Tag Archives: leases

Can the landlord insist on making variations to the lease in a lease extension?

I am undertaking a lease extension. Can the landlord insist on making variations to the lease?

The short answer to this is ‘yes,’ if the variations are necessary modernisations and the extension is being carried out under the Statute.

The 1993 Act implies certain provisions will have to be included in the new lease (these relate to the landlord’s right to terminate the lease to redevelop the building at the expiry of the original contractual lease term). There are also certain other technical clauses which must be included.

More generally, the question of whether a term can be included or not depends on whether it would be reasonable to include the new term because of changes that have happened since the original lease was granted. The starting point is that the existing lease terms will remain the same, but there are circumstances (particularly in which the lease is defective or out of date) where it may be possible to argue for new clauses to be included.

If you are proceeding outside of the statue then the landlord can ask for whatever terms he would like in the new lease as there is no statutory control over the terms and unless both parties sign up to the process voluntarily the lease will not be extended.

Who is responsible for maintaining the structure of the building?

 

If you live in a freehold property, the answer to this question is simple – if you own the part of the property in question, you are responsible for repairing it.

In a leasehold property a similar logic applies, but you must first establish which bits of the property you own and are therefore also responsible for repairing. This is because with a leasehold property there can be a number of important distinctions between the ownership of a part of the property and the legal responsibility to repair it.

In most leases, the flat owner owns the internal parts of their own flat – for instance, the plaster surfaces of the walls, the floorboards and the ceiling plasterwork. However, the structural or main parts of the building usually belong to the freeholder who has the legal responsibility to maintain and repair them and recovers the cost of doing this via a ‘service charge.’ The proportion of the service charge that you pay might also depend on the size of your flat although this depends on the way in which the leases in the building are written.

There are also some fairly common leasehold arrangements, where the property is effectively divided into ‘layers’ and in which each flat owner is responsible for maintaining their ‘slice’ of the property – both inside and out. This in theory at least makes redecoration and repair of the exterior an interesting exercise and you would hope that the flat owners would co-ordinate in terms of both timing and colour!

This type of arrangement is particularly common in maisonette or ‘one up one down’ type properties – often  in leases granted in the 1970s .

In these ‘maisonette’ leases, it often also turns out that the top floor flat is entirely responsible for maintaining the roof and the ground floor flat is entirely responsible for the foundations.

If your lease has this kind of arrangement then often the only obligation to the freeholder is to pay a ‘ground rent’ – as the insurance of the building is also in the hands of the flat owners. This is at odds with the more frequently found ‘service charge’ type of arrangement mentioned above where the freeholder insurers and the flat owners reimburse the cost of this.

With a leasehold property, the starting point for answering any question about responsibility for maintenance and repair is the lease document itself.

Leases are not always easy to understand and it may help to get professional help in understanding and interpreting the terms in your lease, particularly before commencing major works, or incurring large expenditure as problems can arise if you carry out work on areas that are not owned by you, or that require the consent of the freeholder to carry out work.

If you do require assistance with this sort of issue a specialist solicitor, such as a member of the Association of Leasehold Enfranchisement Practitioners (ALEP) will be well placed to provide you with help and practical guidance on these matters.

What Happens When Your Lease Runs Out

“I want to retire, but the lease on my house is soon to expire”

This is a good question and one that comes up from time to time, particularly in central London where there is often a cost/benefit debate about extending where the term is below 10 years. Most of the compensation is paid in respect of the ‘reversion’ – i.e. the ‘paper profit’ available to the landlord when the lease expires and the property ‘reverts’ back into their ownership.

When a long lease runs out the flat owner has the right to remain in occupation paying a market rent for the property.  However, the landlord can serve a notice under the Housing Act 1989 to bring the long leasehold to an end.  If the landlord serves this certain kind of notice within the last 12 months of the lease term then the flat owner is prevented from being able to exercise their right under the 1993 Act and bring a claim to an extended lease.

There are a number of other points to consider, such as dilapidations, however it is good to see these issues getting an airing in the wider press.