Sat 19 Aug 2017
What does leasehold mean?
You only own a leasehold property for a fixed period of time. You’ll have a legal agreement with the landlord (sometimes known as the ‘freeholder’) called a ‘lease’. This tells you how many years you’ll own the property. Ownership of the property returns to the landlord when the lease comes to an end. Most flats are leasehold. Houses can be leasehold too and usually are if they’re bought through a shared ownership scheme.
4 things a selling agent should tell you about a leasehold:1. GROUND RENT
Usually paid annually to the landlord and may rise over time. How much is it, and what are the terms? i.e does it double every ten years, or follow inflation?
2. SERVICE CHARGE
How much is it and what does it cover?
3. RESERVE FUND
Is there one, how much is it and how does it work? This is a fund that leaseholders pay into and the managing agent holds to pay for future maintenance. If there is one and it has built up, this could benefit a buyer, as potential future repairs may already be covered.
4. LENGTH OF LEASE REMAINING
Often adverts will only include the length of the lease as it was at the beginning, so may say 999-year lease even though only 100 years remain, so it is always worth checking with the selling agent when the lease began.
At John German Estate Agents we have qualified members of the National Association of Estate Agents, now known as Property Mark - to provide you with professional advice on buying and selling a property.
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