Buying a property can be fraught with difficulties and pitfalls. Leasehold can add to the uncertainties buyers have. Luckily, a well researched, clear and comprehensive management pack can help to alleviate some of the concerns buyers have as it will clearly detail the expectations, roles and responsibilities of the buyer and the Freeholder / Landlord.
Topics to be answered in this article
What is a Leasehold Property?
A Leasehold property is one in which the Freeholder/Landlord allows you the right to live in the property. The Lease is for a set number of years. Technically you do not own the property outright as the Freeholder owns the building and land that it sits upon.
Additionally, if you’re staying with the same lender but switching to a new mortgage rate or deal offered by them, this usually doesn’t involve any legal changes either. It’s essentially an administrative adjustment within the existing agreement, so again, a solicitor wouldn’t be necessary.
However, it’s crucial to remember, even when a solicitor isn’t mandatory, consulting one can still be highly beneficial. They can offer valuable expertise, ensuring everything is done correctly and protecting your interests throughout the process.
What is a Leasehold Property Management Pack?
The Management Pack details what the purchaser is purchasing and the additional costs the buyer will be responsible for during their ownership. The seller’s solicitor will send the Management Pack to the buyer’s solicitors in order that they can get a better understanding of what their client is purchasing.
How much does a Leasehold Information Pack cost?
The Management Company and/or the Freeholder/Landlord charge for providing the information and the costs are not fixed. Each Management Company has their own fee, and your solicitor will need to make enquiries as to what these may be. Typically costs do range from between £150 and £500.
How long does it take to get one?
Having to obtain the Management Pack(s) can take time and this can cause delays in the sale as the solicitors are relying on third parties to provide the correct information.
Generally, it can take between 3 to 6 weeks, it is therefore good practice for your solicitors to be paid money on account as soon as possible, so that the packs can be ordered and paid for and therefore avoiding delays in the pack being obtained and your buyers being frustrated with the delays.
Where do I get a Leasehold Information Pack from?
Your solicitors will obtain a Management Pack from the Management Company and/or the Freeholder. Sometimes it is necessary to obtain two Management packs if the Ground Rent and Service Charges are paid to two different parties, as a result, costs will have to be paid to both Management Company and/or the Freeholder/Landlord. You will be required to pay money up front to your solicitors so that they can order the Management Pack on your behalf. It is a legal requirement for the seller’s solicitors to provide the pack as the information contained within the pack is required by the buyer’s solicitors.
What is included in a Leasehold Management Pack?
The pack will include a bundle of documents relating to the property you are selling and should include details of who the Landlord and/or Management Company are, copies of any relevant company information and a Leasehold Property Enquiry 1 form (LPE1), which is the standard form used by solicitors.
The pack should contain details of:
- Ground Rent
- The period when the Ground Rent is paid, (as they do not always run from January to December)
- Service Charges (this will detail the maintenance costs for the communal areas both inside and outside of the building (if any))
- Any arrears
- Any proposed increases due in the Service Charges
- Any proposed future maintenance works and the costings
- Budget for the current financial period
- The Management Account history for the past three years
- Minutes from the most recent AGM
- Building Insurance
- Fire Risk Assessment
- Asbestos Survey (if required)
- Freeholders contact details
- Fees payable to the Freeholder (i.e. Notice, Deed of Covenant and any other freeholder fees)
How can Goughs help?
We have many years of experience in preparing and proofing management packs, for the benefit and assistance of both the buyer and the Freeholder / Landlord. If you are looking at buying or selling Leasehold property, then get in touch with a member of the team for advice, or click here to complete our free conveyancing quote form.
