Leaseholders - Your Rights

As a leaseholder your rights and responsibilities are different to those homeowners who own their property outright.  The following information should help you identify what your rights as a leaseholder are.

What is leasehold?

Leasehold ownership of a property is simply a long term tenancy, that is the right to occupy and use the dwelling for a long period - the 'term' of the lease.

Most leases are made for 99 to 125 years and the property may be bought or sold during the period.

The leaseholder does not own the property outright.  Ownership only relates to everything within the four walls of the property, whilst the structure of the building and the land it stands on is owned by the freeholder.  The freeholder is responsible for maintenance and the repair of the building.

What is a lease?

It is the length of time a leaseholder may stay in the property.

It is also the name of the agreement between you, the leaseholder, and the owner of the property, known as the freeholder.  This agreement is a contract.

The lease sets out the contractual obligations of the two parties.  It sets out what the leaseholder is responsible for and also the level of service they can expect from the freeholder.

What are the leaseholders rights and obligations?

The leaseholder first and foremost, has the right of peaceable occupation of the property for the term of the lease.  In addition, the leaseholder has the right to expect the landlord to maintain or repair the building and manage the 'common parts', namely the entrance hall, staircases and landings.

The leaseholders obligations are:-

-         the payment of ground rent

-         a requirement to pay service charges.  To cover the cost of general maintenance and repairs, insurance of the building and, in some cases, the provision of lifts, lighting and cleaning of common areas and the cost of managing the building.

-         To comply with conditions on the use and occupation of the flat, for example to keep the flat in good order, to behave in a neighbourly manner and to seek the landlords consent to make alterations and sub-let.

What other rights does a leaseholder have?

Information - the landlord must provide his name and address within the UK.  This information must be provided on the service charge demand.

Consultation on major works - the landlord must first consult with leaseholders before carrying out major works, if s/he fails to do so s/he may not be able to recover all of the costs.

Extending the lease - an individual leaseholder who satisfies certain conditions can demand a new lease from the freeholder with the price being agreed between the two parties or set by the Leasehold Valuation Tribunal (LVT).

Buying the freehold - groups of leaseholders who satisfy certain conditions can purchase the freehold of the building.  The price will be agreed between the two parties or set by the LVT.

Right of first refusal - if the freeholder proposes to sell the freehold of the building s/he must first offer it to the leaseholders.  Failure to do so can lead to prosecution.

Appointing a manager - the leaseholders can apply to the LVT to appoint a new manager if they are not satisfied with the standard of management.

Challenging service charges - leaseholders can apply to the LVT to ensure that service charges are reasonable.

What are reserve funds?

Many leases allow the landlord to collect sums in advance to ensure that enough money is available for future major repairs.  The lease will set out the terms and conditions of any payment, including the amount of money involved and the reasons for the contribution.