What Rights Do Leaseholders Have?

When you buy a residential property, it’s important to understand the type of ownership you will have. While the majority of properties are freehold, some are owned through a leasehold.

It’s essential to understand the rights and responsibilities you have as a leaseholder. This article will explain what you can do when there is a leasehold in place.

What is a leasehold?

A leasehold is when you buy the property but not the land it sits on. Instead, this land is owned by the freeholder or landlord.

Leaseholds are only in place for a set amount of time, typically anything from 99 to 999 years. We’ll talk about leases and lease extensions later on in this article.

Conversely, a freehold means you own the property and the land the property is built on forever.

Leaseholds are commonly found in flats and apartments. While you own your specific residence, your landlord owns the structure, common parts of the building, and the land on which it stands.

Leaseholders typically have to pay ground rent as well as a service charge which covers the cleaning of communal areas, groundskeeping, general maintenance, and buildings insurance.

Find out more about the difference between a freehold and a leasehold.

Leasehold rights

Before you enter into a leasehold, it is important that you are aware of what rights you will have as a leaseholder.

The right to query repairs

While you are responsible for repairs inside your property, the freeholder is responsible for repairs to the structure of the building as well as communal areas.

The freeholder can charge leaseholders extra for repairs if the ground rent and service charges don’t cover costs. However, they must carry out a consultation if the work will cost each leaseholder more than £250 in total or £100 a year.

For example, let’s say a freeholder wants money to install a new lift. If you think the existing lift is still fit for purpose or the proposed plans are too expensive, you can have your say. The freeholder has 30 days to comment on your feedback in writing.

Bear in mind that this only applies to leasehold flats. If you live in a leasehold house, you are responsible for structural repairs. In addition, your leasehold agreement will specify who is responsible for shared areas like communal gardens.

The right to ask how money is spent

You have the right to ask for a breakdown of service charges, as well as see proof of how money is spent. The freeholder has a month to provide this information to you.

If you don’t think the charges are reasonable or don’t get the information you request, you can take the freeholder to court.


The right to buy the freehold

If a freeholder wants to sell the property, the leaseholder (or leaseholders when a flat is being sold) has the right to buy the freehold. In most cases, leaseholders will be offered first refusal.

In the case of a flat, at least half of the residents need to be willing to be involved in the purchase. You will either need to set up a company or agree for one resident to take charge as the ‘nominee purchaser’.

If the freeholder isn’t willing to sell or you can’t agree on a cost, you can go to a tribunal.

Buying a freehold can be complicated, so it’s definitely worth bringing a solicitor on board to make sure you’re eligible and to talk you through the process.

The right to extend your lease

When a leasehold expires, ownership of the land and building (including your specific property) goes back to the freeholder.

If a leasehold is short (i.e. under 100 years), this can make handing down a property to descendants tricky. This is because even if you have paid your mortgage, property ownership would eventually revert to the landlord.

A short leasehold can also make it hard to remortgage or sell your property.

In this scenario, you can negotiate a lease extension with the freeholder. It’s always best to work with a solicitor to ensure you get the best outcome and that there are no unexpected costs.

If you’re looking to buy or sell your home, we’re Liverpool and Southport’s trusted conveyancing solicitors. Contact our team today to see how we can help you quickly move into a brand-new property without excess paperwork.