Leasehold Property law. Personally delivered.
Leasehold Property law. Personally delivered.
Freeholders, resident management companies, right to manage companies and the agents who act for them. The obligations are the same whether a building is run by an investor with a portfolio or by two leaseholders in their own time — and so are the consequences of getting them wrong.
Freeholders, RMCs and RTM companies · Managing agents welcome · Regulated by the SRA · London and nationwide
We advise freeholders and investor landlords, resident management companies, right to manage companies, housing associations, family trusts and estates, and the managing agents who act for them.
A great many of our clients are leaseholders who found themselves running a building — directors of a company formed when the freehold was bought, doing an unpaid job for their neighbours. The law makes no allowance for that. The obligations, the deadlines and the personal duties are identical to those of a professional landlord, and the areas where companies come unstuck are remarkably consistent.
Whoever owns the freehold inherits the landlord’s covenants in every lease in the building, and the statutory overlay that sits on top of them. Buying the freehold does not simplify that; it transfers it.
To full reinstatement value, and producing the policy when a leaseholder asks for it.
Whatever the leases allocate to the landlord — structure, common parts, services — and doing so to a reasonable standard.
Properly, including holding the money on statutory trust and producing accounts.
Before qualifying works or long-term agreements, in the prescribed form and to the prescribed timetable.
To requests for information, to applications for consent, and to statutory notices, within the periods the legislation allows.
Where the freehold is held by one: filings, registers, directors’ duties and identity verification.
More disputes arise here than anywhere else, and most of them are avoidable.
What is recoverable is limited by the lease. A cost the lease does not provide for is not payable however reasonable it may be. The starting point is always the wording, and where the wording does not work the answer is a variation rather than an optimistic demand.
Charges must be reasonably incurred and the works of a reasonable standard, and a leaseholder can apply to the First-tier Tribunal for a determination. A demand that cannot be explained by reference to the accounts is a demand that will be challenged.
The eighteen-month rule. Costs incurred more than eighteen months before a demand are not recoverable unless the leaseholder was notified in writing within that period that the costs had been incurred and would be charged. It catches out companies that let a year drift while a dispute over a contractor is resolved.
The money is held on trust. Service charge contributions belong to the leaseholders collectively, in a designated account, and cannot be treated as the company’s own funds or used to meet its other liabilities.
And the demand itself must comply. It must give the landlord’s name and an address in England or Wales, and be accompanied by the prescribed summary of rights and obligations. Ground rent must be demanded in the prescribed form. Until an address for service is given, ground rent and service charges are not lawfully payable — which catches companies that change agents or whose registered office follows a departed director.
Where qualifying works will cost any leaseholder more than £250, or a long-term agreement more than £100 a year, the landlord must consult in the prescribed form and to the prescribed timetable. Failure to do so caps recovery at those figures per leaseholder, regardless of what the works actually cost.
That is the single most expensive procedural mistake available to a freehold company. On a roof replacement across twelve flats it can be the difference between recovering the cost and absorbing almost all of it.
Getting it right means the right notices, the right observation periods, genuine consideration of observations received, the right number of estimates and the right disclosure of them — and starting early enough that the process is not compressed to fit a contractor’s availability.
Where it has gone wrong, the Tribunal has power to dispense with the consultation requirements. Dispensation is not automatic and turns on whether the leaseholders have suffered prejudice, but it is frequently obtainable and it is a great deal cheaper than writing off the works. We make those applications.
And before the works, the money. Whether the lease permits demands on account, whether a reserve fund exists and whether it may lawfully be applied to these works are questions to settle before the contractor is instructed, not afterwards.
Unpaid service charge and ground rent are recoverable, but the order of operations matters and shortcuts create problems that outlast the debt.
The demand must have complied in the first place — name and address, prescribed summary, correct form for ground rent. A defective demand is not a debt yet.
Where the amount itself is disputed, the forum is the First-tier Tribunal. Where it is simply unpaid, the county court. Choosing the wrong one wastes months.
And the costs of recovery are only recoverable to the extent the lease permits and the amount is reasonable, as an administration charge — which is itself challengeable.
Alterations without consent, subletting in breach, short-term letting, nuisance, hard flooring, unauthorised pets — the everyday friction of a shared building.
Forfeiture is not the first step and rarely the right one. A long residential lease cannot be forfeited for breach unless the leaseholder admits it or a court, tribunal or arbitral tribunal has determined that it occurred. That determination has to be obtained first.
In practice an injunction, a damages claim, or a properly documented retrospective consent achieves more, faster and at less risk. And where the leases contain mutual enforcement covenants, a leaseholder can require the landlord to act — at the leaseholder’s cost, but the obligation is real.
We advise on which route is proportionate before anything is issued. A great deal of enforcement correspondence is written in a tone that guarantees a fight over a point that could have been closed in a fortnight.
Leaseholders have rights that can be exercised against you whether or not you welcome them, and each runs to a timetable with consequences for missing it.
A section 42 notice requires a counter-notice by the date specified. Miss it and the leaseholder can apply to the court for a new lease on the terms set out in their own notice. We check the notice’s validity, advise on the premium with a valuer, serve the counter-notice and conduct the negotiation.
A section 13 notice puts the freehold itself in play. We test whether the building and the group qualify, advise on the price, deal with the leaseback election — which can materially reduce what you receive but also what you give up — and take the matter to the Tribunal where the price is not agreed.
Management passes to an RTM company if the claim is good, and the grounds for opposing one are narrow. The realistic question is usually whether the claim is procedurally valid and how the handover is managed, not whether it can be resisted.
If you are contemplating selling the freehold, the leaseholders must usually be offered it first. Failing to serve an offer notice is a criminal offence and the buyer can be compelled to transfer the building to the leaseholders at the price they paid. This catches landlords who sell quietly far more often than it should.
Every sale in the building generates work for you, on a timetable set by somebody else. A management pack, a deed of covenant, sometimes a licence to assign, and a certificate without which the buyer cannot be registered at all.
We take that transactional load off management companies and agents — enquiries packs, deeds of covenant, licences to assign and to alter, certificates of compliance, notices of assignment and charge, and share transfers — on a turnaround your leaseholders will not complain about. A set of standard documents drafted once for your leases turns each sale into administration rather than legal drafting, which is what keeps the fees proportionate.
And where the leases themselves are the problem, we deal with that too: defective service charge apportionments, missing repairing obligations, absent rights, and block-wide variation programmes where a defect runs through every lease in the building.
Where the freehold is held by a company, running that company properly is part of running the building.
Under the Economic Crime and Corporate Transparency Act 2023, directors and people with significant control must verify their identity with Companies House. It has been compulsory for new appointments since November 2025, and existing directors are within a transition period closing in November 2026. Leaseholder directors are caught exactly as a trading company’s directors are, and are far less likely to have heard about it.
A confirmation statement and accounts, on time. A company that stops filing is eventually struck off — and on dissolution its property, including the freehold of your building, vests in the Crown as bona vacantia. Recovering it means restoring the company or buying the freehold back, and neither is quick or cheap.
Who owns which flat, who holds which share, and whether the two still match. A share that never followed a flat is a problem at every future sale.
Directors owe their duties to the company, not to the neighbours who elected them. That matters most when a decision favours one flat — a variation, a licence, a share of roof space — and it is why such decisions should be priced properly and minuted.
What is delegated and what is not, the limits of the agent’s authority to spend, what happens to the money and the records on termination, and how the agreement ends. Many companies have no written agreement, or one nobody has read.
The Building Safety Act 2022 placed substantial duties on whoever is responsible for a building, and in a leaseholder-owned block that is the company and its directors — not the managing agent, whatever the management contract says.
Where the building is higher-risk, the company is likely to be the accountable person or principal accountable person, with duties to assess and manage building safety risks and to maintain a safety case.
The leaseholder protections work through certificates. Where a landlord becomes aware that a leaseholder intends to sell, it may have only days to require a deed of certificate and a limited period to provide its own. A landlord that fails to provide a landlord’s certificate when required may lose the ability to recover remediation costs from leaseholders altogether — which for a small freehold company facing a remediation bill is not an administrative slip.
Where your building is over eleven metres or five storeys, or has any known cladding or fire safety defect, the certificates and the deadlines should be dealt with by somebody who knows the regime before a sale makes them urgent.
In our experience the same handful of things account for most of the trouble, and almost all of them are fixable in advance.
Capping recovery on major works at £250 a leaseholder.
No address for service, no prescribed summary, ground rent not demanded in the right form — so the money is not lawfully payable and the arrears claim fails at the first hurdle.
While a dispute with a contractor is resolved.
Where the leases oblige the company to enforce covenants against everybody, permitting one leaseholder to do something the leases prohibit can put it in breach to all the others — a point established in litigation that reached the Supreme Court. A consent given in good faith can generate claims from leaseholders who never objected to the works.
And in the worst cases a freehold lost to the Crown.
The leases, the deeds of variation, the consents and the registers with a former director, a former agent, or nowhere — discovered during somebody’s sale.
We act for both sides. A substantial part of our practice is for leaseholders bringing the claims you may receive. That is precisely why we are useful to a landlord: we know what a leaseholder’s solicitor will argue, where a claim is vulnerable and where resistance is not worth the cost. We check for conflicts before taking instructions and will not allow one to arise.
Proportionate, not adversarial. Most of what reaches us is a management problem before it is a legal one. We will tell you where a letter closes something down and where proceedings are genuinely the answer — and we are experienced before the First-tier Tribunal and in the county court when they are.
Standard documents, drafted once. A set of forms tailored to your leases so that each sale is administration rather than drafting, with senior solicitor oversight and routine work handled by our paralegal team.
We tidy up the history. Missing consents, undocumented alterations, shares that never transferred, defective apportionments and leases that have drifted apart — better dealt with between sales than during one.
Fees are quoted on application. For defined pieces of work — a licence, a variation, a counter-notice, a consultation programme — we quote a fixed fee before we start. For companies that would rather have a solicitor on call, we can put a standing arrangement in place. Tell us about the building and we will propose something.
Yes, in full. The company you formed is the landlord, and it inherits every landlord covenant in every lease plus the statutory overlay. Consultation, demands, accounts, trust money and directors’ duties apply exactly as they would to a professional landlord.
Recovery is capped at £250 per leaseholder for qualifying works, and £100 a year per leaseholder for a long-term agreement, whatever the works actually cost. The Tribunal can dispense with the requirements, but dispensation is not automatic and turns on whether leaseholders have suffered prejudice.
Only if the leaseholders were notified in writing within eighteen months of the costs being incurred that they had been incurred and would be charged. Without that notification the costs are not recoverable, however properly they were spent.
First check the demand complied: name and address for service, the prescribed summary of rights, and the correct form for ground rent. If the amount is disputed the forum is the First-tier Tribunal; if it is simply unpaid, the county court. Recovery costs are recoverable only so far as the lease permits and the amount is reasonable.
Not directly. A long residential lease cannot be forfeited unless the leaseholder admits the breach or a court, tribunal or arbitral tribunal has determined that it occurred. In practice an injunction, a damages claim or a documented retrospective consent achieves more, faster and at less risk.
Yes. Service charge contributions are held on statutory trust for the leaseholders, in a designated account. The money is not the company’s own and cannot be used to meet its other liabilities.
Check its validity, take valuation advice and serve a counter-notice by the date specified. If you miss the date the leaseholder can apply to the court for a new lease on the terms set out in their own notice, which is a poor place to end up.
Not if the building and the group qualify. What is negotiated is the price and the terms of acquisition. You may be able to require a leaseback of units not let to qualifying leaseholders, which reduces the price — and the qualification tests are worth checking carefully before conceding.
The grounds are narrow, and the realistic question is usually whether the claim is procedurally valid rather than whether it can be resisted. Where it is good, the sensible course is an orderly handover of records, funds and contracts.
Usually not. The leaseholders must generally be offered it first under the right of first refusal. Failing to serve an offer notice is a criminal offence, and the leaseholders can require the buyer to transfer the building to them at the price paid.
Yes. It has been compulsory for new appointments since November 2025, and existing directors and people with significant control must verify within a transition period closing in November 2026 — by the date of the next confirmation statement. Leaseholder directors are caught in the same way as any other director.
Its property vests in the Crown as bona vacantia — including the freehold of your building. Recovering it means restoring the company to the register, which is possible for a limited period, or buying the freehold back from the Crown. Neither is quick or cheap.
Check the enforcement covenant first. Where the leases oblige you to enforce covenants in the other leases, permitting one leaseholder to do something the leases prohibit may put you in breach to everybody else in the building. A consent given in good faith can generate claims from leaseholders who never objected.
In a higher-risk building the statutory duties sit with the accountable person, which in a leaseholder-owned block is the company and its directors. They are not delegable to a managing agent, whatever the management contract says.
Fees are quoted on application. For defined pieces of work we give a fixed fee before starting. For companies that would rather have a solicitor available as questions arise, we can put a standing arrangement in place. Tell us about the building and we will propose something.
How many flats, who owns the freehold, whether there is a management company and whether an agent is in place. Then whatever is on your mind — major works coming up, arrears, a notice you have received, a leaseholder asking for consent, or simply a sense that the paperwork is not what it should be. We will tell you what needs attention now, what can wait, and what it is likely to cost. Managing agents are welcome to contact us directly on behalf of the companies they act for. The first conversation is at no cost.
