The Law Society’s Conveyancing Quality Scheme (CQS) core practice management standards emphasise robust, up-to-date procedures, especially given the fast-evolving regulatory and statutory environment around leasehold property.
A thorough CQS Purchase of a Leasehold policy should cover the following core areas:
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Financial Implications: Clear guidance on assessing service charges, reserve/sinking funds, special assessments, and major works contributions.
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Ground Rents & Onerous Clauses: Procedures for identifying escalating ground rents, doubled ground rents, short review cycles, and evaluating them against current council and lender acceptability limits.
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Marketability & Mortgageability: Protocols for checking lease length thresholds (e.g., 85+ years vs. short leases), unexpired terms, and aligning title assessments with CML/UK Finance Handbook requirements.
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Extended Mortgage Terms (35-Year Impact): Risk protocols addressing how longer mortgage terms interact with remaining lease length, ground rent review cycles, and long-term resale value.
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Management Information & Enquiries: Standards for obtaining and reviewing LPE1/FME1 forms, managing agent responses, transfer fees, and fee transparency.
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Referrals & Conflicts of Interest: Explicit guidelines on handling developer referral fees, estate agent arrangements, and maintaining client independence.
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Building Safety Act 2022: Dedicated procedures for handling higher-risk buildings (HRBs), relevant buildings, qualifying leaseholder status, Landlord Certificates, Leaseholder Deeds of Certificate, and remediation liabilities.
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Comprehensive Reporting: Standardised reporting templates to ensure clients receive clear, accessible advice on all lease liabilities, obligations, restrictions, and financial commitments before exchange.