What is a Leaseholder?
A leaseholder is a person who owns their home but not the land on which it stands. Leaseholders’ rights are either statutory, in which case they apply to all leaseholders and apply even if they are not written into the lease, or contractual, in which case they should be written into the lease.
What is a Freeholder?
A freeholder owns the land on which your home sits on and has the right to collect ground rent and service charges from the leaseholder.
What is a Management Agent?
A management agent is a company who can deal with the management of the freehold on behalf of the freeholder. The lease may tell you if there is a management agent in place.
What is a Lease?
A lease is a binding contract that sets out the terms on which the landlord allows the leaseholder to occupy the property described within the lease. It also governs the relationship between landlord and leaseholder and sets out the rights and obligations of each. A lease is enforceable by law. The length of the lease can vary, but normally starts at either 99 years or 125 years. The time on the lease will reduce each year. It is possible to extend the length of the lease but this can be expensive. Legal advice should be sought if you wish to extend the lease.
A lease can be assigned (sold to someone else) at any time. You may be required to ask our permission to assign the lease and there may be restrictions on the registered leasehold title. Please check these documents before advertising your home for sale and contact us for clarification.
Rights and Responsibilities
Every lease is different. It is important to fully read and understand your lease. The rights and responsibilities of the lease should be explained to you when you buy the leasehold property by your solicitor/convenyancer. For example the lease should outline:
- The amount of ground rent payable by you and when
- Repair responsibilities of all parties
- Whether you need permission to make improvements/alterations
- How service charges are calculated and charged
You have a right to remain in your home as long as you keep to the terms and conditions of the lease.
The freeholder has to, by law, consult with leaseholders about major works or improvements that are likely to cost more than £250 per leaseholder. Failure to do so will result in any excess amount above £250 payable by the freeholder. The freeholder has to, by law, consult with leaseholders when entering into long term contracts for the provisions of services which will cost more than £100 per leaseholder. There are circumstances where the responsibility to consult can be waived, such as emergency situations.
The service charges that may be charges to you could include:
- External repairs/maintenance to block and communal areas
- Ground maintenance
- Planned maintenance
- Insurance of the building
- Management costs
- Unadopted road
- Communal parking areas/landscaping
- Maintenance/repairs to communal rights of way/shared access
If you believe that the service charge is unreasonable then you have a right to refer it to the First-Tier Tribunal.
These are funds which can be collected from the leaseholder to allow sums of money to build up in order to pay for large or infrequent items of expenditure. For example roof replacement/refurbishment, lift replacements. The funds are collected as part of the service charges. Futures Housing Group does not propose to operate sinking funds. The costs for works will be charged when they arise with costs apportioned over the financial year.
Buying the Freehold
Leaseholders may be able to buy the freehold of the property.
The rules governing buying the freehold of a flat are very complex and we recommend that you take your own independent legal advice to see if you have this right. This process is known as leasehold enfranchisement.
You can apply to buy the freehold of your shared ownership house once you own a 100% share providing your house is not located within a rural area.
Shared ownership staircasing (buying a further share in your home)
Staircasing of shared ownership leasehold properties can take place at any time after the first 12 months of occupation of the original leaseholder.
If you decide to staircase the cost involved to value your home will be charge to you as the leaseholder. The valuation will be carried out by an independent RICS valuer. Any improvements you have made will be disregarded in the valuation.
If you wish to staircase you will need to place your request in writing to us.
The mortgage is between you and your mortgage lender. If you begin to experience financial difficulties you should let them know immediately, they may be able to help.
If you have trouble meeting your rent and service charge it is essential that you contact us to discuss what options are available.