This article discusses about the steps to be taken after completion of leasehold conveyancing transaction.
Stamp Duty Land Tax (SDLT)
Ideally, SDLT is payable on the premium and the rent. But with respect to an assignment, SDLT is payable on the purchase price charged by the seller and is due at the same rate as the sale of freehold land. The procedure for payment is also to be followed. However, it is not to be paid on rent.
Notice of assignment
When a notice is to be given to a landlord requesting consent for assignment, this has to served in duplicate along with the appropriate fees mentioned in the lease. The Lender’s Handbook says that notice of a mortgage is to be given to the landlord irrespective of the fact that it is required by the lease. The landlord should be asked to sign on a copy of the notice and return this copy to the seller as acknowledgement of having received the notice. This copy is then kept along with the title deed as compliance of covenants regarding the same.
If the lease is already registered, an application for the registration of the transfer to the current tenant should be made within the priority period provided by the pre-completion search. This is irrespective of the time left until the lease expires; once registered, it continues until the term ends.
An unregistered lease that has more than seven years unexpired on the date of transfer to the buyer shall have to be registered at the Land Registry within two months of the assignment or shall be considered void. An application for registration should be produced at the Registry by the buyer along with satisfactory evidence of a superior title. When the reversionary title is already registered, the lease is noted against the superior title. In other cases, the buyer should register a caution against first registration against the freehold title to protect his interest against a subsequent buyer of a reversion. When a lease has seven or less than seven years unexpired, it cannot be registered with a separate title, but will gain an overriding interest against a superior title which can be registered.
Outstanding apportioned sums
The conveyancing solicitors of both parties to the transaction should adjust the provisional apportionments that were made on completion. The payment must be made within 10 working days of notification by one party to the other.
Photo courtesy: Dan Perry