What To Look For In A Lease
30th Jun 2021
What to look for in a lease? Signing a new lease is always exciting but a little nerve wracking. On one hand your new space means new opportunities and experiences, on the other is a legal document and who knows what might be hiding there?
If you’re about to sign a lease, don’t get tripped up. Here are a few common lease terms, make sure you read them carefully before you sign, otherwise do you really know what you’re signing up for?
The parties and the property
Your lease will identify the land lord, tenant and the property (or premises). Make sure that it is your name and the correct property on the lease.
The length, or “term” of the lease
The term is the time that you are legally allowed to occupy the property and legally obligated to pay rent for. Read this to make sure it’s not any longer or any shorter than you have previously discussed with the landlord.
Any lease that falls below 80 years is considered to be a short lease. While this may seem like a long time, in terms of leases, 80 years is the cut off point, something commonly referred to as the ‘80-year rule’. Allowing a lease to drop below 80 years means any costs associated with extending it start to increase dramatically as marriage value (the value increase created by a new lease being granted) begins to become payable.
- How much do you pay?
- When do you pay it?
- When does it increase and how much by?
- What does it cover?
- When do you pay it?
- How is your proportion calculated?
- Are there interest charges or penalties for late payments?
- Is there a reserve fund?
- Are there admin charges payable to the freeholder?
Responsibilities and who they fall on
- Who is responsible for insuring the building?
- Who is responsible for utilities?
- Who maintains replacing window frames and balconies?
- Who is responsible for maintenance and repairs within the flat?
- Alterations within
- Number of people allowed to live at the property
- Hanging washing/signage
Other things to look for in a lease…
- Requirements when you sell/ when your lease runs out
- Can you carry out alterations/ improvements?
- When are external/ internal decorations due?
It’s tempting to sign a lease on a new apartment while largely ignoring most of its provisions but any factor that you ignore could be a potential problem later, for this reason you must always check that the terms of your lease are exactly what you were told they are, otherwise you might not be getting the experience you thought you would when buying your first property.