What is a Leasehold property?
When you purchase a leasehold flat/apartment, you are buying ownership of the property for a fixed amount of time. You do not own the land upon which the building is built.
Once a lease is signed, it outlines the obligations of both the Leaseholder and the Freeholder. Both parties should pay notice to the contents of this Lease.
The Leaseholder is responsible for the maintenance of everything within the four walls of the property that includes plasterwork, floors, kitchen, bathroom, bedroom, living room etc. The Leaseholder should normally pay a monthly service charge and this can go up or down each year depending on what works need to be carried out. You may also need to pay ground rent (which should also form part of your monthly service charge). You are responsible for paying towards costs associated with keeping the building and grounds in good repair (again usually paid through your monthly service). You may have to pay into a reserve account or “sinking fund” to cover major repairs (this may also form part of your monthly service charge).
The building and the land is owned by and is the responsibility of the Freeholder and the Freeholder is responsible for maintaining and repairing the building structure. The Freeholder will need to keep the hallways, staircases and communal areas in good repair as well as the external grounds, car parks, communal green areas etc.
Most Freeholders do manage the building well, however at times this does not happen. You may feel that the service charge is too high or you may feel that the Freeholder is not repairing the building when problems arise. If this is the case, you do you have options.
1. If you have concerns about any part of the building that you feel need addressing by the Freeholder or their Managing Agent, if you feel your service charge is too high or you are paying too much or not enough into your reserve fund or “sinking” fund, you should write to the Freeholder or their Managing Agent under Section 21 of the Landlord and Tenant Act 1985 to divulge what has been spent on the upkeep of the building and grounds. The Freeholder or their Managing Agent must provide this within one month of your request.
2. If the report does not include the concerns you have raised, you can write to the Freeholder or their Managing Agent expressing your concerns. Again keep a copy of all correspondence and only accept written responses as verbal responses cannot be held to use at a later date if needed.
3. If your concerns are being ignored, you can raise a dispute using form Service charges and leasehold management by way of a leasehold valuation tribunal. For free help and guidance with this you should contact the Leasehold Advisory Service.
Not every lease is the same, how long is left on the lease?
Once a lease has less than 80 years remaining, it becomes very costly to extend it. If your dream flat has a lease of under 80 years, you would need to extend it. Seek legal advice before you enter into any form of agreement and use caution when purchasing a Leasehold property.