- What does leasehold mean?
- What is a lease?
- What are my contractual rights?
- What are my responsibilities?
- What are service charges?
- Buildings Insurance
- What repairs and improvement works could be included in my service charge?
- Major Works and Consultations
- What other charges are included in my service charge?
Leasehold ownership is simply a long tenancy, the right to occupation and use of the flat or maisonette for a long period, i.e. the 'term' of the lease. The term of the lease is usually for 125 years and is fixed at the beginning and will decrease in length year by year. The flat or maisonette can be bought and sold during the term.
When you purchase a flat or maisonette you are buying the right to occupy part of a larger building. The ownership of the flat or maisonette relates to everything within the four walls, including floorboards, plaster to walls and ceilings, but does not usually include the external or structural walls, loft and roof. The structure and common parts of the building and the land it stands on are owned by the Council, who is responsible for its maintenance and repair.
A lease is a contract between the leaseholder and the Council giving conditional ownership for a fixed period of time, i.e. the term.
The lease sets out the contractual obligations of the two parties; what the leaseholder is contracted to do and what the landlord is bound to do.
Common terms used in the lease include:
Leaseholder or Lessee: The owner of the flat or maisonette
Lessor: The Council
Demised Premises: The internal shell of the flat or maisonette which you have brought
The right of occupation of the flat for the term of the lease. In addition, the leaseholder has the right to expect the Council to maintain and repair the building and manage the common areas - that is the parts of the building or grounds not specifically granted to the leaseholder but to which there are rights of access, for example, the entrance hall and stairs.
As a leaseholder, you must:
- Pay your annual ground rent (£10 per year)
- Pay the service charge
- Abide by the terms and conditions specified in the lease
- Not make any alterations to the property without first obtaining our agreement
- Inform us in writing within 1 month that the lease has been sold on
- Inform us of any change of name or address as soon as possible
- Keep your flat clean and in good repair
- Repay discount received under the Right to Buy, if selling within the first 5 years of the lease
- Not use the flat for a trade or business without our agreement
Service charges are payments by the leaseholder to the Council for all the services the Council provides. Service charges cover the owners share of the costs incurred by the Council in the managing, maintaining, repairing and improving of the structure and communal areas of the block to which the purchased dwelling forms a part.
Service charges can vary from year to year. They can go up or down without any limit other than they are reasonable. They will consist of administration costs; buildings insurance; communal lighting; garden maintenance (for maintaining any open plan garden areas that are exclusively for the benefit of the block); and repairs and maintenance.
Details of what can and cannot be charged by the Council and the proportion of the charge to be paid will be set out in the lease.
If you are struggling to pay your service charge, please contact the Council's Quality and Control team as soon as possible to discuss payment options.
The Council provides buildings insurance for the property, which is usually a block policy. A proportion of the premium for the policy is recharged to you as part of your service charge. You will need to organise your own contents insurance for items inside the property.
Day-to-day repairs may include for example, repairs to staircase lighting, refuse disposal systems and door entry systems. These are repairs that are not planned but are done when the Council is notified there is a problem. This type of work is called a 'responsive repair'.
If improvements are carried out to your building, you will have to contribute to their cost as part of your service charge. If the work is going to cost you more than £250, we must consult you first; if we do not, we can only charge you £250 for the work. You do not have the right to refuse to have the work done but you do have the right to nominate another contractor.
Occasionally more substantial work will need to be done to your block, such as major roof repairs, full window replacements etc. This type of work is call 'major works'.
The Council is required to consult you if we want to carry out major works on your property.
There are slightly different consultation methods depending on the type of arrangement we have with a contractor. Some contracts such as small scale cyclical works, services and specialist works below certain values are tendered in the traditional manner. In these cases consultation is carried out in 2 or 3 stages (the Section 20 Process).
Stage 1 is at the pre-tender stage, which is before a contractor has been appointed. This notice gives:
- a description of the proposed works
- reasons for carrying out the proposed works
- you a period of 30 days to send written observations on the proposals
- you the opportunity to nominate a contractor
Stage 2 is the tender stage. We send you a Notice of Estimate which:
- gives the name and address of the proposed contractor
- gives details of any connection between the landlord and the contractor
- includes an estimate of your contribution to the proposed works and the works to your building
- includes a summary of any observations received at Stage 1, with our response
- gives you a period of 30 days to send written observations on the proposals
Stage 3 is where the Council awards the contract. It is only needed if the contract is awarded to a contractor who did not give the lowest price and was not the one nominated by leaseholders. This can sometimes occur where there is a pre-existing framework agreement. We will write to you explaining our choice of contractor.
Programmes of work are reviewed regularly and are subject to change depending on priorities and finance.
This type of work will be invoiced separately to the annual service charge.
You will need to pay your annual ground rent fee of £10. The Council will send you an invoice automatically. You should ensure that any outstanding payments are settled before buying or selling a leasehold flat.