, the situation is more complex. There is more legal protection in place for buyers, who also now expect greater transparency.’

If you are selling a property, it is important to provide the correct information, and to get the right advice about any problems. Here Philip answers some frequently asked questions.

What information must I give to potential buyers?

Firstly, you must disclose any latent title defects you are aware of. A ‘latent’ defect is one which the buyer could not reasonably discover from inspecting the property. For example, a right of drainage or a restriction affecting the use of your home.

Secondly, the Consumer Protection from Unfair Trading Regulations 2008 places anyone acting as a business under certain duties which include not withholding information which the buyer may need to make an informed decision. While you may not be a business, the regulations apply to your estate agent and solicitor including to statements they make on your behalf.

Discuss any issues with your estate agent and solicitor early on. This will enable them to give you the best advice and will help your transaction to progress smoothly.

What information should I disclose when selling my home?

While the doctrine of buyer beware remains relevant, a rigid reliance on it may not help your transaction. Most buyers will expect you to provide information about your home, and replying to their solicitor’s enquiries is an established part of the conveyancing process.

There is a standard form for this (the TA6) which your solicitor will ask you to complete, covering topics such as boundaries, insurance and whether you have had any disputes with neighbours.

It is not a legal requirement to complete the form, or to answer all the questions. But, refusing to do so may raise suspicions and could delay or even jeopardise your sale.

What if there is something that may put off my buyers?

It is important to discuss any concerns with your solicitor early on. Do not be tempted to lie or tell a half-truth. If you do, and the buyers rely on that statement, you may be liable for misrepresentation. In a worst-case scenario, your buyers could reject the contract and you may have to pay them compensation. Misrepresentations can be oral as well as written statements; or even something you do, like removing a fixture, such as a paving slab, which was present when your buyer viewed the property.

A cautionary tale

Omitting or tailoring your answers to give a more positive outlook can backfire. For example, in Morrell v Stewart, the sellers had problems with foul water drainage. The Environment Agency became involved. Although the sellers told the Environment Agency they had solved the issue, their remedial works were insufficient.

In their precontract enquiries, the buyers’ solicitor asked the sellers if they had had any negotiations with any authority which affected the property. The sellers said they had not. The buyers’ solicitor also asked them if they had carried out any recent plumbing work or tested the drainage, to which they replied there had been no re-plumbing work or testing during their ownership.

After completion, the buyers discovered effluent overflowing and sued the sellers, seeking compensation.

In their defence, the sellers said they believed they had resolved the drainage issue and that the question about re-plumbing related only to internal work. However, the judge did not accept their argument and awarded £33,000 in compensation to the buyers.

The judge remarked that even if the sellers believed the drainage issue resolved, they should have disclosed it and the remedial works. The buyers could then have made an informed decision whether to proceed.

Unfortunately, the works had fallen short of the required standard. However, if the sellers had engaged the right professionals, who could have provided a warranty for the satisfactory completion of the works, and disclosed this to their buyers, the outcome may have been more positive.

How can my solicitor help me?

If there is something you think may concern potential buyers, talk to your solicitor. They can advise you on the best approach, one which will not expose you to unnecessary risk while hopefully reassuring your buyers.

Fortunately, most property related issues are not as messy as the one in Morrell v Stewart. Often there will be a relatively straightforward solution. For example, if there is a technical breach of planning or building regulations, it is usually possible to buy an insurance policy to satisfy any concerns.

Is there anything else I should know?

Yes, you should start organising your property information as soon as possible. If you want to sell your home, talk to us. We can explain what is needed to complete form TA6 and discuss any concerns you may have.

In England and Wales, a sale takes on average 150 days to complete, and the Government believes that providing more information upfront will speed up conveyancing and reduce the number of transactions falling through. There are now digital platforms which facilitate the collection and sharing of information in a single place, making the process quicker and more transparent. Addressing any issues at the outset can boost the chances of your sale completing smoothly and quickly.

How we can help

For further information, please contact Philip Walker in the residential  conveyancing team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Seven reasons to register your property

Nearly 10 per cent of land in England and Wales has never been registered at HM Land Registry, usually because the owner bought the property a long time ago or inherited it.

‘If your property is not registered, this should have little or no impact on you on a day-to-day basis. However, it could put you at a disadvantage in the future, for example if you decide to sell or remortgage, and it also increases the risk of fraud or adverse possession,’ explains  Philip Walker, Head of the conveyancing team.

If you have the papers from your original acquisition, these should indicate whether the title to your property is registered. ‘Title’ is the term we use to describe ownership of a property, and the rights which attach to it. If you purchased your property after 1990, then it should be registered, but it is possible the correct formalities were not carried out and so it is always a good idea to check.

Our solicitor can do this for you, or you can ask HM Land Registry to search the index map which will reveal if it is registered.

Philip highlights several reasons why you should consider applying for the registration of your property if it has never been registered with HM Land Registry.

Easier to prove ownership

Any prospective buyer of your property can quickly and easily check proof of ownership with an official copy of the register, which their solicitor can obtain from HM Land Registry which has examined the title deeds and verified the owner.

In contrast, with a property that has not been registered, you must prove your ownership to the seller. This will usually involve showing a chain of title deeds. As well as being more complicated, this is also inherently risky. Paper deeds can easily become lost or, worse, destroyed. Sometimes a bank or solicitor will store your deeds for you, which is better than keeping them at home but problems may still arise. For example, following a fire at a national storage facility, one building society lost over 100,000 deeds in a single night.

If you lose your original deeds, you may be able to recreate evidence of your title. However, this is not easy and may not always satisfy a prospective buyer.

With a registered title, you no longer need worry about storage or the possibility of losing your deeds. Proof of ownership is only ever a click away.


Investigating title is simpler and quicker

As ownership of a registered property is clearly set out in HM Land Registry’s record, it is simpler and quicker to check the plan showing the property’s physical extent. A separate part of the register also details most of the relevant interests affecting it which would be of interest to a purchaser.

For a property that has not been registered, a solicitor will need to trace ownership through a chain of conveyances. They will also have to check those deeds for interests, such as charges or restrictions, which could affect the property. This can be complicated, particularly if your property has not changed hands for many years or once formed part of a large estate.

A state-backed guarantee of title

Registered properties benefit from a class of title. The best, and most common, is ‘title absolute’ which shows that HM Land Registry considers the title is generally acceptable to buyers. Registration also carries a state-guarantee, which means that if there is an error in the register, HM Land Registry will compensate someone who suffers loss as a result. This gives reassurance to a prospective buyer, who can accept the title with impunity and rely on a well-defined process for making a claim if required.

Conveyancing is quicker and more straightforward

In theory, if your title deeds are in order, conveyancing should not be problematical. However, in practice, problems occur more frequently with unregistered properties for several reasons. For example, a deed may be missing, or it may be hard to prove the release of a mortgage.

Registration reduces these risks, as the register shows clearly who the owner is, and which rights or charges affect the property. This makes conveyancing simpler and quicker.

If you plan to sell your property at some point in the future, applying for registration now could make good sense.

Third parties may prefer registered land

If your property is registered, you may find it easier to remortgage or to enter into other agreements, for example the so-called ‘rent a roof’ scheme for solar panels.  Companies will find it easier to check your title, to confirm they are dealing with the right person, and to get a quick overview of your property.

In contrast, having to obtain your title deeds and then prove your title is likely to be a longer, more complicated process.

Large organisations often prepare their standard documents and procedures for registered land. So, an unregistered title could make it harder to benefit from certain arrangements and offers.

Protection against adverse possession

Adverse possession is where a person with no documentary title to land can displace the legal owner by virtue of their occupation. The rules surrounding adverse possession are complex and, most significantly, the law treats adverse possession of registered and unregistered land very differently. Generally, it is much harder for a squatter to displace the title of an owner of registered land.

In either case, a squatter must show a sufficient period of adverse possession. However, with a registered property, HM Land Registry will notify the registered owner, which gives them the opportunity to object and take steps to evict them promptly.

Many adverse claims are for small strips of neglected garden or waste land. However, one of the most famous cases involved 25 hectares of farmland, so the commercial value can be significant.

Protection against fraud

You can apply for the entry of a restriction against your registered title at HM Land Registry, which can be especially useful if your property is empty or you do not have day-to-day control over it.

For example, a restriction can require satisfaction of an extra condition before the Land Registry will record a change of ownership. Typically, this will require a conveyancer to certify they are satisfied you are the person executing the transfer deed.

With a registered property, you can also sign up for an alert if someone applies to change the register, for example if they try to use your property fraudulently for a mortgage.

There is no equivalent protection for unregistered land, where possession of the deeds can be taken as proof of ownership.

How we can help

Our solicitors have extensive experience of dealing with both registered and unregistered land.  If your property is unregistered, we can apply to HM Land Registry to register it on your behalf. Then you will have all the advantages of being a registered owner, which will also stand you in good stead if you do come to sell.

For further information, please contact Philip Walker in the conveyancing team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Selling a property quickly to get out of a mortgage

Rising interest rates have dominated the headlines recently, with the Bank of England estimating a million households could see their monthly mortgage repayments increase by £500 over the next three years. If you are affected, you may even be thinking about giving up your property so you will no longer have the burden of a mortgage.

‘Becoming mortgage-free would certainly help ease any immediate financial pressures,’ agrees Philip Walker, Head of the Conveyancing team. ‘Unfortunately, that process is rarely easy or straightforward and, whether you are already at risk of losing your home or just want to reduce your outgoings, it is important to get the right advice first.’

Your liability may not end with your ownership

Some borrowers believe they can get out of a mortgage by simply handing the keys back to their lender. However, this is a misunderstanding. You can still be liable for the debt even after you no longer have any interest in the property.

To understand this, it can help to think of your mortgage in two parts. First, there is the money your lender advances you to buy your home. The mortgage, or loan, agreement deals with this. This is a type of contract, setting out your obligations as borrower, such as the payments you must make. In addition, your lender will take a charge over your home as security for their advance, and any other sums which you may owe them, such as interest.

Ultimately, the charge gives the lender the right to sell your home if you default under the loan agreement. This process is often loosely referred to as ‘repossession’. When the lender sells your home, their charge will usually be released. However, your liability under the loan agreement will continue until all the money you owe is repaid. Property prices have been falling, and if the net sale proceeds are less than you owe the lender then they can pursue you for the shortfall.

What happens when a lender sells my property?

If your lender repossesses your property, they should sell it for the best price reasonably obtainable. Often, this will be through an estate agent, but they may choose to auction the property instead. However, their duty is only to take reasonable care. This means they may agree a price lower than you think the property is worth. In general, an unoccupied property in what is known as a ‘distress sale’ is likely to achieve less than a sale by an owner-occupier.

Your lender must send you the net proceeds of sale, if there is any surplus after repayment of your mortgage and their expenses. If there is a shortfall, you will need to discuss with them how you will repay it.

Selling your property before your lender repossesses

It is usually better to sell your home yourself, and repay your mortgage directly, than to wait for your lender to repossess it. Selling voluntarily gives you more control over the process. You should know at the outset how much money you will have after paying off your mortgage. This should also limit the impact on your credit rating, which could affect your future ability to get a loan. Everybody’s circumstances are different, so it is important to take independent advice.

If the sale proceeds will be insufficient to repay your mortgage, you will need your lender’s agreement to the sale. Most lenders will look upon requests sympathetically if you involve them early on. If your lender unreasonably refuses your request, you may be able to apply to court for an order for sale.

Review your finances carefully

If you are struggling to pay your mortgage it is important to get the right advice. Lenders will want to avoid repossession where possible, so contact yours early on. They may be able to offer ways to help, such as switching to an interest-only mortgage or extending your term. You can also find sources of free debt advice at https://www.gov.uk/debt-advice.

Alternatively, you may just want to reduce the cost of borrowing by downsizing or selling a second home or investment property. However, you should still ensure your figures stack up and take advice from the relevant experts. To start with, you will need a realistic estimate of the price your property is likely to sell for, together with the sum required to clear your outstanding mortgage and all the associated sale costs. Your lender should be able to give you a redemption statement. This will tell you how much you need to pay off your mortgage, while our solicitors can give you an indication of the sale costs. If you are planning to save money by downsizing or moving to a cheaper area, you will also need to work out your acquisition costs.

Only when you have this information can you assess whether your plans are viable.

Selling to a cash home buyer

You may have seen advertisements from companies offering to buy properties for cash. The offer of ready money can be very tempting. However, these companies are unregulated, and it is important to ensure any you deal with are reputable. Even if they are genuine, the price they offer is likely to be below market value.

If you are considering such an offer, speak to our solicitors first. We know the local market and can check out the paperwork to ensure the offer is genuine and that there are no hidden pitfalls.

Making sure your property is ready to sell quickly

A quick sale is especially important if you are under pressure to reduce your financial commitments, as each day you will be paying interest on your outstanding mortgage.

Fortunately, there are several things you can do to progress your sale. Making sure your property is presentable and competitively priced should help attract buyers. Before accepting an offer, consider how quickly the buyer can complete. You may prefer a cash buyer for this reason, but your estate agent should always check their credentials by asking for proof of funding.

Speak to our solicitors as soon as possible, so that they can review your position and alert you to any concerns before problems arise. They will help ensure your property is ready for sale legally. This can involve remedying any defects in advance, for example, by taking out a title insurance policy for a breach of planning permission or another restriction.

As part of the conveyancing process, your buyer will also require a lot of information about your property. So, it is a good idea to collate as much of this as possible in advance. Your solicitor can tell you what is required and give you an idea of the likely timescales.

How we can help you

Being under financial pressure is tough enough without the additional stress of having to sell your home. While we may not be able to solve all your problems, our experienced conveyancers understand the need to move quickly and to ensure your sale proceeds smoothly. The process may, at times, feel emotionally draining, but we will always make it our priority to keep you informed and to address your concerns.

For further information, please contact Philip in the Conveyancing team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Buying a property with a roof terrace or balcony

A home with outside space appeals to many of us, but it may be hard to find somewhere affordable with a garden and, even then, you may not want the responsibility of its upkeep. A balcony or roof terrace could give you that much coveted al fresco space without the maintenance headache.

‘It is certainly an attractive proposition,’ agrees Philip Walker, Head of Conveyancing at Kidd & Spoor.  ‘As a result, many developers are now incorporating balconies and roof terraces into their new builds, or owners are adding their own. However, there can be legal pitfalls for the unwary.’

Here he looks at some of the things to consider.

Is the balcony or roof terrace included?

If the property has a roof terrace or balcony, it may seem natural to assume it is included in the sale. After all, it physically appears to be part of the property; the agent may even have used it as a selling point.

Sadly though, things are not always that straightforward. Sometimes, the seller’s title does not extend to a particular feature. Perhaps the documentation was not correct in the first place, or maybe the seller or their predecessor added the feature without properly checking they owned the space.

This can be a particular issue with flats, where the title relates to a space carved out of a larger building. For example, someone may own the top floor flat, but not the roof. Indeed, the building’s owner will often retain ownership of the roof, or it will form part of the common areas. If the title does not include the balcony or terrace, or give adequate rights over it, you may have problems getting a mortgage or selling your home in the future. In a worst-case scenario, you may even have to restore the apartment to its original condition.

It is important to mention any feature like this to your conveyancer early on, and they can quickly check the seller’s title at the Land Registry.

Does the property have a flying freehold?

If part of the house extends over land or property the seller does not own, it may be a ‘flying freehold’. This could be a balcony jutting out over a neighbour’s drive or a roof terrace over another apartment, (or a cellar in an older house which runs under another property).

Flying freeholds have a bad press, with some banks refusing to lend on them. This is because it can be difficult to establish a right of physical support, or the necessary rights of repair. However, this is not always so, as many flying freeholds are long established and do not cause any problems in practice.

Our conveyancing solicitor will be able to explain the potential impact, and help you assess any risk. If the area affected is small, then even if it is not correctly documented, your lender may still be prepared to accept it.

Who is responsible for the balcony or roof terrace?

Sometimes, it is not ideal to own a feature outright. For example, in an apartment block with a balcony running along its length where each flat has the benefit of an individual section. In this scenario, you would usually have a lease of the inner shell of your flat, including the surface of the balcony.

The building owner, or management company, would then be responsible for the structure, the apartment owners sharing the cost of any repairs through the service charge. In contrast, if your lease includes all the balcony, you may be liable for all the cost of repair. This could be so even if you do not have the necessary rights over other properties to carry out those repairs.

When buying an apartment, your solicitor should also check what rights the landlord retains. For example, if you share a roof terrace with other residents, the landlord may have the right to take this space back if they want to redevelop the building. Occasionally, the landlord may have this right even if you own or have exclusive use of that space.

Are all the necessary consents in place?

Any addition to a property should comply with planning and building regulations, otherwise you risk the local authority requiring its removal. If the feature is well established, you may take a view on the likelihood of enforcement action or insure against this risk. In some cases, you may be able to apply for a certificate of lawfulness which would regularise the situation.

Your solicitor can advise you of your options. Bear in mind, non-compliance may indicate issues which are not purely legal. For example, the lack of building regulations consent for a roof terrace may indicate wider issues; you may want to ask your surveyor to confirm it is safe and can bear the additional weight.

Your solicitor should also check the seller’s title to see if the work required any other consents. For example, there may be a restriction in favour of a neighbouring property, or a leasehold property may require the landlord’s consent. Failure to comply with these restrictions could result in legal action or the landlord trying to terminate the lease.

How we can help

Our solicitors will identify any potential problems and can propose constructive solutions. For example, if the roof terrace or balcony is not included in the seller’s title when it should be, this could be:

  • asking the Land Registry to remap the extent if there is an error in the register;
  • taking out title insurance cover; or
  • getting a deed of variation, in which the landlord corrects the omission of the balcony or terrace from the original lease.

The most appropriate approach will depend upon the property, and the transaction, including your desired timescale. For example, a deed of variation may be the best technical solution but could take several months and require the agreement of third parties. So, title insurance may be an acceptable compromise. This is the type of issue we would always explore with you, appreciating both your individual circumstances and the need to sometimes be pragmatic.

For further information, please contact Philip in the conveyancing team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Cracks and subsidence in a property, a cause for concern?

If you are a homeowner, or looking to buy, the very word subsidence may fill you with dread or visions of sinkholes which hit the newspaper headlines. According to the British Insurance Brokers Association, subsidence is a common issue affecting an estimated 20 per cent of homes in some way. But what exactly is it, and should you be worried?

‘It is natural to be concerned if someone mentions subsidence, but most instances are at the less serious end of the spectrum,’ says Philip Walker, Head of the conveyancing team with Kidd & Spoor Solicitors . ‘It is important to keep things in perspective, and your professional advisors can help you assess and manage any risks effectively.’

Here Philip answers some of your questions.

What is the difference between subsidence and settlement?

Subsidence is when a building’s foundations move because the underlying ground conditions change. Typically, as the soil sinks this damages the property’s structural integrity and cracks appear as walls shift and floors drop.

Not all cracks in a building will be down to subsidence though. Some movement over time is normal, especially when a building is new. This is called ‘settlement’ and happens as the ground adjusts to a building. The underlying soil does not sink but becomes compressed under the additional weight. Settlement is not usually a problem because it does not affect the property’s integrity.

What causes subsidence?

Subsidence can be down to the type of soil a property is built on. Some soils, like clay, will shrink and expand with changes in their moisture content, especially in extreme weather like a flood or a prolonged heatwave. Nearby trees may exacerbate this problem, as during dry periods their roots extract more moisture from the soil, creating additional instability which can affect the soil supporting a building’s foundations.

Other causes include poor construction, previous mining activity, and water leaks, which can wash soil away from a building’s foundations.

How do I know if my home has subsidence?

Cracks in a wall are often the first signs of subsidence. If they appear suddenly or are more than 3mm wide, you should seek professional advice promptly. Otherwise, monitor the cracks carefully. If they do not change, this could be down to settlement.

Typically, subsidence cracks create a zigzag pattern which follows the mortar line in the brickwork. Other indicators include: sinking or sloping floors; misaligned windows or doors; ripping wallpaper which is not attributable to damp; noticeable leaning; or an extension which is cracking or breaking away from the main property. If you think your property may have subsidence, you should discuss this with a qualified surveyor. They may be able to reassure you or offer advice on how to fix the problem.

How do I know if the property I wish to buy has subsidence?

As a buyer, you will lack the detailed personal knowledge the seller has. Instead, you will have to rely on your own observations and your professional advisors.

Getting the right survey is very important. Remember, your lender’s valuation is not the same as a survey. A valuation may identify major structural issues, but its aim is to reassure your lender the property is sufficient security for their loan. To get a fuller picture, you should obtain a comprehensive survey from a qualified surveyor.

Your solicitor also has a key role to play in helping you assess the risk. Their conveyancing searches and enquiries may reveal whether subsidence is an issue or requires further investigation. For example, a standard search will establish if your property is in a coal mining area or affected by brine workings. A more comprehensive environmental search could show the wider potential for ground subsidence.

The property information form, which the seller completes, should also give details of any remedial works that have been carried out, like underpinning, as well as insurance or warranty claims. Further investigation should reveal the extent of any problem.

My home has subsidence, what can I do about it?

The most important thing is to get the right advice. A qualified surveyor can identify the cause of subsidence and how best to fix it, for example through removing any offending tree roots or underpinning. You should also check your insurance policy and any warranties, such as National Housing Building Council (NHBC) certificates. A claim under these could cover the cost of any necessary remedial works.

Many insurance policies cover the cost of repairing damage caused by subsidence, subject to an excess. However, they may not do so if your home has suffered from subsidence before. So, it is important to check your policy and to notify your insurers as soon as you know there is an issue.

Must I tell a buyer about subsidence when I wish to sell?

Despite the adage buyer beware, honesty is the best policy when it comes to subsidence.

Firstly, your buyer may discover the issue through their own survey and enquiries. Being upfront, rather than leaving your buyer to find out themselves, can build trust and good will. Secondly, the information you provide in the property information form must be correct. An answer which is wrong or misleading means you could be liable for misrepresentation. In a worst-case scenario, you may have to compensate the buyer for the difference in value.

If your home has had remedial work done, then providing details can reassure the buyer. This is especially so if there is a guarantee or warranty and you can assign the benefit to them. Likewise, a report or other evidence the subsidence is historic may allay concern.

In addition, a history of subsidence means your buyer may struggle to get insurance cover. Ensuring your policy does not lapse and transferring the benefit to them may be the most viable option; few buyers will buy a property they cannot insure.

The property I am buying has a subsidence issue, what should I do?

Talk to your professional advisors. Your surveyor can give you some idea of the likely physical impact, for example if the subsidence is historic then it may be of little effect in practice.

Sometimes, you will need to know more before you can make an informed decision. For example, if the seller’s answers to pre-contract enquiries reveal they, or a previous owner, has made a claim under an NHBC guarantee, your solicitor should make further enquiries. The outcome may reassure you, as remedial works may have corrected the problem. More rarely, those investigations may reveal an ongoing problem, or a situation which could worsen in the future. In that case, you may want to negotiate a price reduction to reflect the additional risk, require the seller to remediate, or decide to look for another property.

How we can help

Our conveyancing solicitors have handled the sale of many properties with a degree of subsidence, and there is usually a pragmatic remedy. We understand the key issues, and can keep your transaction on track even if it throws up some unexpected issues.

For further information, please contact Philip Walker in the  conveyancing team on 0191 297 0011 or email pw@kiddspoorlaw.co.uk

Selling property if you are a residential landlord

With the Renters Reform Bill aiming to strengthen tenants’ rights, and interest rates and economic pressures squeezing property investment returns, more and more landlords are leaving the private rental market. There have been claims in the media of a landlord exodus, and if you are a residential landlord perhaps you have been thinking about selling up too.

‘The environment for landlords is certainly very different from a decade ago,’ agrees Philip Walker, Head of the Conveyancing team with Kidd and Spoor Solicitors Limited.

Now could be a good time to reappraise your investments, however selling any property generates plenty of issues and a rental property has additional challenges, such as tenancy arrangements, deposits, and capital gains tax.  As well as legal advice it is important to seek financial advice in advance.

Recent and future changes

Several recent reforms have affected landlords financially. These include the reduction of relief on mortgage interest payments, changes to capital gains tax and the introduction of higher rate stamp duty land tax for buy-to-lets.

You may also be concerned about proposed future regulations, such as:

  • Energy efficiency proposals – The Government is looking at plans to require all rental properties to meet a new minimum standard for energy efficiency with an Energy Performance Certificate (EPC) rating of C or above for domestic rental properties. Some landlords cite the potential cost of upgrading an old property as their reason for selling.
  • The Renters Reform Bill – At the moment, most residential leases are for a fixed term, usually six months or a year. Provided you follow the correct procedures, you can get your property back at the end of that period. Under proposals set out in the Renters Reform Bill, you will lose this ability and your tenant will have the right to stay in your property. To evict them you must show specific grounds, for example, that they are antisocial or have built up rent arrears. Significantly, the Bill contains provision for landlords to get their property back if they intend to sell.

While these potential reforms may hasten some landlords’ decisions to sell, these proposals are not yet law. Their details could change, and there would usually be a transitional period before they become effective.

Deciding how to sell your rental property

If you decide to sell one or more rental properties, you must also decide whether to do so with vacant possession or with your tenants in place. An ex-rental property with vacant possession could appeal to both investors and owner-occupiers. In contrast, selling with a tenant in situ will generally limit your market to other landlords. On the flipside, you should benefit from the rent right up until the completion date.

Ultimately, the choice depends upon your personal circumstances and the nature of your property. For example, an apartment in a popular city centre may attract lots of interest from investors. In contrast, a rural cottage with a sitting tenant could struggle to sell. You should study the local property market and talk to local agents for advice. Your decision will also influence the legal structure of your transaction, so it is a good idea to discuss your plans with your solicitor early on.

Selling with your tenant in place

This can often be quicker than selling with vacant possession, and there is a lot you can do to help ensure the transaction goes smoothly.

Your buyer will effectively step into your shoes as landlord. Part of their due diligence will involve checking there are no problems with the tenancy. Their solicitor should raise these in their pre-contract enquiries, but making your own checks and collating the relevant documents in advance will help. For example:

  • check you have a valid Energy Performance Certificate (EPC) for the property;
  • ensure the gas and electrical safety certificates are up to date;
  • find the original tenancy agreement;
  • provide evidence the rent payments are up to date; and
  • obtain proof you have protected your tenants’ deposit in the mandatory protection scheme.

There may be other things you will need to provide, particularly if your property is a house of multiple occupation (HMO), and your solicitor should discuss this with you. Your solicitor will also need to provide the buyer with some additional items on completion, such as a rent authority letter, and give notice to the tenant of their change in landlord on completion.

Selling with vacant possession

If you agree to sell with vacant possession, you must ensure your tenants have left by the completion date. If they have not, you may have to pay compensation to your buyer. Should the tenant fail to leave, the buyer could rescind the contract and you would have to return their deposit.

How to ensure the tenants leave at the right time depends, to some extent, upon your relationship with them. If they are amenable, they may agree to leave shortly before exchange. You then know you will be able to give vacant possession on completion.

However, they may decide to leave earlier which would mean a longer period without rent. There is also a small risk of being left with an empty property if your sale falls through at the last minute.

If your tenants do not agree to leave, then the situation is more complicated. You must comply with a formal procedure to bring the tenancy to an end. This involves giving your tenants the correct notice, generally two months. Your tenants should leave on or before the expiry of that notice, and you can then exchange contracts confident you can give vacant possession.

Meanwhile, until exchange, there is still a chance that your buyer could change their mind and you could find yourself with an empty property.

In theory, you could delay giving notice until exchange and then completion could take place two months later, when the notice expires. You should then receive rent right up to completion, and there would be virtually no risk of a void period or your buyer changing their mind. However, problems would arise if your tenants refused to move out. You would then need a court order to evict them, which can take several months, meaning you would be unable to give vacant possession on completion.

We would not usually advise this last option. However, if your buyer is agreeable, it may be possible to negotiate a conditional completion date, which is something your solicitor could explore. You would then only be obliged to complete once your tenants have actually left.

How we can help

Selling a rental property inevitably involves many variables, all of which can impact on timescales. If your tenants are cooperative and your is buyer flexible, the chances are that your transaction will proceed quickly and smoothly.

Selling an investment property raises additional legal issues to selling your own home, so it is important to instruct a solicitor who is experienced in this area and who can give your transaction their individual attention.

For further information, please contact Philip Walker in the Conveyancing team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Lasting Powers of Attorney: Help is at hand

It can be a stressful time for families when advised that they need to sell their parents’ home due to ill health or because equity is required to fund care home fees.

When acting under a Lasting Power of Attorney (LPA) and it does not specifically prevent the selling of property, then you may already have the authority to go ahead and place the property on the open market for sale, deal with the necessary forms and distribute the net sale proceeds.

If there is a restriction in the LPA which prevents you from selling the property, you may need to make an application to the Court of Protection stating why it is in the best interests of the person you act for to sell the property. This must be done before the property is placed on the open market to prevent delays with any proposed sale.

Once the Court is satisfied that the property should be sold, they will make an Order providing the authority to sell the property. This is required by the solicitor dealing with the sale before they can take instructions.

Any appointed Attorney must ensure that they are acting in the best interests of the person who lacks capacity. It is essential the property is not sold at an undervalue.

Care should also be taken if property is jointly owned and only one of the owners lacks capacity. This can happen where a property is owned by a husband and wife and one party lacks capacity. If the spouse has been appointed, as their sole Attorney, then the Court of Protection needs to appoint another party, a trustee, to act on their behalf. This can be a lengthy and costly and cause delays to a sale.

If you are selling a property or you are appointed as an Attorney, contact Philip Walker on pw@kiddspoorlaw.co.uk or Neil Shearer on ns@kiddspoorlaw.co.uk. Alternatively, please call 0191 297 0011 with your query.