Leasehold property
1. Overview
You only own a leasehold property for a fixed period of time.
You'll have a legal agreement with the landlord (sometimes known as the 'freeholder') called a 'lease'. This tells you how many years you’ll own the property.
Ownership of the property returns to the landlord when the lease comes to an end.
Most flats are leasehold. Houses can be leasehold too and usually are if they're bought through a shared ownership scheme.
2. Leaseholder rights and responsibilities
Your responsibilities
Your lease will tell you what conditions you've agreed to. For example:
- if you need permission to make alterations
- how much you’ll have to pay to maintain the property
- if you or your landlord have responsibility for repairs and dealing with noisy neighbours
You might be taken to court and be ordered to pay for any damage If you don't follow the conditions of the lease. The court may also take away your lease.
Your rights
You have the right to:
- get information about service charges or insurance
- know the landlord's (freeholder's) name and address
- be consulted about certain maintenance and running costs
- challenge certain charges under some circumstances
The Leasehold Advisory Service has answers to some frequently asked questions about rights and obligations of leaseholders and landlords.
3. Service charges and other expenses
Service charges
The lease will set out the way the service charge is organised and what can be charged. If you pay a service charge, you have the right to:
- ask for a summary showing how the charge is worked out and what it's spent on
- see any paperwork, like receipts, supporting the summary
It's a criminal offence if your landlord won’t provide you with this information.
Download 'Leasehold Advisory Service: Service charges and other issues' (PDF, 320KB)
Ground rent
You don’t have to pay ground rent unless your landlord has sent you a formal, written demand for it. However, if your landlord sends you a demand in the correct form, and you don’t pay it, they can take legal action against you.
If your landlord hasn't charged you ground rent for several years, they can only recover it going back 6 years. They can ask you for the full amount in one go.
Your landlord can only increase the ground rent if you agree to the increase or the lease says this can happen.
Building insurance
In most cases, your landlord will arrange the insurance of the building (not the contents) and charge you the cost as a service charge.
You have a right to:
- ask for a summary of the insurance policy
- challenge the cost through the Residential Property Tribunal if you think it’s unreasonable
Reserve or sinking funds
You might have to pay into a fund to help cover any unexpected maintenance or repairs, like replacing the roof. There are rules about how landlords must manage these funds.
Usually, you won’t be able to get back any money you pay into them (for example, if you move).
Consulting over charges
You have the right to be consulted about charges for running or maintaining the building if you have to pay more than:
- £250 for planned work
- £100 a year for work and services lasting more than 12 months
There are steps your landlord must follow when they consult you, known as a 'Section 20’ consultation. If you aren't consulted properly, there's a limit on how much you have to pay.
Disputing a charge
You have the right to appeal to the Residential Property Tribunal if you pay a variable charge and you:
- think the charge is unreasonable
- think the standard of work it relates to is unsatisfactory
- don’t think you should be paying it at all
You can't apply to the tribunal if:
- you've agreed to pay the charge
- the dispute is already being dealt with, eg by the court
- you pay a fixed charge
If this is the case, try mediation or taking over management responsibilities from your landlord.
If you're disputing a charge, don't withhold a payment without first getting professional advice. If you don't pay a charge you’re responsible for, your landlord might take you to court to recover the money.
More information
For full information on service charges and other issues, see the leaflet from the Leasehold Advisory Service (LAS).
Download 'Leasehold Advisory Service: Service charges and other issues' (PDF, 250KB)
4. Extending, changing or ending a lease
Extending the lease
You can ask the landlord to extend your lease at any time.
You might also qualify for the right to extend the lease on a flat for 90 years and on a house for 50 years. There are different rules depending on whether your home is a flat or a house.
The Leasehold Advisory Service's lease extension calculator gives you a guide to the costs of extending the lease of a flat.
Changing the lease
You can negotiate certain changes to the lease, known as 'varying the lease'.
If you can't come to an agreement with the landlord, and live in a flat, you can ask the Residential Property Tribunal to vary the lease.
If you live in a leasehold house, the tribunal can only vary what the lease says about building insurance.
Ending the lease
It's very rare that a landlord can end the lease and evict you. However, there are certain circumstances and leases that let them do this, sometimes known as 'forfeiture proceedings’. They need to send you a formal written notice and get the court's permission.
Usually, you can end a lease by giving at least 1 month’s notice.
The Leasehold Advisory Service has information about ending a lease in ‘When a lease runs out’.
Download 'When a lease runs out - security of tenure' (PDF, 173KB)
When the lease runs out
In law, a lease is a tenancy and the leaseholder is a tenant.
You don’t have to leave the property when the lease has expired. Unless you or the landlord takes specific steps to end the tenancy, it will simply continue on exactly the same terms.
Download ‘When a lease runs out’, above, for more information.
5. Leasehold disputes
Follow the steps below if you’re in dispute with your landlord about a lease.
1. Negotiate with your landlord
Discuss the problem with your landlord before you get others involved.
You can involve other leaseholders if the problem affects them too. It may be easier to settle a dispute if the complaint comes from a number of people.
2. Use mediation
Contact a mediation provider - they will help you and your landlord work out a solution together without going to court or the Residential Property Tribunal.
There might be a fee to pay, but mediation is usually less expensive and less stressful than going to court.
3. Get advice from the Leasehold Advisory Service (LAS)
The LAS offers free advice to leaseholders on issues like:
- service charges
- extending your lease
- buying the freehold
4. Appeal to the Residential Property Tribunal
The tribunal provides a relatively informal way to resolve a wide range of residential leasehold disputes. Their decision is legally binding and they can deal with disputes about:
- service, administration or management charges
- appointing a manager for a block of flats
- building insurance
- buying the freehold
- varying or extending a lease
Read more about changes to your lease to find out more, including costs and how the tribunal makes its decision.
6. Buying the freehold
You can ask the landlord to sell you the freehold at any time. You might also qualify for the right to buy it.
There are different legal steps and rules depending on whether your home is a flat or a house. You can get more information from Shelter - see below.
Right of first refusal
If you live in a leasehold flat and the landlord wants to sell the freehold, they usually have to offer you and the other leaseholders the chance to buy it first. This is known as your 'right of first refusal'.
Get advice on buying the freehold and right of first refusal from Shelter.
7. Right to Manage and management disputes
If you live in a leasehold flat and you’re unhappy with the management of your building, you can either:
- ask the Residential Property Tribunal to appoint a new manager
- take over the management responsibilities, known as your 'Right to Manage'
Appointing a new manager
If you apply to the Residential Property Tribunal to appoint a new manager, you must prove bad management - for example:
- you have to pay unreasonable service charges
- the landlord hasn’t complied with an approved code of management practice
Right to Manage
The Right to Manage lets you and the other leaseholders take over certain management responsibilities from the landlord without having to prove bad management.
You’ll need to find out if you qualify and set up a company with the other leaseholders. The landlord will then transfer the management responsibilities to the company.
You and the other leaseholders can manage the building yourselves or pay a managing agent to do it.
The Leasehold Advisory Service (LAS) has a guide on the Right to Manage.