The Lease

Questions and answers extracted from the 2016 AGM Minutes

Q: Are residents - who are leaseholders and shareholders in the SRA Company, in a position to change the lease?

A:   As each  person (or household) holds a seperate lease, then every leaseholder would have to agree to changing anything in the lease, which would be an expensive process.  The Company Solicitor explained that if anyone wished to amend anything in the lease, it wasn't possible to just amend one lease.  There is a header lease and any amendments to this lease would have to filter down through all of the other leases.  He also said that the lease had already run the test of time for 30 years and the lease has been quite clear, it's not just a case of one lease, you could amend the lease in parts a, b, and c, but you would then have to change every lease.

Q: Regarding the need to ask permission for everyday run of the mill things, like plants, shrubs etc, why was permission needed?

A:  The Managing Agent advised that the lease refers to the space within the four walls of an apartment or bungalow.  Everything outside should and is governed by the terms of the lease.  As an example, if a leaseholder wished to plant a shrub in a front garden it would require permission from the committee.  The tenant would also be responsible for maintenance of the shrub.

Q:  Can residents collectively make amends to the lease?

A:  The  Company Solicitor stated that it would depend on what would be involved.   The Managing Agent said that the last amendment was the extension of the lease to 150 years, however not everyone extended their lease due to the cost.  The Company Solicitor commended and said that the actual header lease wasn't changed, extensions to the sub-leases were prepared.

Q:  What would the cost be to a resident to have any item changed in the lease?

A:  The Managing Agent said that the cost to amend items in the lease would vary depending on the nature of the amendment/s.  The Company Solicitor replied that the cost of the extension to the lease was approximately 350 per resident, however, anything else may be in the region of 500 each.  The Managing Agent said that for the 56 properties on the estate the overall cost would be 28,000.

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Article on 'Living in Leasehold'

Below is a very informative article on 'Living in Lease' by ARMA - The Association of Residential Managing Agents - fuirther information on all aspects including Managing Agents, Regulations, Managing your Block, The Right to Manage etc can be found on their website at https://arma.org.uk/leaseholders/living-in-leasehold, (definitely well worth a read)

With a well written lease and a professionally managed building, a leasehold flat can be an ideal home and a secure investment.

What is leasehold?

In its simplest form, owning a leasehold flat is a long tenancy. You have the right to occupy and use the flat for a long period of time - the 'term' of the lease. This will usually be for 99 or 125 years.

As a leaseholder, you will normally own and be responsible for everything within the four walls of your flat. This will include the floorboards and plaster to the walls and ceiling. The structure, external walls and communal parts of the building, including the land it stands on, will usually be owned by the freeholder who is also the landlord.

The landlord can be a person or a company including a local authority or a housing association. It's also quite common for leaseholders to collectively own the freehold through a residents' management company, effectively becoming their own landlord. This is called collective enfranchisement.

Know your lease

Your lease may be quite complicated but its fundamental role is simple. It's a contract between you and the landlord giving you conditional ownership of your flat for a fixed period of time. It sets out your contractual obligations as a leaseholder and those of your landlord so it's important you know and understand it. This will include payment of ground rent (if any) and contributions to the costs of maintaining and managing the building through service charges.

The lease will also place certain conditions on the use and occupation of the flat. It's especially important to understand these before you purchase your flat. It's not uncommon for someone to move into their new home only to discover a beloved pet can't come with them because they are not allowed under the terms of the lease!

Service charges

It will normally be the landlord's responsibility for managing, maintaining and repairing the communal areas of the property. They may also arrange for other services such as insurance for the building, provision of central heating, lifts, porterage, estate staff, lighting and cleaning of communal areas.

The leaseholders will pay service charges to the landlord for providing such services. Usually the charges will also include the costs of managing the building, either by the landlord or by a professional managing agent.

Details of what can and cannot be charged by the landlord and the proportion to be paid by the individual leaseholders will all be set out in the lease.

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