Converted House in 2 Flats with Deemed Consent How to sell?

[eebai]

Hi,

I need some advise on a property that i converted years ago into 2 flats. I have been granted retrospective deemed consent in 2009 by the local council and so have separate door numbers for the flats. I also have separate billing of utilities due to splitting the utilities with separate meters for gas & electricity, council tax is billed separately.

Can i sell the property as 2 X single flats? What would i need to do? i have not registered the 2 flats with the land registry?

What are the repercussions with my current lender as i have not informed them of the change in use?

Can i sell the property in the current structure and will it effect the current value positively or negatively?

Are there any common watch outs i need to be aware of?

Thanks in Advance

 

[jamesr36]

This is really a question for a solicitor so you need to ask them.

The important point is that you have planning permission which would have been the hardest hurdle to overcome.

You will not be able to sell each flat separately as I assume that you only have one set of deeds. Before you sell your solicitor will be able to write some leases and deal with the deeds so that they can be sold separately. Without this the can only be sold together which will definitely reduce the value. You are going to have a problem with the lender as you can’t have one mortgage spread across two properties. Maybe if you have enough equity you could move the mortgage to just one of the flats, otherwise you might be able to come to an arrangement with the lender. Ideally you might be able to get the solicitor to divide them up and deal with the sale all at the same time.

You might also be asked for the building regulation approval which I assume you also don’t have. This can often be dealt with by buying an indemnity to protect the future buyer if it becomes a problem but this might put some people off when you sell.

If I were you I would speak to a solicitor for a more expert view

Cheers

 

[jeds]

What do you mean by 'deemed consent'. Is that a certificate of lawfulness or just a letter from the council? In the first instance you need to regularise everything; Get a certificate of lawfulness (if you don't have one already) Get the leases separated and set up a management company. Those are fairly straightforward.

You could regularise building regulations but only go down that route if you are certain you did the conversion properly. Once you start regularisation of bregs, or even just make an enquiry about it at the council, you can't then go back to an indemnity policy. The insurers just won't touch it. The second best alternative is an indemnity but, as mentioned above, it will put some buyers off.

Then you will have to sort out the lender. They may attempt to backdate any premium on the mortgage. Ideally you would finance elswehere to get them out of the picture and then set it up with the new lender so that one flat could be sold separately. If that just isn't possible you'll have to approach them and negotiate the best outcome.

 

[eebai]

What do you mean by 'deemed consent'. Is that a certificate of lawfulness or just a letter from the council? In the first instance you need to regularise everything; Get a certificate of lawfulness (if you don't have one already) Get the leases separated and set up a management company. Those are fairly straightforward.

You could regularise building regulations but only go down that route if you are certain you did the conversion properly. Once you start regularisation of bregs, or even just make an enquiry about it at the council, you can't then go back to an indemnity policy. The insurers just won't touch it. The second best alternative is an indemnity but, as mentioned above, it will put some buyers off.

Then you will have to sort out the lender. They may attempt to backdate any premium on the mortgage. Ideally you would finance elswehere to get them out of the picture and then set it up with the new lender so that one flat could be sold separately. If that just isn't possible you'll have to approach them and negotiate the best outcome.

Yes a retrospective of lawfulness so that the council has given me the approval for the conversation. I.e planning permission retrospectively.

I don't actually have a formal certificate just a letter from the council granting me permission. Do I need to ask for a formal certificate?

What's the difference between regularise building regulations and the leases separated and set up a management company?

 

[eebai]

This is really a question for a solicitor so you need to ask them.

The important point is that you have planning permission which would have been the hardest hurdle to overcome.

You will not be able to sell each flat separately as I assume that you only have one set of deeds. Before you sell your solicitor will be able to write some leases and deal with the deeds so that they can be sold separately. Without this the can only be sold together which will definitely reduce the value. You are going to have a problem with the lender as you can’t have one mortgage spread across two properties. Maybe if you have enough equity you could move the mortgage to just one of the flats, otherwise you might be able to come to an arrangement with the lender. Ideally you might be able to get the solicitor to divide them up and deal with the sale all at the same time.

You might also be asked for the building regulation approval which I assume you also don’t have. This can often be dealt with by buying an indemnity to protect the future buyer if it becomes a problem but this might put some people off when you sell.

If I were you I would speak to a solicitor for a more expert view

Cheers

Hi

I don't have separate deeds as you guessed? I could get the solicitor to sort this.

If I do get the property separate deeds one flat does not have enough equity to pay off the whole mortgage. So I would have to sell both flats at the same time right? Eg I remortgage one flat and sell the other then pay off the current lender? Is that right

 

[jamesr36]

Unusual that you have a letter from the council. It is an approval or just a letter saying that they do not expect any issues if you applied?

You would normally get a lawful development certificate. You need to apply for this certificate with your evidence that the flats have been flats for 10 years min and if the council agree that the evidence is adequate they will issue a certificate. The letter might suffice but suppose it depends on what it actually says.

I think if you want to sell them separately you will have to legally split the flats – ie two leases, two sets of deeds, two land registry registrations. Your solicitor will do all of this for you. This will be a problem with the lender as they will not allow this on you current mortgage.

If you don’t legally split them you can only sell them both to one buyer. He could then buy the freehold knowing that he can split them up once he has bought.

Contrary to my last post, you will not be able to get the solicitor to split them up and deal with the sales all in one go as you are unlikely to get two different purchasers to buy and complete on the same day.

If you are confident that the flats will sell quickly and have a decent amount of equity lots of companies do bridging finance for this type of thing but the interest rates are high so this is no good if they take ages to sell.

I would avoid regularised building regs approval as the flats are never going to meet the rules and you will probably end up rebuilding each flat. Just get an indemnity if asked and if the sale falls through someone else will end up buying it.

 

[luisdesign]

It sounds like you have received a retrospective planning permission (planning permission for works already completed) rather than a certificate of lawful (existing) use.

You need to be clear as to what you have. One or the other will do the job, but it needs to be one of those two things or you will stall before you even get started.

Maybe if you can scan / copy the letter to show us we will be able to see whether what you have is what you need!?

 

[eebai]

It sounds like you have received a retrospective planning permission (planning permission for works already completed) rather than a certificate of lawful (existing) use.

You need to be clear as to what you have. One or the other will do the job, but it needs to be one of those two things or you will stall before you even get started.

Maybe if you can scan / copy the letter to show us we will be able to see whether what you have is what you need!?

The letter just confirms the new numbering Ground floor & First floor and states the following on the subject line -
2 flats without planning permission -Deemed Consent RETROSPECTIVE

based on London Building Acts (Amendment) Act 1939 Proposed Renumbering of Buildings/Properties. it is not & i don't have at certificate?

so i resume it is a retrospective planning permission (planning permission for works already completed)

 

[jeds]

Sounds like we're labouring this but it is important. Did you fill out an application form and send it in with a fee and details about your property and the conversion and pay a fee, and then get an acknowledegment with a planning reference number, and then did you wait 8 weeks for the result. Is the result posted on you local planning website. You can look that up by searching for your road. Check these things. To have legal status it must either be a certificate of lawfulness or a planning consent. Otherwise what you have is just a letter.

 

[eebai]

Sounds like we're labouring this but it is important. Did you fill out an application form and send it in with a fee and details about your property and the conversion and pay a fee, and then get an acknowledegment with a planning reference number, and then did you wait 8 weeks for the result. Is the result posted on you local planning website. You can look that up by searching for your road. Check these things. To have legal status it must either be a certificate of lawfulness or a planning consent. Otherwise what you have is just a letter.

I defiantly don't have a formal certificate so i will go back to the planning officer and ask them for a certificate of lawful (existing development).

Once i get this based on advise will try and get buyers for the flats and then get the deeds changed.

is this on the right lines?

 

[jeds]

It will be difficult to sell without the CLD. You can get away with building regs with an indemnity policy but solicitors are usually much more awkward about planning.

Splitting the lease is fairly easy. Speak with land registry - they are nomally very helpful. You will need lease plans. Download the land registry guide for info on what the plans need to include.