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A common misconception when people purchase their freeholds is they believe it to be the end of the story. This is often not the case and steps should be taken to protect the position. Why do you need new leases if you have bought your freehold? Although you may own the freehold of your building, the original leases remain in place. They cannot be “cancelled” as they regulate the legal relationship between the flat owners and the freehold company. Taxation Issues The usual position when purchasing the fre

What is ground rent? If you own a long lease on a property in England and Wales you will normally have to pay rent to the freeholder or landlord of the property. Commonly a nominal amount (e.g. £50, £100 p.a.). The ground rent will either be fixed meaning that a certain amount is paid every year for the duration of the term, or escalating whereby the amount increases by a certain amount throughout the term (e.g. doubling, increasing by a specified amount at a specific point in the term of the lease su

Ground rents for leasehold properties are making the news. Greedy landlords and developers are reserving very large grounds rents, which escalate over the lease term to what can be pretty gigantic sums for innocent homebuyers. Campaigns are being waged and politicians are starting to pay attention to the issue. It is worthwhile considering why leasehold tenure of property exists as a matter of law. One advantage of leasehold property is to overcome the difficulties with making positive obligations (i.e. m

What if you’ve found the flat of your dreams but the lease term is short?  If you’ve found a property that you like but the lease has anything fewer than 85 years left to run, alarm bells should be ringing. This is because once a lease gets to less than 80 years, something called ‘marriage value’ comes into play, which makes extending it much more expensive. It gets even more difficult if the lease has fewer than 70 years to run, as lenders will generally not grant a mortgage. Care needs to be taken if t

The Leasehold Reform, Housing and Urban Development Act 1993 enables eligible leaseholders to acquire a 90-year extension to their existing lease, subject to a peppercorn ground rent. The other main terms of the lease, such as service charge and obligations to repair, are to remain substantially the same, although limited changes are allowed in order to update the document or correct any defects which may exist in a poorly drafted lease. The key qualification criteria for a lease extension are that the or

Will I have to pay the 3% Stamp Duty Land Tax Surcharge to extend the lease of my main residence? The answer is more than likely yes if the following criteria are satisfied: Your new lease has a term of more than 7 years. The premium you are paying for your new lease is more than £40,000. You own another residential property, in the UK or otherwise, which has a market value of more than £40,000. The legislation introducing the 3% surcharge came into force in March 2016 and applies to b

The press for leasehold houses has been less than positive of  late, particularly concerning ground  rents, but leasehold houses are not  a modern phenomenon and existing legislation is favourable to lessees.    Sheffield is a leasehold house hotspot in the United Kingdom and being a Sheffield-based law firm, PM Legal Services has expert knowledge of the complexities and the various legal issues that arise from them.   A leasehold house is a diminishing asset that could, in certain circums tances, be

All night parties do not generally encourage amicable and cordial neighbourly relations. A selfish and inconsiderate neighbour can be stressful and upsetting, and often as a result, long suffering residents do not know which way to turn.   Most forms of neighbourly unpleasantness falls into the category of private nuisance. “Nuisance” is another category of “tort”, or civil wrong, and it covers a range of matters which interfere with an owner’s use and enjoyment of his or her property, without necessarily

The EU General Data Protection Regulation (GDPR) is the biggest ever shake up to data protection laws, yet many businesses may be unprepared, says Deacon, the blocks of flats insurance specialists. With the GDPR’s introduction taking place in May 2018 and the UK not leaving the EU until 2019 at the earliest, Brexit will not affect the introduction of the GDPR in the UK. The UK will replace the 1988 Data Protection Act (DPA) with legislation that mirrors the GDPR post-Brexit. This means now is the time to

Issue 90 of News on the Block is now available to view online.  This issue includes some of the following articles:  Nationwide's £54m Ground Rent portfolio  Tragic fire at Grenfell Tower Landlord loses Tribunal appeal Criminal landlords to be named and shamed Raising the roof will raise you cash: If you’re struggling to find the funds to upgrade your block, did you know that your roof could be the answer? Enfranchisement & Right to Manage Special Feature The practical points of RTM:

QUESTION I am the chairman of an Independent Leaseholders Association (10,000 RTB members) We have held regular monthly meetings for approximately the last eight years. My RTB (flat) lease dates from 1992. Since I do not wish to pass on a problematic legacy to my family on my demise, I have recently been negotiating with the council to purchase a 99 year extension to the existing lease. I was recently sent a draft of the proposed extension stating that the extension is granted under S 56 of the 1993 Act.

How hard do you imagine it would be to find your way out of your block in the dark if the lights had failed? Emergency lighting saves lives. Anyone living in a flat hopes they will never need to rely on it but when a major incident does occur, effective, well maintained lighting and signage is vital. In an article on emergency lighting regulation published earlier this year, I wrote: “Imagine how much more serious the worst-case scenario could become if your system is poorly maintained and doesn’t work pr