Understanding leasehold!

ahfat41

Anybody understand the jargon on leasehold?  I am out of my dept approx 20 pages and do not really understand the meaning.  What does this means to assign or underlet for more than six months.  Does this means I will not be able to rent the flat for more than six months?  Also specifying inside flat what should be painted and internal and external windows to be cleaned every two months?  Not to have pet or put window flowers outside.  Every year an invoice will be sent by the accountant for any expenses the landlord might have occured during that year. No specific sum mentioned.  It is managed by a company that will be expensive.So many restrictions like being in rental.  Are they the norm?  Pl can somebody tell me what are thet important parts I should be reading and understand.  I do not want to pay £800 for a building survey and instruct a solicitor then find I am not happy with the lease.  Thanks

csgohan4

A solicitor is one who hopefully will explain the lease jargon for you, but seems alot of restrictions, especially the renting part if that bothers you.

Is it a flat ? any cladding?

canaldumidi

Yes it's normal though different leases have different terms.

Without seeing the exact wording it's hard to comment!

Regarding the expenses, yes, the freeholder (or his management company) will maintain the building and the cost will be split between all the leaseholders (flatowners). Naturally the amount will vary each year dependng what work is required and whether costs increase (eg electricity bill for the shared hall/stairway etc). Often you get an estimated bill at the start of the year (payed every 3 or 6 months), and then at the end of the year when the actual cost is known you get a refund or extra bill.

ahfat41

Service 20% for the flat.  Very expensive ground rent double up. I guess it will be more expensive since it is managed by a company.

user1977

The costs depend on what needs to be spent from time to time. If the lease is for 100 years, say, of course it's not going to tell you how much the repairs in 30 years' time are going to cost. In the same way that if you buy a house, you can't be sure what the maintenance costs are going to be. 

bouicca21

ahfat41 said:

Service 20% for the flat.  Very expensive ground rent double up. I guess it will be more expensive since it is managed by a company.

Being managed by a company is not necessarily an indicator of high expense.  The vendor should be able to show you what sort of charges have been made in the past.  Think about how you want to live - for example, is a no pets clause a big deal?  

I’d be rather more worried about ‘very expensive ground rent double up’.  What is the ground rent?  How often does it double?  Is it capped?  Is the flat in London?

And just as important, how long is the lease?

eddddy

From the snippets you mention, it sounds like a fairly standard lease.

You're viewing things in a rather one-sided way.

It sounds like there are 5 flats 'sharing' the building. You could say that the lease is specifying some rules for everyone to follow, to make life pleasant for everyone living in those flats.

So you could look at it this way...

• it's good that nobody in the building can keep pets, so I won't be disturbed by barking dogs
• it's good that everybody has to clean their windows, so the building I live in will be tidy and smart
• it's good that people have to keep their flats painted, because it generally keeps standards up and the block looking smart

And the building you live in needs to be maintained and repaired (e.g. if the roof leaks, the communal front door breaks, the outside needs painting.)

So the freeholder/landlord (or their management company) will do all those maintenance and repair jobs - each flat owner will contribute 20% of those costs.


(Obviously, if you bought a house instead, you'd have to pay 100% of the maintenance and repair costs of the building.)

NameUnavailable

A lot of leases will have some clause about not being able to sublet, without permission from the freeholder. Some will exclude subletting altogether.

Maintenance costs are charged per year and shared between the leaseholders. The costs can vary enormously depending on work required, that's why you can read posts from people who have suddenly been given a bill for £80K for necessary works. Normally you pay for building insurance, upkeep of any communal areas, energy bills for communal areas and minor maintenance during the year. Anything else will be charged additionally and often require a formal notice of intended works.

Most leases exclude pets 'that cause annoyance' - not a problem unless someone complains about a barking dog or a cat that fouls in the communal hallway.

Ground rent is a big problem if it exceeds £250 outside of London or £1000 in London (including if it is likely to increase to those levels under the terms of the lease).

Thenn you have lease length to consider - less than 90 years is going to be an issue as you will almost certainly need to extend when you come to sell on again.

Good luck!