Buying a Leasehold Property

The purchase of a leasehold property may be a good way to save money and build equity. However, it is worth understanding the risks before making this decision.

When buying a Leasehold Service Startup, it is important to make sure the terms of the contract are clear and that you have full legal support. You can find out more about what to expect in our guide on buying a leasehold property, or you can contact us to speak to one of our solicitors.

A freehold is where you own the whole property and the land on which it stands, while a leasehold is where you own part of the property (usually a flat) and share in the maintenance costs. These include services charges and ground rent.

The Risks of Buying a Leasehold Property

Some people buy a property on a leasehold, whilst others choose to buy a house with a freehold. The majority of houses sold in the UK are freehold, although there has been a rise in leasehold properties.

A service charge is a monthly payment to your freeholder for all the services that they provide which benefit the areas you and other leaseholders in your block of flats share together. These may include cleaning, heating, repairs and maintenance of communal areas and the grounds.

The level of service charges payable by each leaseholder will depend on the details of your contract. They can be fixed or variable, and are likely to increase with inflation every year. They are also a source of dispute, with some leaseholders arguing that the amount they are being charged is too high.

If you have a leasehold and want to challenge the amount of your service charges, you can ask for a tribunal hearing. The tribunal will examine whether the works incurred were reasonable and what procedures the freeholder had for assessing and controlling them.

There are some very strict rules about demands that you must send to your landlord. These must be in writing and contain your landlord’s name and address.

They must also contain an address in England or Wales which you can use to send notices to your landlord if they do not reply to your demands. If you receive a service charge demand in the post which does not contain these details, it is unlikely that you will have to pay it.

When you pay your service charge, you should have a written record of it and keep it safe for the future. This is a key point when it comes to buying a leasehold property, as it will give you legal protection against your freeholder’s demands.

The service charge you pay should cover a range of essential services and should be based on an accurate estimate of the work that the freeholder will have to do. It is a criminal offence for the freeholder to overcharge or fail to charge the correct amount.

If the freeholder is failing to meet their obligations, you should contact a specialist leasehold enforcement firm immediately and request that they take action. This could involve negotiating with the freeholder to reduce your service charge, and/or taking court proceedings against the freeholder for breaching their lease.