Leasehold Property

• What is Leasehold?

  When you purchase a leasehold interest you acquire the right to occupy a property, say an flat, apartment or maisonette, or in some cases a house, for a certain period of time as opposed to purchasing the physical structure of the building.

• What is a Lease?

  A lease is an important legal document filed at the Land Registry that sets out the terms and conditions under which a leaseholder has the right to occupy a property.

  The lease will also set out what each party to the lease (for instance the leaseholder, the freeholder, the leasehold property management company) may expect of each other, and what may happen if any party does not adhere to the terms and conditions.

Demised Premises/Property

• What you need to know

  This will give the address of the apartment, usually together with a note of the floors in the building on which the apartment is located. As the apartment will be only part of a building it will be drawn edged in red on the plan attached to the lease.

• What is Ground Rent?

  Ground Rent is a contractual amount payable to the owner of the land on which the property/properties is/are constructed.

  The Lease sets out how much rent is payable and when (it may be annually, half yearly or perhaps quarterly), and to whom (usually the owner of the land is sometimes referred to as the freeholder, the lessor, or possibly the landlord).

  Ground Rent is not the same as Service/Maintenance Charge, and is not related to the provision of services at a property, which are entirely separate.

What are Tenant's Covenants?

• What you need to know

  This part of a lease sets out the do’s and don’ts of being a long leasehold tenant. Generally the lease will say:

  • You must pay your yearly rent, also known as a Ground Rent.
  • You must pay service charge, a pre-defined percentage or reasonable share of the costs of the upkeep of the building, common parts and any of the communal areas and facilities of the Building of which the apartment forms part.
  • You must pay an insurance premium, this is the cost of building insurance for the property covering repair and rebuild costs in the event of damage.
  • You must pay all taxes, such as Council tax, and rates, such as water rates.
  • You must keep the inside of your flat including all pipes etc. used only for the benefit of your flat in good repair and properly cleaned. You should note that this includes you replacing broken glass or latches to the windows.
  • You must allow the Landlord/Lessor, and/or the Management Company its agents, other leaseholders, and workmen access to your flat to carry out repairs necessary to your or other flats or common parts in the Building.
  • You must use your flat only for residential purposes.
  • You may be required to tell the Landlord/Lessor, and/or the Management Company within a certain period if you sell or mortgage your apartment.
  • You must not cause a nuisance to your neighbours.
  • You may be required to pay the Landlord/Lessor, and/or the Management Company’s costs of issuing its consent or serving any notices
  • required by the lease.
  • You must not make any structural alterations or additions to your apartment or the Building without the Landlord/Lessor, and/or the Management Company’s consent.
  • You must not use your flat for an illegal or immoral purpose or for an auction sale.
  • You must not put up any external aerial or dish, or any sign which can be seen from the exterior.
  • You must have suitable coverings on the floors of your apartment to stop noise nuisance to your neighbours.
  • You agree with all the other leaseholders in the Building to comply with the obligations on you set out in this part of the lease.

What are Landlord's Covenants / Management Company Covenants?

• What you need to know

  This part of the lease sets out what the Landlord/Lessor, and/or the Management Company, must do as the landlord. Generally the lease will say that the lessor must:

  • Insure your apartment and the Building against loss or damage by fire and other risks (unless that responsibility is placed with the Management Company).
  • Repair damage to the apartment or the Building by risks that have been insured against.
  • Keep repaired, cleaned and maintained the structure of the Building. The structure usually includes the roof, the foundations, brickwork, balconies, communal doors, windows, stairways and entrance halls.
  • Keep repaired, cleaned, and maintained any communal heating and hot water systems, communal sewers, drains, gas and water pipes and electric cables, lifts, communal aerials, security systems, gardens and internal areas, together with any forecourts, footpaths and roadways.
  • enforce the agreements by other leaseholders in those leases at your request and cost.