A lease is an extremely important legal contract relating to the occupation and ownership of your home and sets out the legal relationship between you, the leaseholder and us, the landlord. When you sign the lease or take over an existing lease you are agreeing to certain responsibilities and so are we. The lease grants you a number of rights but also serious obligations which you need to understand when you buy your new home.
It is essential that you seek legal advice prior to signing the lease and make sure that your solicitor goes through each clause of the lease with you. Ask your solicitor to provide you with a copy of your lease when you purchase your property.
Main terms of a lease:
The main sections of a lease give you details on the following:
- A description and outline plan of the property, defining the boundaries and areas you are responsible for
- Definitions of your scheme and your block or building are important as if a service charge applies, it will be based on these
- Rent and/or service charges you must pay
- How and when the rent and service charges are reviewed
- Items that may be included with your service charges including the types of services that will be provided. These are also important as your service charges are also based on these
- The lease is likely to tell you what proportion of the service charges you will have to pay but may not indicate exactly what you will be paying for or how much
- The lease details whether or not you are required to contribute to a Sinking Fund and if so how this will be paid. Some leases allow for collection of the Sinking Fund contribution as part of the annual service charge calculation and in others, the sinking fund contribution is collected when the property is re-sold
- The length of the lease. If it is a new lease it may run for 99 or 125 years. If it is an assignable lease it will start from the date the first owner bought the property. If this took place 15 years ago and the lease is 99 years, there will be 84 years left of the lease
- The lease will give details of the full market value of the property and the amount you have to pay depending on the share you are purchasing. You can only purchase the percentage that is up for sale. This could range from 25% to 100% depending on how much is being sold and the age group the property has been built for. At most Leasehold Schemes for the Elderly the maximum equity share you can purchase is 70%
- Details of rights, such as rights to use shared areas
- Details of when and why staff can come into your home
- Information about maintaining the scheme, block or building and inside of your home
- The rights and responsibilities of the landlord
- Your rights and responsibilities as the leaseholder
- The rights to end the lease in certain circumstances
- Rent. You are likely to have to pay a monthly rent if your share is 25% or 50% (and possibly 75% if the property is for general sale and not specifically for the elderly). The lease will indicate if you need to pay rent and your solicitor will confirm the amount, payment method etc. We will also provide you with this information.
- Information about ground rent. This varies from property to property. The lease will indicate if you need to pay a ground rent on your home. Your solicitor will confirm your obligation
- Details about buildings insurance
- Buying more shares in your home (staircasing).