When a leasehold property is being sold, conveyancing solicitors for the buyer will need to undertake a range of investigations/searches on the property. Primarily, these will ensure that there are no major problems with the property. For a leasehold property, there are details that the new owner will need to be aware of which is where the LPE1 comes in.
An LPE1 is a standardised questionnaire for freeholders, management companies and managing agents to provide information regarding a property. The use of this standardised form allows leasehold information to be provided in a consistent and uniform manner. LPE stands for leasehold property enquiries, which form the basis of a leasehold ‘Management Pack’.
The ownership of a leasehold property is very different from owning a freehold property because the leaseholder does not own the structure of their home nor the land that it sits on. These are owned by a freeholder, who is entitled to charge a ground rent from each leaseholder together with any costs for the management and maintenance of the building.
The LPE1 will therefore need to confirm specific details regarding ground rent, service charges and the management of the building, such as, who is responsible for what and the budgets for the current year. In particular, the LPE1 will establish whether there are any problems that exist or costs that may be incurred with the property in the near future.
– For those selling:
When selling a property, there can be a requirement of the seller to provide the LPE1 enquiries. This is because, as the seller, you are required to disclose various pieces of information about the property, that aid the purchaser in carrying out their due diligence. The buyer places reliance on the information supplied to them, therefore, obtaining the information from the landlord or agent directly helps avoid any potential misrepresentation issues arising. This is in order that they are aware of the relevant matters affecting the property and can make an informed decision as to how they wish to proceed.
– For those buying:
When purchasing, this is an opportunity to find out all relevant information pertaining to the involvement of managing agents and/or the property landlord. As a buyer, it is imperative that you are aware of any payments that may be due to any landlord or agent, when they may be due, and what other requirements are placed upon you in this regard.
The LPE1 is divided into 8 Sections as follows:
The completed LPE1 form together with the requested documents combines to form the Management Pack.
– Forfeiture documentation
– Deeds of Variation
– Deed of Covenant
– Certificate of Compliance
– Licence to Assign
– Permission to alter the property
– Notices served on the lessee
Typically, the freeholder, managing agent, management company or Resident’s or Tenant’s Association will complete the LPE1. It is often not possible for the selling leaseholders to complete the LPE1 form as they may not have sufficient knowledge of or access to the required information. There are cases where you need to get a leasehold pack from the freeholder who manages the ground rent and also the managing agent who handles the running and management of the freehold and is paid service charges.
The costs that freeholders and managing agents charge for completing an LPE1 form and providing a management pack can be up to as high as £500.
Compiling the required information for an LPE1 can be a time-consuming process. As such, it can take a number of weeks before the management pack has been received by the requesting solicitor.
At Horizon Management we aim to get the pack back to you within 5 working days to avoid holding up the conveyancing process.
An LPE2 is a document that provides a summary of the key information contained within a LPE1 form and management pack. Essentially, this includes costs in relation to ground rent, service charges, insurance premiums and reserve funds in order to make the financial commitment of a leasehold property easier to understand for prospective buyers.
It is not mandatory to use an LPE1 or LPE2 form, however, they make it easier for conveyancers to advise clients because they receive information in a standardised and consistent format. Furthermore, the wider use of these forms helps to streamline and speed up the process of leasehold property purchases.
We believe that as a buyer of a leasehold property, it is important to ensure that you receive a copy of the LPE1 and management pack from your solicitor. This will primarily enable you to assess the financial commitments involved and make an informed decision as to whether to proceed with the purchase.
Here at Horizon, we aim to make this process as straight forward as possible by ensuring a fast turnaround at a low price.
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