Freehold and leasehold requirements
Most property owners are familiar with freehold houses but will have little or no experience of flats and leasehold properties.
With leasehold property it is very important to understand the extent of ownership – what the flat owner (Lessee) is solely responsible to maintain, and what is the responsibility of the Lessor in the deal.
Every lease is different and specific checks and advice should be sought regarding:
- the length of the lease
- the provisions regarding the insurance and maintenance of the flats
- the restrictions imposed on flat owners, including the ability to let out the flat (included in a buy to let investment).
- the status of the management company (should there be one)
- lenders’ often stringent provisions on leasehold property
The effectiveness of the maintenance of the common parts and the adequacy of a sink fund in the management accounts are important to prevent future problems.