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Who is the freeholder?

The freeholder is also known as the lessor or the landlord. This is the person who owns the land the development is built on, which usually includes the exterior structure of the building.

What does the freeholder do?

The freeholder is usually required to manage and maintain the structure and common areas of the building, to collect any fees and manage the accounts.

Who is the leaseholder?

The leaseholder is also known as the lessee or the tenant. This is the person who is given the right to occupy the property by the freeholder during a fixed term which is outlined in the lease.

What is a lease?

A lease is an important legal contract between the leaseholder and the freeholder which gives conditional ownership of the property for a fixed period of time. This contract sets out the responsibilities of both the leaseholder and freeholder and will most likely also put in place certain conditions related to the use and occupation of the property. If the leaseholder breaches the lease the consequences can include fines and in extreme cases forfeiture i.e. losing the right to use the property.

What is leasehold?

A leasehold ownership of a property is typically a long-term tenancy, which gives the right to occupy and use the space for a specific period of time known as the ‘term’. The term of the lease is usually 99 or 125 years during which the lease can be bought and sold. This term is fixed, that is to say that if the lease was formed in 2008 and was sold in 2012 there would only be 95 or 121 years remaining. Once this time has passed the property will be returned to the freeholder.

What is a managing agent?

A managing agent is a company chosen by either the freeholder or in some cases the leaseholders to manage and maintain the building on their behalf. The managing agent receives a fee for this service, which is paid for by the leaseholder as part of the service charges.

In certain circumstances leaseholders can appoint a managing agent. Please feel free to contact our team if you are a leaseholder and require more information.

What is a management company?

A management company is usually a group of leaseholders who wish to take over the management and maintenance of the building. This group will normally choose to employ a different managing agent to act on their behalf.

What is ground rent?

Ground rent is a fee paid by the leaseholder to the freeholder towards the rental of the land which the building is on. The consequences of not paying the ground rent can be forfeiture of the lease meaning you lose the flat.

What are reserve funds?

A reserve or sinking fund is a contribution made each year to build up savings for any future works such as roof or lift repairs, redecoration or equipment replacements. This reserve is used to fund any unexpected costs, however if there is an insufficient amount of money then the remaining costs will usually be charged according to the percentage set out in the lease. The contributions made to the reserve fund are not repayable if the lease is sold.

What are services charges?

Service charges are payments made by the leaseholder as a contribution to the maintenance of all common areas within the building. These charges usually cover the expenses for things such as repairs, building insurance, cleaning, upkeep of lifts and lighting as we as management costs.

Service charges will vary from year to year, with the only limit being that they are reasonable. Details of what can and cannot be charged by the freeholder and what proportion is to be paid by each individual leaseholder are set out in the lease. All of these charges must be paid by the leaseholders and are now usually allowed to be collected in advance, either repaying any surplus (balancing credit) or collecting any shortfall (balancing charge) at the end of the year.

Do I have to pay?

Why do I have to pay services charges?

Services charges must be paid as a contribution to the upkeep of the common areas, since these areas are used by all leaseholders.

Who decides how much service charge I pay?

The original developer of the building, or their managing agent, will usually measure out how much of the common areas will be used by individual leaseholders and base the charge upon this. However it is at the complete discretion of the developer to decide how much they charge each individual, so long as it is reasonable.

I own my flat why do I have to pay for the lift?

A lease does not grant complete ownership of the flat, it only offers the right to occupy the space. The space is still owned by the freeholder who possesses the land it is built on and who requires a contribution towards costs of preserving common areas which are being used by everyone within the building. This is the charge which has been specified within the lease.

The freeholder wants to carry out major works to the building; do I have to pay for it?

Yes. The freeholder can collect funds for any planned works they want to do, so long as they consult each leaseholder beforehand and the cost is within reason. The freeholder must notify each leaseholder of their plans and take into account any advice/input they offer. If they do not do this, the leaseholder is usually not liable to pay any more than £250 towards the cost.

What do I need the freeholders consent for?

I own my flat, can I redecorate it?

Most leases will require the leaseholder to obtain a License to Alter pack from the freeholder if the alterations are going to affect any of the following for example:

  • Affect the face of the building e.g. changing/adding a door or window.
  • Removing or cutting through any interior, exterior or partitioning walls.
  • Increasing any waste water leaving the flat.
  • Modifications to communal services e.g. rerouting communal waste pipe or removing a radiator in a common area.

Am I allowed to have a pet?

Some leases prohibit pets in the property or require that you obtain permission first from the freeholder. You should check your lease to see what has been written.

Can I sub-let my flat?

If the leaseholder wishes to rent out the flat, the lease usually requires that they obtain permission from the freeholder. Any costs of complying with a sub-letting clause are not included in the block management fee to keep costs as low as possible and fair for those who do not rent out their flats. The leaseholder needs to register the details of the tenants and non compliance is regarded as a breach of the lease.

I want to have Sky TV; can I install the satellite dish?

You will need to acquire consent from the freeholder to make the alteration to the face of the building. There may also be other consent you need to acquire, for example planning permission if you’re occupying a listed building.

I live in the top flat; can I extend into the loft space?

In this case you will need to check the lease to see if you have the right to occupy that space. If you do not, you will need to purchase it and acquire consent from the freeholder. You may also need to have planning permission for any alterations. If you have to purchase the right to occupy the space, your service charges may also increase but this is dependent on the freeholder.

I have a tree in my front garden which blocks out light; can I cut it down?

In this case you will need to gain the consent of the freeholder. However, you should also check to make sure there are no other permissions needed, for example there might be a Tree Preservation Order.

Common Problems

What should I do if emergency repairs are needed?

Any problems in the common areas of the building should be reported to the managing agent, for example if the lift is broken or the lights aren’t working. However any problems within the area occupied by the leaseholder are not the managing agent’s responsibility.

My neighbours are making lots of noise, especially late at night, what can I do?

In order to deal with inconsiderate neighbours, it is better to contact your local Environmental Health Department who have the necessary authority to resolve the situation quickly.

There is a leak coming from the flat above, do I need to pay for the damage to my flat?

If there is a leak from the flat above, the first thing to do is to try and contact the tenants and notify them of it so they have the chance to fix it. However, if you find they aren’t very compliant or you cannot contact them you should notify us so we can try and make contact.

In many cases it depends on the circumstances so please contact us if you have any issues.

My freeholder has sent me ground rent demands covering the last five years, can he do that?

Yes he can. The freeholder is legally allowed to collect any charges that have not been paid within the last six years as long as he has provided the right notice and documentation. However six years is the furthest back he is allowed to collect charges for.

The leaseholder in the flat above me has removed the carpets and installed a wooden floor. It’s very noisy; what can I do?

In many cases, the lease will contain a clause concerning the flooring such as whether or not it needs to be carpeted. If the leaseholder has breached the lease, legal action can be taken against him but may require a payment towards the associated costs with taking action. If he has not breached the lease, there is not a lot that can be done but you can always contact us and we can explore any other options you may have.

I’m unhappy with…

I’m not happy about the amount of service charge I pay; should I stop paying?

No, you should think of the service charges as rent. If you don’t pay the services charges you face being fined or you could face forfeiture of the lease.

My freeholder has redecorated the building exterior but I’m not happy with how much I have been charged; what can I do about it?

As long as the freeholder has provided a sufficient consultation to notify you of what they plan to do and have offered you the chance to voice your opinions, they are able to charge you for the work that has been done.

I’m not happy with the current management of my building; what can I do?

If you are unhappy with your current managing agent you can usually set up your own Right to Manage Company to take over the management of the building from the freeholder. However in order to do this, 50% of the leaseholders need to participate. Therefore if there are ten leaseholders in the building, five are needed to take over management. You are entitled to do this without having to prove incompetence. If you are not able to use the ‘Right to Manage’ route, please contact us for information about possible alternative ways.

I’m not happy about how high my services charges are; what can I do to change them?

If you are unhappy with your services charges you can talk to your managing agent and discuss the issue. If you are still unhappy either with the response or lack of one, you are entitled to the Right to Manage your own property or to employ a new managing agent to do it for you. You can contact us if you have any queries which we can help you with.

I’m paying services charges but the common areas in my building are not being cleaned; what should I do?

If you have any problems you should contact the management of the building to discuss the matter with them. They should be able to resolve any problems you have, but if they do not there several options available to you which we could guide you through.

I’m not happy about the length of time it has taken to do repairs at my block; can I do anything about it?

In this case it is dependent on what type of repair is needed. You can contact our team and we will be more than willing to help and guide you through the different ways you can handle this type of problem.

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Introducing our clients...

I wish to thank you for all the hard work you have been putting in with regards to the management of our block. Living here myself, I have found everything running vastly better. I have received warm and appreciative comments from my neighbours also, congratulating the promptness and professionalism with which you have addressed their issues.

Dr J Jones – Resident Leaseholder

Quite possibly the best decision we made was to involve HPBM in the early stages of our development. The knowledge they have has been invaluable in getting our new block up and running smoothly whilst ensuring the leaseholders are happy with how things are run.

Mr P Smithson – Developer & Freeholder

I think I speak for the large majority of property owners when I say HPBM’s solutions made perfect sense. They put the needs of our tenants and us, as property owners at the forefront of their proposals.

Mr D Humphrey – (Lease Appointed) Management Company Director

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