Things to know before you buy
There are two main ways of owning a property in England and Wales: Freehold and Leasehold. Here, we explain some of the things you may need to know when buying a Leasehold property. Find below a download for a handy little guide, showing you what your rights are, what your responsibilities are and how to get help if things go wrong…Download how to lease July 2019 PDF
Freehold means that you own the land and the building that sits on it. This is usual for most houses but some houses may be Leasehold.
Leasehold means that you own the flat or house, but not the land that it sits on, for a given number of years (e.g. 99, 125 or 999 years) under an agreement or contract called a Lease which gives you the right to occupy and use the flat and share the use of other areas of the building or estate.
The Lease is the written agreement that gives you the right to live in and use the property. The same Lease is passed on every time the flat is sold, so the length of the Lease keeps reducing. You should be aware that if the length of Lease left is under 80 years, you will generally have to pay a premium to extend it, the amount of which will increase as the Lease reduces in the number of years left.
Your payment, which is usually in advance, of your share of all the costs of maintaining and insuring the building; the amounts will vary depending on the services provided. Extra service charge called Reserve Fund may be collected from you for large, but infrequent works (e.g. external decoration and replacement of the lift, boiler or roof). This enables the cost of major works to be spread over a number of years. N.B. Not all Leases’ have the option to collect a Reserve Fund.
It is important to know what the annual amount you have to pay will be as this will be an ongoing commitment every year. The amount can vary year to year based on what is spent on the building by the managing agent under the instruction of their Client.
Managing agent’s are appointed to arrange services, repairs, maintenance, improvement or insurance or to deal with any other aspect of the management and usually for a building divided into flats. This is usually on behalf of the Landlord of the building or may be by a Resident Management Company which gives the Leaseholder some control.
There are two main ways of owning a property in England and Wales: Freehold and Leasehold. Here, we explain some of the things you may need to know when buying a Leasehold property. Find below a download for a handy little guide, showing you what your rights are, what your responsibilities are and how to get help if things go wrong…Get in touch Sites we manage