When it comes to selling a leasehold property, above and beyond the normal procedures, this will require additional paperwork review that’s specific to this form of property ownership.
A key step in your purchase process will be obtaining the management pack. As a buyer, you will want to ensure your conveyancer fully reviews this and offers you the necessary advice.
What is a Leasehold Property?
A leasehold property means the property owner has the right to live in, or use, the property for a set number of years.
With more modern property, this is likely to be in excess of 100 years. With older properties, it will all depend on when the original date of the lease was and how many years are left on the lease.
Once the lease expires, or reaches the 0-year mark, it reverts back to the freeholder or share of freeholder (the leaseholders collectively own the freehold).
It’s worth noting that leaseholders (owners of leasehold property) are within their rights to extend their lease duration and increase the years.
However, buyers should be aware that extending the lease is a costly exercise. This is something to be mindful of if the lease is less than 80 years.
Management and Leasehold Properties
Leasehold properties are required to have some form of management structure in place. Where there is a leaseholder and freeholder scenario, the freeholder will usually take care of the management directly via a managing agent.
With share of freehold scenarios, the directors of the share of freehold company will either informally manage the property, or will likewise do this via a managing agent.
The type of management scenario will have a direct interaction on how quickly the management pack is provided and how detailed that pack is.
How to Get the Management Pack?
If you’re purchasing the property, your solicitor will request the management pack from the seller’s freeholder or managing agent. This request is made once you have had the mortgage approved and completed the property survey and are sure you’re proceeding with the purchase.
This can take anywhere from a couple of weeks to a couple of months to be available, depending on the managing agent. The managing agent is likely to request a fee for this, which can be anywhere from £300 – £1,500.00.
What’s Inside the Management Pack?
The pack usually contains details such as:
• Service charge budgets and accounts
• Ground rent details
• Insurance policies and certificates
• Safety reports (Gas, Fire, H&S, Electrical, Asbestos, Legionella, etc.)
• Contact info for the property manager or managing agent
• Plans for upcoming maintenance or planned works
• Necessary certifications
• Licence for alterations for works to the property
Do Surveyor’s Review the Management Pack?
Surveyors are unlikely to review the Management Pack, as this will be the duty and knowledge base of the solicitor.
However, if post-surveyor’s property survey issues or red flags are noted within the pack, always discuss these with the surveyor to ensure you’re fully abreast of the consequences.
With any property purchase, we would always advise completing a property survey to ensure you’re fully abreast of any issues the property may be suffering from.
Our take is that a Level 2 Survey is best placed for flats; however, at the request of our clients, we also regularly undertake Level 3 flat surveys.
We have an instant quote feature that will enable you to get a fixed cost for the property survey, along with timings to book the inspection and furnish you with the report.
