A Please forget what you think you know, and abandon your rationalisations preconceptions and expectations; “Leasehold Law” has it’s own set. The lease is a contract and it is it’s terms that are relevant, not what you want them to be, nor insisting that they should be like your phone contract or electricity bill.
B I will explain, using words and diagrams,
1 What freeholds and leaseholds are and why we have them, what is included, excluded, and typical block set ups.
2 A glossary of terms and common points of confusion and myths.
3 Estate Agents and how useless they are on leaseholds and why you need to find out yourself as early as possible. Suggestions on the ill treatment of Estate Agents should not be followed as the lawyers say no, no matter how much they might deserve it.
4 How to break down the lease for yourself and find out what you are in for.
In simple terms, the freeholder owns the land and the block, the bricks and mortar, (or these days the factory manufactured modular units)
Freehold was formatted as ownership from the top of the sky to the centre of the earth (yes, planes cranes some mineral rights and the communal plumbing are sort of exceptions, so no charging for them, please). Most flats cannot meet that definition as other flats are in the way.
So, back in the day when knights were bold, they often had others look after their fields and castles where the peasants were particularly smelly or men in tights lurked in woods to rob from the rich, and well you know the rest, and tenancies were created.
They were of varying length and rent was paid in groats, sheep or young ladies of certain virtue. A quick trip in a Tardis and tenancies were being applied to houses and, in due course, flats, to get round the “top of the sky” bit*. Rather than pay rent, perhaps due to a shortage of ladies of certain virtue, these tenancies became longer and a premium was paid, a lump sum, along with a low annual rent. This is what we refer to as the purchase price and ground rent.
* Ok, this is not what the Law of Property Act 1925 said, but it comes out the same and this is far less boring an explanation.
In the late 70’s and early 80’s, as peasants were generally less smelly having jobs and indoor plumbing, and certain virtue, well, there was the summer of love and , well, ask your Granny, lenders became willing to lend mortgages on long leases generally, and from that, the concept of owning a leasehold property became “mainstream”.
These tenancies, being more than 21 years are referred to as leases, and are long fixed term contracts with rights and obligations to
• own, borrow on, sell, use and occupy the flat
• obligations to and from the freeholder, and, by extension, the neighbours, on looking after the flats, the block, and paying for that
• not to keep chickens or behave immorally ( lawyers still believe in virtue)
While early attempts do have flats looking after the exterior nearest their flat, it became a bit silly if the top floor flat didn't look after the roof, or the ground floor didn't mind the subsidence or wet rot, and therefore freeholders, generally, had to look after the exterior and structure, lest it all fall apart.
That’s why you need do to have leases-its contract that says who does what in return for what, something to borrow against, and roll and beat stupid estate agents with, as they wouldn't recognise a lease before or after you bet them with it, for preferring to make up an answer, than find out.
1.1 What Do I Own?
In most cases
a: a lease of the flat and in some cases, other areas e.g. parking
and, sometimes,
b: an interest in the freehold with other flat owners, or the company that owns it or
c: a company that is responsible for looking after the building
n.b. do not confuse b & c with a managing agent.
n.b. If you think “oh, share of freehold” at this point, I will throw furniture at you.
1.2 Whats included?
In most cases your flat is an eggshell, ending at the plaster and you pay toward the exterior common parts and structure in service charges. Do check on
- if you want to alter external doors, windows, walls and layouts, they may not be yours to alter or need consent, its not “ just structural stuff” - every lease varies
- just because there is a patio or loft space or roof outside your bedroom window doesn’t mean that you can use it or convert it
- terms that limit subletting or taking in a lodger
- don’t assume that because there is space, that you can park your second car
Some leases, often in “one up, one down” blocks do make you responsible for a portion of the exterior and these need to be carefully examined by your solicitor.
Section 4 will go into more detail later.
1.3. So What about the rest of the Building?
While there is always a freeholder, things can be a little more complex.
Typical Flat and Block Ownership Set Ups
Simples
1 Freeholder(Block) -----------Leaseholder(flat etc)
2 Freeholder(Block)------------Headlease(Block)-----------Leaseholder(flat etc)
Blocks With A Party to the Lease Manager or Residents Management Company
3 Freeholder(Block) ----- PTTLM/RMC ------Leaseholder(flat)
4 Freeholder(Block)-------Headlease(Block)----PTTLM/RMC-------Leaseholder(flat etc)
Blocks With A Right To Manage Company
5 Freeholder(Block) ----- RTM ------Leaseholder(flat)
6 Freeholder(Block)-------Headlease(Block)----RTM-------Leaseholder(flat etc)
n.b.the freeholder, headlessor, PTTLM, RMC or RTM, can employ a managing agent, not to be confused with management company
n.b. you will see there is no share of freehold as there is no such thing. No, sshh, there isn’t.
The trick is working out what is what & who is who; walk this way.
B I will explain, using words and diagrams,
1 What freeholds and leaseholds are and why we have them, what is included, excluded, and typical block set ups.
2 A glossary of terms and common points of confusion and myths.
3 Estate Agents and how useless they are on leaseholds and why you need to find out yourself as early as possible. Suggestions on the ill treatment of Estate Agents should not be followed as the lawyers say no, no matter how much they might deserve it.
4 How to break down the lease for yourself and find out what you are in for.
Cup Tea - Settle In, We Might Be a While.
………………………………………………………………………………………….
1 Don’t Panic! I will explain………………………………………………………………………………………….
In simple terms, the freeholder owns the land and the block, the bricks and mortar, (or these days the factory manufactured modular units)
Freehold was formatted as ownership from the top of the sky to the centre of the earth (yes, planes cranes some mineral rights and the communal plumbing are sort of exceptions, so no charging for them, please). Most flats cannot meet that definition as other flats are in the way.
So, back in the day when knights were bold, they often had others look after their fields and castles where the peasants were particularly smelly or men in tights lurked in woods to rob from the rich, and well you know the rest, and tenancies were created.
They were of varying length and rent was paid in groats, sheep or young ladies of certain virtue. A quick trip in a Tardis and tenancies were being applied to houses and, in due course, flats, to get round the “top of the sky” bit*. Rather than pay rent, perhaps due to a shortage of ladies of certain virtue, these tenancies became longer and a premium was paid, a lump sum, along with a low annual rent. This is what we refer to as the purchase price and ground rent.
* Ok, this is not what the Law of Property Act 1925 said, but it comes out the same and this is far less boring an explanation.
In the late 70’s and early 80’s, as peasants were generally less smelly having jobs and indoor plumbing, and certain virtue, well, there was the summer of love and , well, ask your Granny, lenders became willing to lend mortgages on long leases generally, and from that, the concept of owning a leasehold property became “mainstream”.
These tenancies, being more than 21 years are referred to as leases, and are long fixed term contracts with rights and obligations to
• own, borrow on, sell, use and occupy the flat
• obligations to and from the freeholder, and, by extension, the neighbours, on looking after the flats, the block, and paying for that
• not to keep chickens or behave immorally ( lawyers still believe in virtue)
While early attempts do have flats looking after the exterior nearest their flat, it became a bit silly if the top floor flat didn't look after the roof, or the ground floor didn't mind the subsidence or wet rot, and therefore freeholders, generally, had to look after the exterior and structure, lest it all fall apart.
That’s why you need do to have leases-its contract that says who does what in return for what, something to borrow against, and roll and beat stupid estate agents with, as they wouldn't recognise a lease before or after you bet them with it, for preferring to make up an answer, than find out.
1.1 What Do I Own?
In most cases
a: a lease of the flat and in some cases, other areas e.g. parking
and, sometimes,
b: an interest in the freehold with other flat owners, or the company that owns it or
c: a company that is responsible for looking after the building
n.b. do not confuse b & c with a managing agent.
n.b. If you think “oh, share of freehold” at this point, I will throw furniture at you.
1.2 Whats included?
In most cases your flat is an eggshell, ending at the plaster and you pay toward the exterior common parts and structure in service charges. Do check on
- if you want to alter external doors, windows, walls and layouts, they may not be yours to alter or need consent, its not “ just structural stuff” - every lease varies
- just because there is a patio or loft space or roof outside your bedroom window doesn’t mean that you can use it or convert it
- terms that limit subletting or taking in a lodger
- don’t assume that because there is space, that you can park your second car
Some leases, often in “one up, one down” blocks do make you responsible for a portion of the exterior and these need to be carefully examined by your solicitor.
Section 4 will go into more detail later.
1.3. So What about the rest of the Building?
While there is always a freeholder, things can be a little more complex.
Typical Flat and Block Ownership Set Ups
Simples
1 Freeholder(Block) -----------Leaseholder(flat etc)
2 Freeholder(Block)------------Headlease(Block)-----------Leaseholder(flat etc)
Blocks With A Party to the Lease Manager or Residents Management Company
3 Freeholder(Block) ----- PTTLM/RMC ------Leaseholder(flat)
4 Freeholder(Block)-------Headlease(Block)----PTTLM/RMC-------Leaseholder(flat etc)
Blocks With A Right To Manage Company
5 Freeholder(Block) ----- RTM ------Leaseholder(flat)
6 Freeholder(Block)-------Headlease(Block)----RTM-------Leaseholder(flat etc)
n.b.the freeholder, headlessor, PTTLM, RMC or RTM, can employ a managing agent, not to be confused with management company
n.b. you will see there is no share of freehold as there is no such thing. No, sshh, there isn’t.
The trick is working out what is what & who is who; walk this way.
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