Leasehold Properties

Your rights as a leaseholder

As a leaseholder, you have the right to enjoy your property quietly without unreasonable interference from the freeholder.

Leaseholders also have the following rights:

• Property maintenance. The freeholder must carry out maintenance and repairs as specified in the lease agreement. Some leaseholders have a ‘self-repairing’ lease which means they are responsible for maintaining the interior of their property.
• Information. If requested, the freeholder must provide the leaseholder with a breakdown of the service charge and any invoices. The name and address of the freeholder must be printed on every document and bill they send to the leaseholder. Demands for service charge payments must also be accompanied by a summary of the leaseholder’s rights and obligations – this is set out in the Commonhold and Leasehold Reform Act 2002.
• Consultation. The freeholder must consult the leaseholder if they plan to carry out any building work which will cost the leaseholder more than £250. If they fail to do so, they cannot recover their costs over that amount.
• Protection from unreasonable charges. If the leaseholder thinks the service charge or any other fees the freeholder has demanded are unreasonable, they can apply to the First Tier Tribunal (Property Chamber) or resolve the issue through mediation.
• First refusal. If the freeholder plans to sell the freehold, then they must offer to sell it to the leaseholder first. This is a legal requirement with some exceptions.
• Right to manage (RTM). If a group of fellow leaseholders who meet certain conditions want to take over management of the property from the freeholder, they can do so by exercising this right under the Commonhold and Leasehold Reform Act 2002.
• Right to change a lease. If both the freeholder and the leaseholder agree, changes can be made to a lease agreement at any time. Where the freeholder and leaseholder do not agree, the matter can be taken to a tribunal or resolved through mediation.
• Right to complain. Anyone managing a property, with some exceptions, must belong to a government approved ‘redress’ scheme. If a leaseholder believes their property is not being well managed, they can apply to their landlord’s redress scheme.

Types of leasehold enfranchisement

Under the Leasehold Reform Act (1993), leasehold enfranchisement gives a group of leaseholders two rights:

• The right to purchase the freehold from the landlord.
• The right to extend their lease up to 999 years with no ground rent payable.

To be able to exercise their right to enfranchisement, leaseholders must satisfy a set of conditions. For example, leaseholders must own two or more flats in the building, and at least 50% of the leaseholders in the building must be happy to participate in the enfranchisement.

Buying the freehold gives leaseholders full ownership of their property. Once they own the freehold, there is no ground rent to pay, and they can choose the best service providers to maintain common areas. They are also no longer subject to restrictions imposed by the landlord (such as ‘no pets’).

The disadvantage of purchasing the freehold is that the leaseholders must work together to manage their own building. Sometimes it can be hard to reach an agreement, particularly if many people are involved in decision making.

An Enfranchisement Participation Agreement drawn up by a solicitor can help to make sure leaseholders work effectively together to manage their building. An agreement will include aspects such as a commitment that each leaseholder will meet certain costs and when those costs must be met. Financial and practical issues will be addressed from the beginning, which fosters cooperation and helps to prevent disagreements from arising.

Talk to a leasehold property solicitor

At Davisons, we advise on all the legal aspects of leasehold properties. Whether you are planning to buy or sell a leasehold or you wish to purchase the freehold from your landlord, we can help. We can also advise you on your rights and help if you are experiencing difficulties with a current leasehold property.