When you are buying a Leasehold property, it is very important that you read and fully understand the entire Lease.
Buying a Leasehold property has many advantages but also some disadvantages.
Rights and Easements
The Lease will contain Rights and Easements which you will have over certain parts of land and even other properties. These rights usually include a right of way over footpaths and roads, rights to use communal areas and the right to access other properties, given the correct notice, to repair and maintain parts of your property. These rights are usually reciprocated within your neighbours Leases meaning they will have the same rights as you.
The Lease will also contain positive and restrictive covenants. These are legal promises between you and the Landlord which will need to be complied with. These are very important as failure to comply may lead to enforcement action and potential forfeiture of your Lease. The covenants will detail things that you can and cannot do. Examples of covenants are; not making any amendments without the consent of the Landlord, not to keep any pets at the property and not to play any music or make noise after a certain time.
The Lease will detail the amount of Ground Rent that is payable for the property and when the Ground Rent needs to be paid. The Lease will also detail any increases to the Ground Rent and how often it will increase.
Repair, Maintenance and Insurance
The Lease will confirm what arrangements are in place for repair, maintenance and insurance. You will need to review the Lease thoroughly to ensure that you are aware of which parts of the property you are required to repair and maintain. The Lease will also detail who is responsible for insuring the property.
Restrictions on Alienation and Assignment
The Lease will advise whether there are any restrictions on Alienation or Assignment. This will dictate on whether or not you can let or sublet part or whole of the property. It can also dictate who you can sell the property to. It is very important to understand these restrictions as this may limit the properties saleability. We would suggest that when purchasing a property with a Lease, you read through the whole document thoroughly and raise any concerns with your solicitor.