Selling Property With Defective Lease
Flats and houses can sometimes have a defective lease and this may make it more difficult to find a buyer.
Your top questions when selling property with a defective lease
✅ How do I know whether my property is considered to have a defective lease?
In simple terms, a defective lease exists where you’re the owner of a leasehold house, flat or other type of property and the lease agreement that you signed with the freeholder – who outright owns the building that contains your flat – has one or more defects. These problems can exist because of drafting errors, unfair terms or several other explanations.
✅ What are some examples of defective leases for a property?
There are a number of scenarios that can cause the lease agreement at your property to be considered defective, with some common situations include excessive service charges or ground rent, conditions imposed by the freeholder that put an unfair or illegal burden on the leaseholder, the plan for the flat not matching the actual property, and more.
✅ Does having a defective lease make it harder to sell a home?
Yes, buyers are likely to have one or more concerns about purchasing a property that has a defective lease compared to a home without this issue, although their worries about the home will be specific to the lease agreement – such as having an excessively high ground rent or service charge, which will be a dealbreaker for buyers that have a limited budget.
✅ Is a buyer able to get a mortgage to purchase a property with a defective lease?
It will be much more difficult, and impossible in certain cases, for a prospective buyer to get approved for a mortgage to purchase a home that has a defective lease. That’s because home loan providers will have concerns about being able to resell the property in the future if needed, should the buyer end up defaulting on the loan and the lender repossess it with plans to sell.
✅ Should I attempt to fix my defective lease before selling my home?
Trying to fix whatever problems have caused your lease to be defective is certainly an option before attempting to sell your home, and doing so would eliminate buyers’ concerns about that specific issue. But this could be a lengthy and potentially expensive process, and you can still get a fast and fair offer on your home from a quick buyer without fixing your lease first.
✅ What is the fastest choice for selling a property with a defective lease?
Typically, the most rapid way to sell almost any category of home, including those with a defective lease, is to LDN Properties or another quick buyer, because the timeline should only be a few short weeks from beginning to exchange of contracts. Selling on your own, at an auction or with an estate agent are all options that could at least several months.
✅ Which methods for selling a home with a defective lease charge fees?
If you choose to sell your property using the services of an estate agent or through an auctioneer then you will need to pay them commission, which is deducted as a percentage of the final sale proceeds. But if you decide to sell your home to a quick buyer like LDN Properties or without any third-party help, you will be able to avoid paying any commission.
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