RESIDENTIAL

Leasehold

Leasehold properties will be either shared ownership houses or, more usually, flats. A residential lease is a complex document that must be carefully checked by the buyer's solicitors. A badly drafted lease can impose onerous liabilities on the tenant and make the property potentially unsaleable or unmortgageable. Fletcher & Lawson have experience in all types of leasehold property (both residential and commercial) and can offer excellent and relevant advice.

There are a number of matters to be considered in relation to residential leases including:

Grant of a New Lease
If a new lease is being granted it must be drafted by the seller's solicitors. The buyer's solicitors may want to amend it to ensure that the tenant's interests are best protected. Stamp Duty is payable on the grant of a new lease.

Rent
Normally a leasehold property is bought by the payment of a single premium. However, a ground rent may be payable. This ground rent may be anything from a peppercorn rent of a few pounds to a more substantial rent, particularly in the case of shared ownership housing. There may be provisions in the lease for a rent review to increase the amount of rent paid.

Strata Fees
With a block of flats where there will be an annual charge for maintenance. This will relate not only to cleaning and decorating the building, but also to structural repairs. The financial accounts for the strata need to be carefully examined for unusual items that would warn a potential buyer of problems with the building or the running of the building. Buildings insurance is also payable, usually as a part of this charge.

Restrictive Covenants
Every lease contains a list of covenants which the tenant must observe. These can often quite substantially affect the use of the property. They must be carefully checked before a commitment to buy is made. There are usually covenants relating to the sale of the lease requiring either the landlord's consent or that notices be served on the landlord after the sale has completed.