When buying a flat, you will have to comply with a lease agreement between yourself (the Tenant) and the person who owns the development/building (the Landlord). The format and terms of leases vary considerably. There are common problems that crop up with some leases and need to be resolved, particularly if you are arranging a mortgage. The first issue which commonly crops up is the term of the lease – how long there is left to run. It is difficult to sell a property if the remaining term is less than 70 years. It is likely that the lease will need to be extended before you purchase.

The lease plan may no longer accurately reflect the layout of the flat, if alterations have been undertaken. Often the lease will need to be amended and a new plan substituted before you purchase. There are a number of rights you need as a tenant, one of which is a right to support, protection and shelter from the rest of the building. Many leases are pretty old and lender’s requirements are likely to have changed since the lease was granted. These leases often contain inadequate rights of support, protection and shelter and often have defective insurance clauses.

Resolving Issues With The Lease

The good news, though, is that lease problems can usually be rectified easily. There are two ways of resolving the issues:

  1. The preference is to vary the lease. This is fairly straightforward if the Landlord agrees. There are certain times, such as if the property has been altered or if you want to extend the term, where the Landlord can charge a premium. However, the premium is a defined one and they cannot charge whatever they want.
  2. Alternatively, a legal insurance policy (indemnity policy) can be put in place. Again there is a premium and it doesn’t rectify the problem so is never the ideal solution. The volume of legal jargon contained in leases can daunting and it is important you understand it when you buy your property.

When our client’s make purchase, we review the lease very early on and seek to resolve any issues immediately. If you are selling a property and would like us to have a peek at your lease and see whether you are likely to have any issues, just give us a call on 01273 407 970.

Sarah Morgan-Kelly
Managing Director & Solicitor