Leasehold properties in the UK
In this article, we will discuss “Leasehold properties in the UK explained”
Leaseholder properties in the UK can only be owned for a fixed period of time. This is often the case with flats or houses in shared ownership. The leaseholder will have a legal agreement, or a lease, with the landlord, otherwise known as the “freeholder”.
This could go on for a number of years but it’s a set amount of time and when the lease of property comes to an end and the freeholder will regain ownership. In certain cases, there could also be issues with an absentee freeholder. This is when the freeholder isn’t around for various reasons and doesn’t have involvement with the property anymore.
Here is a quick overview of “Leasehold properties in the UK explained”
How do leasehold properties work in the UK?
In the UK, a leasehold property is where the leaseholder only owns it for an agreed period and the freeholder is the one that owns the land it’s built on. The leaseholder and freeholder must come to an agreement and terms and conditions are arranged in the contract. This includes the time of the lease. Leaseholds are common especially with flats or maisonettes that exist within a common building. Leases tend to be for a number of years and often at least seventy to ninety years, but leaseholders can buy, sell, extend, or terminate their lease at any time.
What rights do leaseholders have in the UK?
The freeholder will be in charge of insurance for the leasehold property but leaseholders are entitled to get any information about this. Under a lease, the leaseholder will also need to pay service charges to the freeholder. These service charges will normally cover things like repairs, maintenance, or any necessary improvements to the building itself or any communal areas. Leaseholders have the right to find out about these service charges and what they’re used for at all times.
Leaseholders also have the right to know the freeholder’s name and address, and this can cause some issues with an absentee freeholder. The reason for this is that the leaseholders will often need information about any changes to the lease or property, or legal issues. Leaseholders have the right to be consulted about certain maintenance and running costs as well, and without a freeholder present, this can be problematic.
Is the freeholder responsible for maintaining the property?
The responsibilities leaseholders have depended on the conditions they agreed to in the lease. If you want to make alterations or improvements to the property yourself, you may need permission from the freeholder. The costs of maintenance also need to be discussed before in the contract and how much the leaseholders will be expected to pay.
In general, most leases state that the leaseholder is responsible for maintaining and repairing at least the inside of the home. This can include various repairs such as any decorating, including the flooring and walls like floorboards and plasterboards, all furniture and appliances, internal electrics, and plumbing. The freeholder, on the other hand, is responsible for external maintenance such as structural repairs to the roof and guttering, and communal areas including stairs and lifts, particularly in blocks of flats.
In many cases, there will also be an agreed reserve or sinking fund to cover unexpected maintenance and avoid disputes. Any service charges or sinking funds will be shared between leaseholders and this is often the case with blocks of flats. Building insurance is also paid within the service charges.
Is it possible to buy the leasehold property?
It is possible for leaseholders to buy the property outright from the freeholder. This depends on the type of property, it’s less complicated with a house than a flat, for example. In the case that the freeholder wants to sell the property, they are required by law to offer it to the leaseholders first, and if they don’t want to buy it they are free to sell it to a third party.
Leaseholders are also able to extend or terminate their lease but this needs to be agreed by the freeholder. If a landlord wants to end a lease they will have to go through official proceedings with the court’s permission.
What happens when there are leasehold disputes?
There are two main ways leasehold disputes can be resolved. One is by using a mediation service and the other is to go directly to a tribunal. Leaseholders can be involved in disputes with the freeholder for a number of reasons relating to service charges, changes to the lease, building insurance, and other financial issues. These can be difficult to resolve with an absentee freeholder and often they will then need to be tracked down.
What are absentee freeholders exactly?
An absentee freeholder is a landlord that is simply not present and this could be due to various reasons. If the landlord never lived in the property, they might have moved to a new address or are possibly deceased. The freeholder might have even lost interest or forgotten about owning the property. Absentee freeholder issues can go on for a long time. They often occur when houses have been converted into flats and the flats have been sold on very long leases and the leaseholders might not consider the lack of involvement from the freeholder as an issue.
Unfortunately, if the freeholder isn’t around they won’t be able to carry out any legal obligations such as carrying out necessary repairs or insuring the building. They also won’t be able to resolve leaseholder disputes. This could result in the property falling into disrepair which could affect the later sale of the property or mortgages, and of course, practical implications for the leaseholder. It’s, therefore, necessary to investigate or locate an absentee freeholder.
At Find UK People, we offer freeholder tracing services on a no trace no fee basis. We are experts in locating absentee freeholders and provide a quick and effective low-cost freeholder tracing solution.
If you’re in urgent need of the address of an absentee freeholder, find out more today.
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