Leasehold properties operate under an agreement between the leaseholder and the freeholder: leaseholders own their property for a set period while the freeholder owns the building itself and is responsible for maintaining communal areas.
This agreement is laid out within the lease as well as being supported by UK law.
If either chooses to neglect their maintenance or cleaning responsibilities, then serious legal consequences may follow. Here we will be explaining the perils that both parties should be aware of.
Consequences for Freeholders
Freeholders have a legal duty to actively maintain and repair the structure of the building. This includes the common areas within the building such as hallways, foyers and any shared spaces as well as the exterior of the building and any grounds.
If a freeholder (or their appointed managing agent) fails to keep up with the required level of maintenance and cleanliness, leaseholders can take legal action:
- Breach of Lease
If the level of neglect breaches the terms of a leaseholder’s lease, they can take their freeholder to court or to a tribunal. This may result in the leaseholder being released from their contract early.
- Service Charge Dispute
Leaseholders pay a service charge – a contribution to the general upkeep of the property. For many these charges are a significant amount of money and as such, leaseholders expect that the money is well spent on their behalf.
If leaseholders feel that their service charges are being wasted, they can raise a dispute to challenge them. They can take their concerns to the First-tier Tribunal (Property Chamber) who can order the freeholder to refund part of the service charge if they are found to be in breach of their responsibilities.
- Legal Orders for Repairs
If repairs are not carried out in a timely manner Under Section 20 of the Landlord and Tenant Act 1985, leaseholders can request a court order to force the freeholder’s hand.
The court can set a deadline for the repairs to be completed or even appoint someone else to manage the property if the freeholder is a repeat offender.
- Health and Safety Breaches
A lack of maintenance can easily lead to safety hazards. Freeholders can be prosecuted under health and safety laws for any breaches and face hefty fines if found guilty. If neglect leads to an injury or death freeholders can also face imprisonment.
These breaches can be simple; blocked fire exits or damaged wiring, uneven paving slabs or a fallen tree. Proactive maintenance helps to avoid these basic issues and nip problems in the bud before they cause an injury.
Consequences for Leaseholders
It is easy to think that only freeholders could fall into hot water when it comes to maintenance and cleanliness, but leaseholders have their own responsibilities to consider.
Leaseholders are expected to maintain and clean the interior of their flat or apartment as well as any areas exclusively accessed by them such as balconies. It is worth double checking your lease because in some cases leaseholders are also expected to contribute to the upkeep of communal areas.
- Breach of Lease
Contracts work both ways, and just as leaseholders can take their freeholders to court for breach of lease, freeholders may do the same. If a freeholder believes a leaseholder is not maintaining their unit to the standard they should be, they can take legal action.
In extreme cases, the lease could be forfeited which would effectively result in eviction for the leaseholder.
- Service Charge Increase
Freeholders have the right to ensure that their property is being well maintained. If they have to step in to handle necessary repairs inside a leaseholder’s unit, the costs can be passed to the leaseholder via their service charge.
- Property Value
Poor maintenance by either party can result in a reduction in curb appeal and overall property value. We are placing this one under the leaseholder’s section as it may not occur to leaseholder that their inaction could have a direct impact on their own sizeable investment.
Resolving Disputes
At the outset, the aim should always be to resolve maintenance or cleanliness issues amicably. The first step should be to open a dialogue – there may be a reason behind someone’s neglectful actions that can be remedied.
If talks break down, mediation is a good route to take. This is where a professional third party will manage any exchanges and help bring the dispute to a mutually beneficial conclusion.
Where mediation fails, the First-tier Tribunal will be the next port of call. They can step in to resolve disputes over service charges and maintenance responsibilities, bringing legal and financial consequences where necessary.
Conclusion
For property owners, neglectful maintenance can lead to serious legal consequences as well as causing unnecessary health and safety risks for residents.
Freeholders may face legal orders and financial penalties, while leaseholders could experience increased costs or in severe cases, even lose their property. Maintaining properties appropriately, understanding the requirements of your lease and respecting the UK law are essential to avoiding these outcomes.
When issues arise, clear communication and a calm approach are vital to reaching a conclusion that suits all parties and avoids these legal and financial pitfalls.
