Legal problems you may run into as a seller

Lease problems

If you are selling a lease, the buyers’ solicitors will be checking to make sure that there are no ‘beaches of covenant’. A lease contains a whole series of obligations on the part of the flat owner, called ‘covenants’, and if you break one it’s called a ‘breach’.

A common breach of covenant is that a flat owner does some building works without getting permission from the landlord when the terms of the lease requires the landlord’s permission to be obtained first. Leases vary enormously in the obligations they impose. Some leases say that you cannot carry out any works to a flat, even non-structural internal works such as changing the bathroom fittings or taking down a partition wall, without first getting consent. Other leases say that you can do internal non-structural works without needing to get the landlord’s permission, but you need permission for anything which affects the structure or exterior.

Legally speaking, the owner (the ‘lessee’ or ‘tenant’) is regarded as one continuous person, even though the flat changes hands, so a new owner can be made liable for breaches which happened in the past. So, your buyers will be concerned if it seems that any works which required the landlord’s permission were done without permission. They will probably insist that you get retrospective permission from the landlord (an approval in writing, after the event). That can take time, depending on how co-operative, or not, the landlord is.

Ownership problems

There should be no problems with your ownership of the property and the rights you need over other people’s property. Your solicitor should have picked all such matters up when you bought. Legal problems are not usually amenable to price reductions, because unlike building works, it’s not just a matter of spending some money to put the problem right.

Usually, your best bet is to simply say to your buyers, ‘This is what I have to sell, either buy it or pull out’. Some people, and their solicitors, sometimes just agonise over a problem but, faced with a determined and confident reaction, finally accept the situation because it may not be perfect on paper, but it works in practice. If you don’t act decisively, you can end up going round in circles for weeks.

Many legal problems are more technical than real. Legal titles often contain what are called ‘restrictive covenants’ which are obligations on the homeowner not to do something. For example, it might say you can’t build an extension without a nearby owner’s consent. If you can’t produce a bit of paper showing that consent, you have a technical legal problem. But if the extension has been up for 10 years, and the neighbours watched it going up, and they have never raised an issue with it since, it’s not a deal-breaking legal problem.

If, on the other hand, it turns out that you don’t own the driveway to your house, or don’t have a right of way over it, then you have a genuine legal problem which will probably cause the deal to fall through. (In a situation like that, you should have a right of action against the solicitors who acted for you when you bought.)