This article discusses about the steps to be taken by the conveyancing solicitor before completion of leasehold conveyancing transaction.
The transfer deed
This is prepared by the buyer’s solicitors. The points to be included in a deed of assignment are the same as the points that are included in the transfer of freehold property.
When buying a lease with an absolute title, the buyer makes pre-completion searches in the same manner as he would when buying a freehold property. When the title is unregistered, a Land Charges Department search against the name of the owners of the leasehold title is undertaken. When the seller is a company, a company search is made. If the freehold or reversionary title is deduced, the names that appear on investigation against the title should be included in the land charges search. If the lease is registered with a good leasehold title, a search must be made at the Land Registry with respect to the registered title and a Land Charges Department search must be made against the estate owners of the unregistered reversion.
The landlord solicitor shall supply the top copy of licence which is made by a deed when it contains covenants. When the buyer gives direct covenants to the landlord, the licence is drawn in two parts. The landlord signs the original and gives it to the seller on completion to be given over to the buyer. He then executes his part of the licence and forwards it to the landlord on completion.
Unless the completion takes place on a day when the rent and other charges become due, the buyer will have to pay a sum on completion as apportionment. The seller should provide a completion statement that includes the sum that is due along with an explanation of how this sum was calculated. The demand and receipt copies on which the apportionment is based should also be included along with the completion statement. This allows the buyer to check the apportioned sums. Sometimes, it is not possible to ascertain the exact costs for some aspects such as service charges. In such cases, a provisional apportionment of sum should be made on the ‘best estimate’ basis.
Photo courtesy: Roger Wollstadt