Reviewing commercial leases – What tenants need to know
After saving for years, you finally have a sufficient deposit to buy your first house or flat. You find the perfect home and you are ready to take the first exciting step on to the property ladder, but there are a number of legal and practical issues that can catch first-time buyers off guard.
Having helped buyers for almost 90 years to purchase their first property, we have created a list of five lesser known, but critical issues that are often flagged during conveyancing.
Your mortgage offer is not guaranteed
So, you have secured your mortgage agreement in principle and everything seems set.
However, this is an assumption that often leads to upset when first-time buyers find out that their lender must carry out further checks before issuing a formal offer.
This will normally include a valuation of the property and a more detailed review of your finances. Some lenders may even dictate which solicitor you are permitted to use.
During this period, if anything changes, such as your employment, credit profile or even the lender’s valuation, your mortgage offer could be delayed or withdrawn.
Legal searches can reveal unexpected issues
An important part of the conveyancing process is a series of property searches. It may feel like you are just crossing the t’ and dotting the i’s, but you mustn’t underestimate their importance.
Searches can uncover issues such as planning restrictions, flood risk, drainage concerns, subsidence or planning permissions for nearby developments that could affect your enjoyment or the value of your property.
In some instances, these may not be sufficient to stop the purchase altogether, but they may prompt you to review your decision or try to renegotiate your offer.
Leasehold terms can have long-term implications
Many new-build properties and flats are subject to a lease. The length and details of this lease can have a substantial impact on the purchase of the property and your ability to acquire a mortgage.
If you are buying a leasehold property, issues such as a short remaining lease term, rising ground rent or restrictive covenants can also impact future resale values.
These are not always obvious at first glance, which is why a thorough legal review is essential before you commit. In many cases, you may be able to extend the lease or acquire the freehold, but this can be costly and complex.
Boundaries are not always as clear as they seem
When viewing a home, it is easy to assume that the fences, walls and hedges mark the exact legal boundary of the property.
Unfortunately, title plans are often only indicative of the formal boundaries and responsibilities are not always clearly defined.
It is not uncommon for neighbours to also have informal agreements about boundaries that have never been altered properly with the Land Registry.
As a result, you may unintentionally find yourself in a dispute with your new neighbours or face unexpected maintenance obligations, particularly if issues arise after you have moved in.
You may be responsible for more than just the property
It is not uncommon for properties to come with additional legal obligations beyond the four walls, roof and garden that you can see from the street.
For example, you may be required to contribute to the maintenance of shared accessways, private roads or communal areas.
In rarer cases, there may even be historic liabilities attached to the land itself that require you to contribute to its upkeep.
These obligations can lead to substantial costs in future, so you must understand exactly what you are taking on by conducting thorough legal due diligence.
Early legal advice can make the difference
Buying your first home is a major milestone in your life. One that has probably been years in the making, which is why the legal process plays a key role in protecting your investment.
A careful review of the title, searches and contract terms can help identify risks and give you confidence to buy your first home.
If you are preparing to take your first step onto the property ladder, getting legal advice that you trust from the outset can help ensure the process runs smoothly from offer to completion.
For help buying your first home, please speak to our residential property experts.
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