LIBRARY


15 things a leaseholder should know

⦁ Legislation

There are 85 pieces of legislation which affect leaseholders

⦁ You don’t actually own your property

It may sound surprising but as a matter of law you don’t own your flat. You have purchased a contract called a Lease which entitles you to own your flat for the length of time stated in that Lease. When that length of time expires your Lease will revert to the owner of the building of which your property forms part. It is estimated there are 3 million leasehold properties in the UK

⦁ You can extend your Lease

The law provides leasehold property owners the right to extend their Lease for a fee for a fixed period of time

⦁ You have to pay service charges

The Lease will contain a provision regarding the payment of service charges, and when they should be paid. The service charge represents your contribution towards the cost of maintaining the shared parts of your building such as the fabric of the building (windows, roofs etc) gardens, pathways, car parks, stairwells and hallways. This is usually paid to a managing agent who acts on behalf of the management company (the body set up to manage the building) or the freeholder. A service charge demand, ground rent demand and administration charge demand by law, must be made in writing and include a Summary of Rights and Obligations. If your managing agent does not include the Summary you can withhold the payment

⦁ You may have to pay ground rent

Your Lease usually states a yearly ground rent to be paid to the freeholder. This is entirely separate to the service charges

⦁ You can change your managing agent by exercising your right to manage (“RTM”)

The leaseholders do not have to allow the value of their property to be affected due to poor maintenance. If a majority of flat owners (more than 50%) are unhappy with the way the building is maintained it is possible to change the managing agent. This is called exercising your right to manage (refer to document RTM v RTA for further information)

⦁ It is possible to vary the terms of your Lease

Leases can be difficult to interpret, and as the law changes over time the original Lease is no longer fit for purpose. If that happens it is possible to vary the terms of the Lease

⦁ Residents associations (management companies)

These are formed as limited companies and the articles of association will require one or more leasehold owners to run the company as directors. This is an unpaid voluntary position. The directors are personally liable for acts or omissions but the risk can be protected by directors’ and officers’ insurance (refer to document Duties of a Director)

⦁ Insurance

The freeholder is responsible for arranging buildings insurance NOT contents insurance. The Lease will contain an obligation on the part of the freeholder to arrange buildings insurance which will be paid for via the service charge

⦁ Major works

Under Section 20 of the Landlord and Tenant Act 1985 any work to the building that will cost any one leaseholder more than £250 the freeholder (management company) must consult with each flat owner. The leaseholders can nominate their own contractors. Estimates will be received, due diligence undertaking regarding appropriate qualifications and health and safety matters, an a decision as to who will carry out the works will be made

⦁ You can buy the freehold of the building

If more than 50% of the leaseholders agree, they can approach their freeholder with an offer to purchase the freehold of the building

⦁ Administration costs

The managing agent can make additional reasonable charges for providing information about a property. When choosing a managing agent you should look at these charges as they will affect you and a buyer in the future. Often the managing agent subsidises their management charges from these administration costs (refer to additional charges document)

⦁ Reserve fund

It is usual for a leaseholder to be asked to contribute towards future maintenance of the building but you may not see the benefit during your ownership

⦁ Breaching the terms of your lease

If a leaseholder does not comply with the terms of the lease the freeholder can bring the lease to an end by forfeiture

⦁ Noise

One of the most frequent complaints received by a managing agent is due to noise. Whilst the managing agent can remind leaseholders about the terms of the Lease, it does not fall upon the managing agent to resolve the problem and should be referred directly to the local authority (refer to our guide for being a good neighbour document)

A guide to being a good neighbour

Remember: If you can hear your neighbours they can hear you!

Noise is part of everyday life but excessive and inappropriate noise may be a source of annoyance. It is an offence to emit noise from premises which is a nuisance or which may affect a person’s mental or physical health. The most common sources of inappropriate noise are music, voices, children playing, dogs barking, DIY, banging doors and vehicles. It may not necessarily be the volume but the time, place and duration of the noise, eg music or shouting is more likely to cause a disturbance in the evening or at night. A noise that lasts a long time may be more of a problem than one of greater volume that is only short lived, eg short bursts of a loud drill are more acceptable than a prolonged muffled beat.

There are no time restraints or decibel limits by law for neighbourhood noise and therefore common sense guidelines are issued by local authorities. This guidance should help to avoid nuisance without further referral to the local authority’s environmental protection team.

Complaints are more likely from the occupants of flats. If your lifestyle results in you keeping unusual hours then you that must take extra care.

Avoiding excessive or inappropriate noise:-

Music and TV

  • Consider the time of day but still be aware that noise can cause problems at all times
  • Consider closing windows and doors
  • Avoid locating speakers and televisions on a party wall. Try to keep televisions and speakers off the floor
  • If possible use headphones
  • If you play a musical instrument only do so for short periods during the day and tell your neighbours

Parties

  • Notify nearby residents and the local authority environmental protection in advance
  • Start and finish at a reasonable time. Please contact your local authority to check what this should be
  • Keep volume and bass levels down
  • Ask your guests to leave quietly

DIY

  • Do not carry out noisy DIY before 9am or after 7pm
  • Warn neighbours if you think the work will be particularly noisy

Dogs

  • Do not allow your dog to become distressed which may lead to barking and whimpering
  • If you have concerns contact the local authority animal wardens

Domestic appliances

Try not to use vacuum cleaners, washing machines or other domestic appliances before 8am or after 9pm

Floors

Try not to walk heavily

Doors and windows

Ensure they open smoothly without sticking and banging, try to close them without unnecessary force

Cars and motorbikes

Avoid excessive revving of engines particularly early in the morning and late at night and avoid unnecessary acceleration. It is an offence to sound the horn between 11.30 pm and 7.00 am

“For further advice click here

“Leaseholder help guides click here

“RICS Code of Practice click here