What is a Fully Leasehold Services?

Fully Leasehold Services

A fully Leasehold Services is a property where the building and land are owned by the freeholder. The freeholder is responsible for maintaining and repairs, with any costs recovered through service charges paid by the leaseholders.

The freeholder of a Leasehold Services is usually the landlord, or in some cases an individual or group of individuals. They can be a local authority, a housing association or a private individual.

Unlike the freehold ownership of a property, which is outright (once you have repaid your mortgage), the leasehold is a long-term contract that can last up to 50 years, or even longer. Once the term expires, your rights and interests revert back to the freeholder.

In many ways, the terms of a leasehold agreement are similar to those of a rental tenancy. Typically, the leasehold term is set out in writing and includes conditions to be met by the leaseholder.

What is a Fully Leasehold Services?

These include paying a monthly fee called lease rent, as well as paying ground rent to the freeholder. In addition, the lease may include a clause which states when you can apply for permission to make alterations to your flat, such as laying wooden flooring or installing new windows.

Your service charge should be calculated to reflect your proportion of the shared services that are provided, such as maintenance and repairs, cleaning shared areas or a contribution to any building insurance. You should also ask your freeholder if they have a reserve fund or other plans to cover future major works that may increase your service charge.

It is important to find out what your current and future service charges are, as they can be very expensive if not managed carefully. You should also check if your freeholder has made arrangements to put money aside for any major works that are due in the near future, such as a lift replacement or external decorations.

The wording used to describe administration charges will vary from one lease to another, so it is a good idea to read your lease thoroughly and ask for a copy of it. Some may state a fixed amount, others require a’reasonable’ amount and there might be other variations too.

Whether you need to pay an administration fee will depend on the circumstances and how much of the work was carried out by your freeholder or their managing agent. You should also check that the charge is a reasonable amount, which is why it can be worth speaking to your conveyancing solicitor before you pay any money.

You can also use the Leasehold Advisory Service’s lease extension calculator to help work out how much your renewal will cost you.

Your service charges should also include a contribution to a reserve or sinking fund, which is intended to cover future major maintenance and repair works in the building. Your lease should also set out how this will be funded and when it is likely to be needed.