What comes first?

VCuckson

Selling my leasehold house and the leaseholder wants £720 to sign a Licence to assign. It's a lot of money so my question is? Does it have to be done before the buyer signs the contract? Or can they sign first so I won't lose out if they change their mind. We are quite far along in the process. 

Slithery

VCuckson said:

Does it have to be done before the buyer signs the contract? Or can they sign first so I won't lose out if they change their mind.

The buyer signing the contract doesn't commit them to purchasing your property.

It's only when contracts are exchanged that they are obligated to buy.

theartfullodger

Depends probably on what your lease states on the matter

user1977

What does your contract say about it? What's your solicitor's advice?

eddddy

VCuckson said:

Selling my leasehold house and the leaseholder freeholder wants £720 to sign a Licence to assign. It's a lot of money so my question is? Does it have to be done before the buyer signs the contract? Or can they sign first so I won't lose out if they change their mind. We are quite far along in the process. 

Realistically, you will want to have the licence to assign before contracts are exchanged.

And the buyer can pull-out at any time before contracts are exchanged.

In theory, the freeholder could refuse consent to assign. If you've exchanged contracts to sell (assign) the house, but the freeholder then refuses consent to assign, you'd end up either in breach of contract or in breach of the lease.


So as you say, there's a risk of losing the fee - but I guess the freeholder would argue that the lease was clear about needing a licence to assign, so you shouldn't have bought the house if you didn't like the terms of the lease.


However, you can ask the freeholder for a breakdown of what they will do for the £720 fee - they need to be able to show it's reasonable.

For example, if all they do is spend 30 mins printing out a document with relevant names added - they're not allowed to charge you £720 for 30 mins of work.

canaldumidi

I may be wrong, but surely the assignment will only happen if the lease is sold? So getting the Licence signed pre-Exchange risks the sale falling through with the assignment still in place.....?

So it should be done post Exchange, and arguably post-Completion.

But this is not an area I'm very familiar with.

user1977

canaldumidi said:

I may be wrong, but surely the assignment will only happen if the lease is sold? So getting the Licence signed pre-Exchange risks the sale falling through with the assignment still in place.....?

Merely the freeholder's consent to the assignment, the assignment itself only happens on completion. But also not sure how one normally juggles these things in a residential transaction.