A brief guide for Leaseholders

Since the Right to Buy was initiated tens of thousands of tenants have exercised the right to purchase a lease on their tenanted flat. However, during this period, many were poorly advised and failed to understand their full responsibilities as a leaseholder. This has led to problems and difficult but necessary choices having to be made regarding charging for significant works.

While conflict can arise as a result of these disputes, thankfully, conflicts between social tenants and social landlords have not been as bad as some of the well-documented cases in the private sector. This is because social landlords as ‘not for profit’ landlords tend to be more sympathetic to the issues presented by leaseholders, while regulation of the sector helps. But that is not to say, that disputes don’t occur. Disputes often occur due to the following:

  • sales
  • absent landlords (where the former RTB home has been let out to a tenant, or are absent leaseholder’s)
  • overcharging major works or recovering money owed for major works
  • service charges
  • ground rent
  • buy back valuations
  • enfranchisement (buying the freehold)
  • maintenance etc.

There has been a steady stream of cases due to these issues recently, compounded by the austere times some are having to live. That’s why it’s important for leaseholders to know their rights and their obligations and for landlords to get involvement right and to understand the profiles of leaseholders.

Its important, because there are also new challenges presenting themselves, such as welfare reform and the need to improve the efficiency of properties in addition to an evolving building and fire regulations.

What is evident, it that many social sector leaseholders are unprepared for the major works costs that may be required to address disrepair in their blocks and could find themselves quite late in their lives having to find thousands of pounds as their contribution to these costs. We also have the added complication of ensuring tenants who have not exercised their right to buy to have modern homes that are efficient to run alongside that of leaseholders in the same block.

In some cases social landlords have sought to buy back the lease and convert properties back to tenanted lets, however lease holders are often surprised at the property valuations they’ve received. This is because of a range of factors such as: they are sitting tenants, or the lease period is relatively short, or the extent of outstanding works required on the block is substantial and detracts from the market value.

So what level of service can leaseholders reasonably expect from management agents and their landlord, how are their activities regulated. These are important considerations for tenants and leaseholders as in extreme cases, if things go wrong, grounds go untended, communal hallways are not cleaned and broken windows stay broken, and expensive litigation can ensue. In the meanwhile demands for service charges still arrive. Thankfully we do not have the problems to this extent in the social housing sector but nevertheless both landlord and leaseholder need to better prepare for things that can go wrong.

So what action can leaseholders take, what are their rights and responsibilities? The following link www.welshtenants.org.uk/i-am-leaseholder provides a brief summary of leaseholder’s rights and obligations. Over the coming months we will be publishing more information highlighting these issues.

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