Buildings insurance flats leasehold

With leasehold the freeholder owns the land your home is built on. When you buy your home, you lease it from a freeholder.

Leasehold is the way most flats are owned. Houses can also be leasehold, for example some new builds and those bought through a shared ownership scheme .

Leasehold is like having a very long tenancy. You have a legal agreement with the freeholder called a lease which allows you to own your property for a fixed number of years.

When it is first created, a lease usually lasts between 99 and 125 years, but it can be for as long as 999 years. Each year the number of years left on the lease reduces.

Check how many years are left on a lease before you buy. The number of years left on lease affects the cost of your home and its resale value.

You can usually pay to extend a lease before it expires.

A lease is the legal agreement between a leaseholder and a freeholder. It sets out their rights and responsibilities.

  • how much ground rent costs and when it can be increased
  • how service charges are calculated and paid
  • who is responsible for minor repair and major works
  • how repairs are paid for
  • when the freeholder's permission is needed for alterations
  • who is responsible for arranging buildings insurance

Both you and the freeholder must keep to the conditions of the lease. If one of you doesn't, the other can take legal action.

Always check what is written in your lease. Most of your rights and obligations are set out in it.

Shared ownership leasehold is where the leaseholder owns a share of the property and rents the remaining share, usually from a housing association.

The leaseholder can usually buy more shares until they own the whole home. The housing association may have first refusal when you want to sell.

The freeholder owns the land your home is built on. The freeholder can be an individual, a private company, a council or a housing association.

Many leaseholders have no direct contact with the freeholder and deal with a managing agent instead.

You may be able to become the freeholder by buying the freehold.

Leaseholders have the right to know the freeholder's name and an address in England or Wales where they can be contacted. Your freeholder or managing agent can be fined if they do not give you this information after you write to ask for it.

All your service charge and ground rent bills must include the name and address of the freeholder, even if a managing agent sends the bills.

You don't have to pay until you have these details. When you have the details you must pay the full amount that is due.

If the managing agent won't give you the details you can ask the Land Registry for the title register of your property. You can do this online or by filling out a form. You have to pay a small fee.

If your freeholder can't be found, you can apply to the leaseholder tribunal to appoint a manager of the freehold.

Leaseholders usually have to pay charges to the freeholder or their managing agent.

Your lease says what charges you have to pay. This usually includes:

  • ground rent
  • service charges for general maintenance and repairs
  • a share of the buildings insurance
  • a contribution to a sinking fund to cover the cost of future repair works

Extending a lease can add value to your property, especially if you have a short lease.

To be allowed to extend, you need to have owned the property for at least two years.

Contact the Leasehold Advisory Service if you need advice about your rights as a leaseholder or are having problems with your freeholder.

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