Issues surrounding the ownership of leasehold properties are varied and complex.
There are many issues that will have bearing on the value and marketability of a leasehold property and it is important to do your research before buying a leasehold property to ensure you understand the extent of your commitment.
These are some of the questions ALEP recommends asking when researching potential leasehold properties:
- What is the lease length?
- What is the ground rent and how will it escalate in the future?
- What is the shortest lease your mortgage lender will allow? This can be 75-80 years, so if the current lease length of the property you are considering is close to this limit, you can probably use this as a point of negotiation with the vendor.
- What is the freeholder like?
- Who is responsible for the maintenance?
- If a managing agent looks after the property, what are their fees?
- What is the annual service charge and what does it include?
- Are there restrictions within the lease (relating to subletting, alterations or keeping of pets for example) and how do they sit with your intentions as to use of the property?
- Is there a head lease/intermediate interest or any other parties associated with the ownership of the property?
Most importantly, ALEP always recommends speaking to an expert in residential leasehold property as they will have the expertise and experience to deal with any number of issues. Many ALEP members will be happy to explain the options available during an initial telephone conversation.
What is involved in going to the First-tier Tribunal? What are the likely costs and do I need professional help? What do leaseholders need to do to try to resolve a dispute before going to a tribunal?
Going to Tribunal will involve issuing an application, the forms for which can be downloaded from the Tribunal website. You will need to pay a fee to issue and a fee for any hearing, but otherwise the Tribunal does not order payment of costs against you (save in exceptional circumstances) – whether you win or lose. Note the Tribunal is entirely different in Wales, and is called the Leasehold Valuation Tribunal.
Plainly the Tribunal has jurisdiction to deal with a wide range of matters. But the two most important are:
- Leasehold Management issues. Most service charge and management disputes are dealt with without one or both parties having legal representation – although it is obviously better to have legal representation if you can. You will normally have to put your arguments in writing and produce relevant documentation such as the lease, the service charge accounts, demands for payment, receipts for relevant expenditure and any statutory notices given by the landlord to the leaseholders. There may be a hearing although smaller matters can be dealt with on paper. About 70% of applications lead to a determination one way or another.
- Enfranchisement. This is much more complicated, and you will need at least a specialist enfranchisement valuer and a solicitor, even if the matters settles (which c.95% of such disputes do). This is where ALEP comes in.
What to do before applying? Try to discuss the issues and reach agreement. Gather documents and papers and look at them logically. Take advice from a solicitor (management) or a valuer (enfranchisement).
Advice from Chris Last of Leasehold Law.
ALEP, the Association of Leasehold Enfranchisement Practitioners, represents trusted and vetted professionals experienced in the residential leasehold sector.
To locate a vetted professional, visit ALEP at www.alep.org.uk.
