Q. What will it cost to purchase/negotiate a lease on the property?
A: This will depend on a number of factors. Clearly the work is different depending upon whether the instructions you give us are to purchase the property or obtain a lease. In each case the main element of cost is the amount of time spent on the work but we may be able to offer a fixed price at the outset. We will undoubtedly offer an estimate of costs with details of disbursements (payments we will pay to others on your behalf as part of the work to secure the property). We will provide this in advance of accepting instructions to deal with the matter.
Q. Do I have to pay Stamp Duty Land Tax (SDLT)?
A: Whether you pay SDLT is dependent upon the purchase or lease value of the property. Currently, on a purchase, if the cost of the property is between £150,000 and £250,000 SDLT is charged on the whole of the purchase price at 1%. Between £250,000 and £500,000 it is 3% of the whole price and above £500,000 it is 4% of the whole price. You should also be aware that if VAT is payable then the SDLT is calculated on the whole amount of the price including the VAT. SDLT is also payable on some leases and this depends on the term of the lease (ie how long the lease is for) and the amount of rent payable each year. Your solicitor will explain if it applies and calculate the likely amount of SDLT at the outset so you know the cost early on. Please note that SDLT is payable by the buyer or the tenant ie by the person taking possession of the property.
Q. I am a tenant. My lease runs for several more years. Can I settle up and move on?
A: The term of a lease is legally binding upon all the parties and cannot be renegotiated. There are however, mechanisms that allow you to either sell the lease to someone else for the remainder of the term or if the lease includes a Break Clause you may exercise this facility at the appropriate time. Selling the lease to someone else is often the best way forward. This will involve seeking the consent of your landlord and finding a new tenant, one who is willing to pay the price you are asking. The landlord will normally undertake the necessary check of references and financial standing, in the same way as when you yourself took the lease. A break clause is a clause in the lease terms that provides for a review of the lease with the option to give it up without further penalty. It normally happens at fixed points in time in the period of the lease and if you miss it you lose the opportunity to exercise it. It will require you to provide written notice and is usually conditional on all the sums due under the lease having been paid up to date. Break Clauses are negotiated before the lease is entered to and included in the terms of the lease. They are not added once the lease is in effect. Sometimes it is possible to obtain agreement of the landlord allowing you to surrender the lease but normally he or she will want an additional payment from you to agree this.