Residential property: Your questions answered

However straightforward the transaction seems at first, it is surprising what pitfalls lurk to trip up the unwary.

Here are some examples of queries we have helped our clients with on residential sales, purchases, lettings, and mortgages:

The country house I am buying has a resident housekeeper and I think the gardener lives in the lodge. Does this matter?

Both parties may have employment rights you will inherit and the gardener may have the benefit of a tenancy. Depending on whether you want to replace them with your own staff, we can advise you on the appropriate procedures to protect your position.

I am buying a new flat off-plan and the developer is carrying out some extra work for me to customise the kitchen in return for payment when I complete the purchase. Are there any tax implications for me?

Yes, the amount of stamp duty land tax will increase if the works are carried out before completion or pursuant to the Contract with the developer; the cost of the extra works must be added to the purchase price when calculating how much SDLT is payable by the buyer.

Planning permission has been granted for my extension and I hope to start the works next month, but is there anything else I need to consider?

You will need to apply for building regulations consent for the works and you may also need listed building consent if your house is a listed building. If the property is a flat, the lease will need to be checked to see if it permits alterations and you may need to apply for formal consent from the landlord. Moreover, depending on the proximity of the extension to the adjacent properties, party wall notices may need to be served on the neighbours at least two months before the works start, and party wall awards may need to be negotiated. We can provide you with an overview of the procedure, and we can put you in touch with a suitably qualified party wall surveyor. For larger building projects, our dedicated construction team can advise on the appointment of your architect, structural engineer, and other parties, and on the terms of the building contract.

The country house I am selling has two paddocks; one is used by a local farmer to graze his sheep while the other is grazed by horses. What issues might this cause on the sale?

It is possible that you may have accidentally created a tenancy. If your buyer does not want these arrangements to continue, it may be difficult to terminate them without co-operation from the other parties. Consideration would have to be given to the duration of the arrangements, and whether there are written agreements, tenancies, or licences. We would also need to establish the expectations of your buyer, and the intentions of the local farmer and the horse owner before we advise you on the best way forward.

My co-executor and I have been told by our estate agents that we need to extend the lease of my deceased mother’s flat as part of the sale process. Is this possible?

Provided that probate was granted less than two years ago and that your mother would have benefited from a statutory right to extend her lease, it is possible for executors to apply for a lease extension and then to assign the benefit of the claim to the buyer. Selling with the benefit of the claim is likely to increase the sale price achievable. We can handle this for you as part of the sale process, with input from our dedicated leasehold enfranchisement team.

When I purchased my property in Mayfair, the purchasing vehicle was a BVI company. Should I be transferring the property into my personal name to avoid paying ATED and other taxes in the future?

There is no “one size fits all” answer to your situation, you will need detailed advice on the most tax-efficient way of holding your property in the light of your personal circumstances, including your domicile, whether you are a non-UK tax resident, and the current and projected use of the property by you and your family. Our dedicated private client team can provide the advice and assistance you will need to make an informed decision.

I am buying a farmhouse with 200 acres and some holiday cottages in Gloucestershire for £10 million. The estate agents tell me that the SDLT rate will be charged at 4% only instead of 12% or even 15%. Is this too good to be true?

If the land you are buying qualifies as mixed land (where residential and non-residential elements are acquired in a single package, then the rate may indeed be 4%. However, if you intend to acquire through a corporate vehicle, the benefit of this route may be lost and the rate applicable to the value of the farmhouse and possibly also the cottages will be 15%.

I am looking for new tenants for my London flat; are there any new regulations I need to know about before I sign up the new tenants?

Your letting agents will be able to assist you to ensure that furnishings comply with statutory regulations, that gas appliances are subject to a gas safety check, and that the deposit to be paid by the tenants is protected under the tenancy deposit scheme. We can also provide you with an overview of these issues and the new regulations requiring immigration checks to be carried out in some circumstances.

You acted for us when my partner and I bought our house in equal shares. Are there any other steps we should be thinking about now we own a property together?

It would be sensible for you both to make Wills. Otherwise, on the death of one of you, the share in the house owned by the deceased will pass under the UK intestacy rules to his or her next of kin, not to the survivor of you. This may not be what you both have in mind.  Our private client team will be able to draw up Wills, and to advise you on other matters such as declarations of trust and pre-nuptial agreements.

I am buying a flat in Chelsea with a share of freehold. Is the lease of the flat now irrelevant?

Freehold flats do not exist in the UK. You will still be purchasing the leasehold title to the flat, and the lease will still govern the relationship between you, the other lessees, and the freehold owner. The freehold of the building is most likely to be owned by a company, and the shares in that company will have been issued to the current lessees. The seller will be transferring his share in the freehold company to you.