Leasehold Property law. Personally delivered.
Leasehold Property law. Personally delivered.
The transactional work a building generates — enquiries packs, deeds of covenant, licences to assign, certificates of compliance, notices and share transfers. Handled on a turnaround your leaseholders will not complain about.
Freeholders, RMCs, RTM companies and managing agents · Standard document sets · Regulated by the SRA · London and nationwide
A flat in your building is being sold. Within days the buyer’s solicitor will want an enquiries pack, three years of accounts, an insurance schedule, a deed of covenant, possibly a licence to assign, and a certificate without which the buyer cannot be registered at all.
None of it is optional, most of it runs to a timetable set by somebody else, and a good deal of it carries legal consequences for the company if it is done badly or late. We take that load off freeholders, resident management companies, right to manage companies and the agents who act for them — for blocks of flats and for freehold estates alike.
Almost every leasehold sale follows the same path. Knowing where you sit in it is the difference between a company that is chased and a company that is not.
The seller’s solicitor asks the landlord, management company or agent to complete the LPE1 form and supply the supporting documents. Everything else in the transaction waits on this.
Gaps in the pack, missing consents for alterations, unexplained service charge increases, arrears, and anything the accounts do not explain. This is where undocumented history surfaces.
A licence to assign where the lease requires consent, a deed of covenant from the buyer, and any retrospective consent for works carried out without permission.
Notice of assignment and of any charge is served with the prescribed fee, a certificate of compliance is issued so the buyer can be registered, and any share in the company is transferred.
The industry has standardised these enquiries, which is a considerable improvement on the correspondence that preceded it. The forms are long but predictable, and a company that keeps the underlying documents current can complete one in an afternoon.
What has to go with it. Three years of service charge accounts, the current budget and the reserve fund position. The buildings insurance policy and schedule with evidence the premium is paid. Any deeds of variation, licences to alter, licences to assign and previous certificates. Notices served, disputes, arrears and forfeiture proceedings. Fire risk assessment, asbestos survey and the building safety information the form now requires.
Accuracy is not merely good practice. The replies are relied upon by a buyer and their lender. A pack that understates arrears, omits planned major works or fails to mention a dispute can expose the company and its directors to a claim. Where the answer is not known, say so — an honest “not known” is safe; a confident guess is not.
Most leases require an incoming leaseholder to covenant directly with the landlord, and often with the management company as well. The company is frequently not the landlord and may have no contractual relationship with the buyer at all — the deed creates one, so the service charge can be enforced against the person who now owns the flat.
The date of the lease matters. For leases granted before 1996 the original leaseholder generally remains liable on the covenants for the whole term. For leases granted from 1996 onwards an outgoing leaseholder is released on a lawful assignment — so without a deed of covenant from the buyer, the company may find it has nobody to sue.
Keep a standard form. Drafting one from scratch on each sale is why the fee looks disproportionate to the work. And an assignment completed without the required deed is a breach of covenant, so the certificate should not be given until it is in place.
Where a lease requires consent to an assignment, the position is materially different from consent to alterations — and considerably more dangerous for a company that takes its time.
The Landlord and Tenant Act 1988 applies. Where the leaseholder applies in writing, the landlord owes a duty to give consent within a reasonable time unless it is reasonable not to, to serve written notice of the decision with reasons, and is liable in damages for breach of that duty. There is no equivalent for alterations, where the 1988 Act does not apply at all.
Reasonable grounds include arrears, a subsisting unremedied breach, genuine doubt about the buyer’s ability to meet the service charge supported by references, or an intended use that would breach the lease. Unreasonable ones include a dispute with the seller unconnected to the assignment, an attempt to extract a payment or variation the lease does not provide for — and delay or silence, which under the 1988 Act is itself a breach.
The drill that keeps a company safe. Acknowledge in writing within days and say what you need. Decide within a reasonable time. Give the decision in writing, with reasons if it is a refusal. Keep the correspondence. A company that does those four things is difficult to criticise even if its decision turns out to be wrong; one that does none of them is exposed even if it was right.
This is the most powerful document a company issues, and the one most often signed without being understood.
Many leasehold titles carry a restriction requiring a certificate — from the landlord, the management company or their conveyancer — confirming that the lease provisions governing an assignment have been complied with. Until that certificate is given, HM Land Registry will not register the buyer as proprietor. The company therefore holds the final step of somebody’s house move, which is a responsibility rather than a bargaining chip.
Check before signing: that the deed of covenant has been executed and a copy held; that notice of the assignment and of any charge has been served with the fee; that any licence to assign the lease requires has been granted; and that any share in the company has been transferred and the register updated.
Two errors, in opposite directions. Certifying what has not been checked undermines the company’s own protection — a certificate given years ago where no deed of covenant was ever taken leaves the company with no direct covenant from a leaseholder it has been billing ever since. Withholding a certificate you cannot justify is worse: using it as leverage in an unrelated dispute invites a complaint and, where the delay causes loss, something more than a complaint.
And read the restriction, not just the lease. Its wording governs who may certify and in what terms. Some require the landlord or the company; some accept a conveyancer. Some refer to a specific clause, others to the lease generally. A certificate in the wrong terms is rejected by the Land Registry and the transaction comes back to you.
The paperwork after completion is unglamorous, and it is what keeps a building governable. A company that lets it slide finds out two sales later.
Most leases require notice of an assignment, and of any mortgage, within a set period and with a fee. The notice is what tells the company who now owns the flat and where to send demands, and in practice it is the trigger for updating everything else.
Who owns which flat, from what date, at what address for service and with which lender. Who holds which share, with the certificates and stock transfer forms filed. A log of every licence to alter and licence to assign granted, with the deed — the single record that saves the most time on future sales. And every deed of variation, because a lease that has been varied is not the lease in the deeds packet.
The share must move with the flat. Well-drafted articles require an outgoing member to transfer it and give the directors the means to compel it. A former leaseholder still holding a share in a building they left years ago is a problem the company created for itself.
A landlord must give leaseholders an address in England or Wales at which notices may be served. Until it does, ground rent and service charges are not lawfully payable — so a company that changes agents, or whose registered office follows a departed director, can quietly suspend its own right to be paid.
Every item on this page can properly be charged for. What a company may not do is charge whatever it likes, and the constraint is statutory rather than a matter of goodwill.
Chargeable. Completing the enquiries pack, preparing a deed of covenant, considering and granting a licence to assign, receiving notices of assignment and charge, issuing a certificate of compliance, and transferring a share. Each is a service and each properly attracts a fee.
The limit. In a long residential lease these are administration charges. They are payable only so far as the amount is reasonable, and a leaseholder may apply to the First-tier Tribunal for a determination. A fee is not beyond challenge because it appeared on a completion statement.
The requirement that is missed constantly. A demand for an administration charge must be accompanied by a summary of the leaseholder’s rights and obligations in the prescribed form. Without it the leaseholder may withhold payment — the commonest and most avoidable reason a company does not get paid for work it has already done.
And publish a schedule. The companies that attract fewest complaints publish a short, dated schedule of fees and hand it over with the pack. It removes any suspicion that the figure was invented for the occasion, and makes a reasonableness challenge far less likely to be worth anybody’s while. Reform is heading the same way: the Government has committed to standardising these documents and constraining the charges and timescales attached to them.
Not every managed development is leasehold. A great many modern estates consist of freehold houses subject to an estate rentcharge, with a management company responsible for the roads, open spaces, drainage and lighting that the local authority never adopted.
The transactional work is the same in shape and different in detail. The enquiries come on form FME1 rather than LPE1. A deed of covenant is almost always required from the buyer, because the positive obligations do not otherwise run with freehold land. And the title will usually carry a restriction, so the buyer cannot be registered without a certificate from the management company.
Estate rentcharge enforcement is under scrutiny. The remedies attached to rentcharges are widely regarded as disproportionate, and reform has been proposed. Companies relying on them should take advice before enforcing rather than after.
We act for estate management companies and their agents on the same basis as for blocks: standard documents drafted once, and a turnaround that does not hold up sales.
In our experience the same handful of things hold up leasehold sales, and almost all of them are fixable months before anybody puts a flat on the market.
The leases, deeds of variation, consents and registers are with a former director, a former agent, or nowhere.
Now a buyer’s solicitor wants evidence that does not exist.
So the pack cannot be answered.
So the seller cannot transfer what they do not hold.
Entirely understandable, and the reason to delegate the transactional work rather than absorb it.
An hour a year prevents most of it. Accounts certified. Insurance reviewed and the schedule filed. Registers of leaseholders, members and shares brought up to date. Consents logged. Fee schedule refreshed and dated. Building safety documents checked. Address for service confirmed as current. Done annually that is a short meeting; done reactively in the middle of somebody’s sale, it is why a chain fell through.
We take the transactional load. Enquiries packs, deeds of covenant, licences to assign, certificates of compliance, notices and share transfers, on a turnaround your leaseholders will not complain about.
Standard documents, drafted once. A set of forms tailored to your leases, so each sale becomes administration rather than legal drafting. That is what keeps the fees proportionate and the turnaround short.
We tidy up the history. Missing consents, undocumented alterations, shares that never transferred, defective apportionments and leases that have drifted apart — better done between sales than during one.
Senior oversight, proportionate cost. Routine items are handled by our paralegal team under senior supervision, so a certificate does not cost what a lease extension does.
And the difficult ones. Building safety certificates, retrospective consents, arrears and forfeiture, and the sale that has already gone wrong.
How we charge. Fees are quoted on application. For the recurring items we can agree a standing schedule so you and your leaseholders know the cost of each document in advance, and for companies that would rather have a solicitor available as questions arise we can put an arrangement in place. Managing agents are welcome to instruct us directly on behalf of the companies they act for.
The Leasehold Property Enquiries form completed by the landlord, management company or managing agent on the sale of a flat. It covers ground rent, service charges, accounts, insurance, consents, disputes, works and building safety. Its companion, LPE2, is completed by the seller, and FME1 is the equivalent for a freehold estate.
There is no statutory deadline, but the whole transaction waits on it. Turnaround across the market ranges from a week to two months, and the difference is almost entirely whether the underlying documents are current. A company that keeps its accounts, insurance and consents in order can complete one in an afternoon.
Yes. It is a service and properly attracts a fee. In a long residential lease it is an administration charge, so it is payable only so far as reasonable and a leaseholder can apply to the Tribunal for a determination.
Often because the demand did not comply. A demand for an administration charge must be accompanied by a summary of the leaseholder’s rights and obligations in the prescribed form, and without it the leaseholder may withhold payment. It is the commonest and most avoidable reason a company is not paid.
A short deed by which the incoming leaseholder promises the landlord or management company directly that they will observe the lease covenants. It matters most for leases granted from 1996 onwards, because the outgoing leaseholder is released on a lawful assignment — without the deed, the company may have nobody to sue.
A certificate confirming that the lease requirements governing an assignment have been met. Where the title carries a restriction, HM Land Registry will not register the buyer as proprietor without it — so the company effectively holds the final step of the transaction.
Only where the lease requirements have genuinely not been met. Using the certificate as leverage in an unrelated dispute invites a complaint and, where the delay causes loss, worse. Check what the restriction actually requires before deciding.
A reasonable time. Where the lease requires consent and the leaseholder applies in writing, the Landlord and Tenant Act 1988 imposes a duty to decide within a reasonable time, to give written reasons, and makes the landlord liable in damages for breach. Delay is itself a breach.
No, and the difference catches companies out. The 1988 Act does not apply to alterations: there is no statutory deadline and no damages for an unreasonable refusal. Silence is still evidence of unreasonableness, but the exposure is quite different.
A register of leaseholders with addresses for service and lenders; a register of members and shares with certificates and stock transfer forms; a log of every consent granted with the deed; and every deed of variation. The consents log saves more time on future sales than anything else on the list.
It needs regularising, and it is easier before the next sale than during one. The seller cannot transfer what they do not hold and the buyer cannot become a member, so the transaction stalls while somebody tracks down a former leaseholder who left years ago.
Yes, in England or Wales. Until you do, ground rent and service charges are not lawfully payable. Companies that change agents, or whose registered office follows a departed director, can suspend their own right to be paid without realising it.
The LPE1 now asks about leaseholder deeds of certificate, landlord’s certificates and any outstanding enforcement action. The deadlines are short, and a landlord that fails to provide a landlord’s certificate when required may lose the ability to recover remediation costs from leaseholders altogether.
Yes. The enquiries come on FME1, a deed of covenant is almost always required because positive obligations do not otherwise run with freehold land, and the title will usually carry a restriction. The work is the same in shape and different in detail.
Fees are quoted on application. For recurring items we can agree a standing schedule so the cost of each document is known in advance, which also lets you publish your own schedule to leaseholders. Managing agents can instruct us directly on behalf of the companies they act for.
How many flats or houses, who owns the freehold, whether there is a management company and whether an agent is in place. Then whatever is pressing — a pack that needs producing, a licence application sitting unanswered, a certificate you are unsure about signing, or a set of standard documents you would like drafted once and used from then on. Managing agents are welcome to contact us directly on behalf of the companies they act for. The first conversation is at no cost.
