The truth about leasehold property

With leasehold complaints and leasehold cases on the increase, pressure

has been put on the government to impose greater regulation on the

leasehold sector, which is making two and a half billion pounds a year

in service charges for maintenance and repairs. The question remains

why is this not more regulated?

 

Here are a few points that must be considered

before buying a leasehold property.

 

1:Request a copy of the lease from the agent. A lease is a contract

between the leaseholder and the landlord, giving conditional ownership

for a fixed period of time. Good agents should hold one and here you can

read your contractual rights. These rights will normally entitle you to

expect the landlord to maintain and repair the building and manage the

common parts such as grounds, staircases and hallways.

 

2:Secondly, check how many years are remaining on the lease. It is

harder to get a mortgage on a flat with a lease with 75 years remaining

or below. If it doesn't have many years left, then find out how much

it will be to purchase more years before buying. The cost of a lease

extension can be a reason for a lower offer on the flat and a good

way to negotiate on price.

 

3:You should look closely at service charges which are payable by the

leaseholder to the landlord for all the services they provide, including

maintenance and repairs. Service charges usually also include the costs

of management, either by the landlord or by a professional managing

agent. Ask to see a copy of the service charge statement from last year

to get a feel of the costs. Details of what can and cannot be charged by

the landlord and the proportion of the charge to be paid by the individual

leaseholder are all set out in the lease, read it very carefully. Ask to see

the end of year annual accounts. Look at what is being spent on the

building and what you are getting for your yearly service charge. Is

there a reserve fund to deal with major works if required in the future,

if so how much? Is there a condition survey on the building? What is

the current insurance premium?

 

4:Look at the current appointed managing agent. Are they members

of ARMA? Are their property managers IRPM registered? Ask other

residents who live in the building what their experience has been with

the managing agent, are they responsive to calls? Do they provide you

with transparency on accounts? If you have a maintenance issue will it

be dealt with promptly? The key thing is do your homework. The more

informed you are prior to purchasing the more you will know your rights

as a leaseholder and be able to make an informed decision. Providing

you have a well written lease, a good managing agent and you fully

understand the lease's terms along with your rights and obligations

a leasehold property can make a great home or investment.

 

Call Vision Today for free no obligation advice.

Posted on Monday, October 21, 2013.