Common Misconceptions about Leasehold
30th May 2018
A lease is a legal term used in property law to describe a property contract:
- It’s a written agreement between two or more parties.
- It records the basis on which the bargain between those parties have been agreed.
- Although, leaseholders may feel that they don’t have much bargaining power when agreeing to the terms of a lease, which is why you should always thoroughly read your lease and ask any questions before you sign it!
So here are a few common misconceptions made when it comes to leasehold:
“You cant tell me what to do, I’ve brought the flat”
You don’t own the bricks and mortar or land on which the property is built on, you’ve brought the right to live in the property and the lease will say what you can and can’t do in the flat; the conditions could include:
- Having pets in the flat.
- Not being too noisy.
- How many people can occupy the flat.
“I pay you £2,000 to manage my flat”
This is false. The amount of money that is paid to a managing out of the management fee is actually a very small amount of the service charge. The service charge is paid as an actual cost that is incurred from providing a service, meaning there is no profit made from it.
“I brought my flat so why should I pay service charges?”
- When you brought the flat you brought the right to live in the flat and use the common parts.
- The structure and common parts still need to be maintained and that can’t be done without the money from service charges.
- It will say in your lease what is yours and what you share, these common parts need to be maintained and that is done by using money from service charges.
- The land lord retains the obligation to maintain these areas but also has the right to recover costs incurred as service charges.
“It’s only a parking space, why’s there a service charge?”
Communal living includes collective responsibility for shared costs. Car parks require maintenance over the long term and often have common features of flats, for example:
- Entry systems
A FINAL THOUGHT
There are many misconceptions that can be made by a person who is just about to buy/has recently purchased a property but it is always good to make sure that you ask all of the relevant questions when you don’t fully understand a term, otherwise you might never really know what you can and can’t do in the property you’ve purchased.