The lease is by far the most important aspect of any flat purchase, as it governs the behaviour both of residents and the freeholder, if there is an outside freeholder. Even if there is not, and the lease is sold with a share of the freehold, there will still be a ‘leaseholder’ and a ‘freeholder’ or ‘landlord’, even if the leaseholders and landlords are one and the same.

In situations where the residents have enfranchised, the landlord will have become a limited company, so that if the building is called Fairview Court, the landlord will be Fairview Court Ltd, where each resident is a shareholder and there is a Board of Directors and a Secretary.

There has to be some kind of separation into freeholder and leaseholder for the thing to work, to ensure that service charges are met, common parts are looked after and repairs are carried out. Even when the ‘lunatics run the asylum’, there has to be some legally-binding document in place that ensures the smooth running of the building. There may or may not be managing agents, as this is not a legal requirement.  But, in any case, the limited company acting as the landlord has the same powers as an outside landlord, and can forfeit leases or put a charge on a property.

Now you can see how it becomes complicated to buy a flat! The lease is a legally binding document on both sides, and there could be serious penalties for breaches. When you sign a lease, you enter into the terms of that lease, so it is as well to know what you are signing.

Questions To Ask

If you are interested in a lovely flat in a wonderful location you need to ask – and have satisfactory answers to – the following questions before ever making an offer:

1. How long is the lease? Very often, on estate agents’ particulars, it says ‘to be advised’. They want to get you through the door before they tell you the bad news, by which time, they hope, you will have fallen irrevocably in love with the flat. Be very careful of properties where the lease is 80 years or less, as it will then be difficult to obtain a mortgage. And even more difficult to sell!

2. Is the flat being sold with a share of the freehold? Nowadays, estate agents often put this on the particulars, but not always. Always buy with a share of the freehold where possible, as this means there is no outsider in overall charge.

3. If the flat is not sold with a share of the freehold, who is the landlord or freeholder? Is anything known about this person or company? Do they generally have a good reputation? It is important to remember that estate agents do not always know themselves who is the landlord, so it is up to you to find out, especially if they look blank when you ask them.

4. Is there more than one leaseholder? In other words, is there a complicated layer of ownership where there is a landlord, a head leaseholder and ordinary leaseholders, such as you, the buyer? This often happens with mansion blocks in London.

5. Are there any plans to enfranchise? If so, how advanced are these plans? And how much is it likely to cost everybody?

6. What are the service charges?

7. Are there any plans for major works?

8. Is there a sinking fund in place? If so, how much is it?

9. If the lease is shorter than 80 years, can it be extended, and how much would a lease extension cost?

10. Are there any serious debtors in the building?

11. Are there managing agents?

12. Is there a Residents’ Association?

13. Is subletting allowed? Under what terms? (This is particularly important to know if you are buying your property as an investment.)

14. Is there a lift?

15. Is there a communal heating and hot water system? Wherever possible, avoid these blocks.

16. Is there a resident porter? Remember, that the more services there are, the more expensive the building is to run, and the higher the service charges.

17. Are all the leases the same? In older buildings, some leases may be different from others. In new buildings, all leases are usually identical. Before buying into an older block, ask if all leases are identical, as having differing leases can cause enfranchisement problems. 


Although some of these questions may appear pernickety, it is worth remembering that once you are in, it may be difficult, if not impossible, to change anything. And very often, solicitors do not ask all of these questions. Many conveyancing solicitors, themselves living in secluded mansions in the suburbs, may not understand leasehold law all that well. It is a specialised area, rapidly becoming ever more specialised as laws change and ever more tribunals, regulations and associations start up.