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UNDERSTANDING YOUR LEASE –  GLOSSARY OF TERMS

Terms and definitions

Assignment This is the term used when you sell your flat and with it the lease. The new leaseholder is the assignee.
Block The building in which your property is situated.
Common parts The parts of the building or estate that all the residents can use, such as stairs, lifts, paths, communal gardens.
Constitution This is a document that sets rules for an organisation such as a residents’ association.
Consultation This is the process of asking for other people’s opinions. Where possible we will consult you about anything we do that affects you.
Contingencies Insured risks or dangers that are covered under our block insurance policy.
Covenant A covenant is a promise to take responsibility for something. The lease states what you are responsible for during your ownership of the property.
Cyclical maintenance Work that we usually carry out according to a programme. It is included in your service charges.
Curtilage or demised premises That part of the block included in the lease you have bought. This will include your flat, the common parts, any garage area and the landscaped area which form part of your block. Your lease will have a plan showing the curtilage. It will show which parts of the building are yours and which parts you share with other people.
Enfranchisement The process where leaseholders may be able to buy the freehold of their block.
Estate The block, any out buildings and any land associated with the block.
Estate rateable value The total of all the rateable values within the estate.
Fixtures You are responsible for these fittings in your flat.  They include kitchen units, the bathroom suite, light fittings and any central heating system.
Forfeiture This means that the lease is terminated, and we as freeholder can lawfully repossess the property, require you to vacate it and dispose of it with vacant possession. This would only take place after significant breaches of the covenants in your lease and following decision by a Leasehold Valuation Tribunal or a Court.
Freehold Absolute ownership of property and the land on which it stands
Ground rent This is the rent paid to the landlord during the term of the lease. It is a small annual fixed sum payable by a leaseholder to a freeholder in recognition of the legal contract between them. We charge £10 each year as ground rent.
Improvement Doing more work to a property than is required to satisfy an obligation to repair.
Landlord This is a person or organisation that owns the freehold (or long term lease) of a property and grants a tenancy or lease to a tenant or leaseholder.
Lease The lease is a contract that explains our responsibility to you, and your responsibility to us.
Leasehold An ownership of a property in a building, that comprises other flats/maisonettes and subject to the payment of service charges and ground rent for a set period of time.
Leaseholder This is the person who has been granted the lease by the landlord and is, strictly, known as a tenant.
Leasehold Valuation Tribunal A body, that makes decisions about service charge disputes between landlords and leaseholders. It is made up of a panel of people with experience of property disputes such as solicitors and surveyors.
Lessee This means the same as leaseholder
Mortgagee This is a bank or building society that has lent you money so that you can buy a property.
Rateable value A property - based sum, used originally as a former method of local taxation, but used in this context as a reasonable way of apportioning service charges.
Section 20 Notice This is the consultation letter we must send you when we are intending to carry out works, which cost more than a amount set by government regulations.
Section 20B Notice If we cannot confirm your actual proportion of the cost of major works within 18 months, we will notify you of the delay under this section, or we will not be able to charge you for the work.
Section 125 Notice This is the Offer Notice, which is provided when the lease is first sold under the Right-to-Buy scheme. It contains the estimated costs of service charges, repairs and improvements during the first five-year period of the lease, together with the maximum contribution you will be expected to pay, subject to an adjustment for inflation.
Service charge This is a payment made by a leaseholder to a freeholder in return for services the freeholder provides.
Sub-letting This is where you rent out part or all of your home to a sub tenant.
Tender This is what we do to get the best prices for big contracts such as redecoration works, and is based on a detailed specification of the works. We invite contractors to give their price or ‘tender’ for the work.

Listed below are the relevant Acts of Parliament, which relate to the management of leasehold properties and service charges, with a short explanation of each.

Law of Property Act 1925

 Notice to mortgagees regarding forfeiture - Section 146 Notice.

Housing Act 1985

 
  • Right to Buy for local authorities and certain housing association tenants. 
  • The form of lease used
  • Limitation of leaseholders liability to pay service charges in the first five years – Section 125 Notice.
  • The Right to a Loan for leaseholders

 Landlord and Tenant Act 1985 (amended by the Landlord and Tenant Act 1987 and the Commonhold and Leasehold Reform Act 2002.)

 
  • Definition of a service charge
  • Reasonableness of service charges
  • Leaseholders' rights to consultation on repairs over a defined limit
  • The 18-month limit on charging for costs incurred in relation to service charges 
  • Leaseholders rights to inspect supporting accounts
  • Recognised residents associations
  • Rights of residents associations to be consulted about the employment of managing agents

Consumer Protection Act 1987

 
  • Landlords’ obligations not to give artificially low estimates of service charges.  

Landlord and Tenant Act 1987 (as amended by the Commonhold and Leasehold Reform Act 2002)

 
  • Variation of leases
  • Demands for rent and service charges must include landlord's name and address.
     

Property Misdescriptions Act 1991

Makes it an offence to provide misleading advice or information to purchasers. 

 
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