Buying or Selling a Leasehold Property
A leasehold property may be purchased either:
- Through the Right to Buy if you are an existing Secure tenant
- On the open market if the property has previously been bought under the Right to Buy
You may also acquire leasehold property through an inheritance or other form of gift.
Whether you exercise your right to buy, purchase on the open market or inherit the property, it is important that you have a legal representative, or someone else suitably qualified who will protect your interests throughout the process and make sure you understand your obligations under the terms of the lease and the charges you may be required to pay
Buying through the Right to Buy
Buying a leasehold property through the Right to Buy is actually very similar to buying privately – there are no special protections offered simply because you bought your property from the council.
As a leaseholder you will also be required to contribute to the costs of administering the leasehold management service in addition to the costs of maintaining the block within which your property is situated. This may include paying towards major repair works, for example; a new roof to the block, the costs of which sometimes run into thousands.
Please note that your first year’s bill will not be pro-rata if your purchase completes part-way through the year; this is because rent and service charges are not calculated in the same way and some charges are also specific to leasehold home ownership.
You should also be aware that you will have to repay some of your discount if you sell the property within 5 years and that the council retains a first right of refusal on any sale within 10 years. This means you must offer to sell the property to the council before you advertise it on the open market.
Buying on the open market
When buying on the open market you must let us know as soon as the sale has completed as we will not necessarily be notified by other means. We have a right to know who is responsible for the property and failure to let us know you have bought it would be considered a breach of your lease.
As a leaseholder you will also be required to contribute to the costs of administering the leasehold management service in addition to the costs of maintaining the block within which your property is situated. This may include paying towards major repair works, for example; a new roof to the block, the costs of which sometimes run into thousands.
You may also be held responsible for any service charges left unpaid by the previous leaseholder as the charges are associated with the lease, not the person. As such it is important that your legal representative verifies what charges may be outstanding or due, and ensure that these are either paid before the sale completes or that a portion of your purchase price is withheld to cover payment of the service charges.
Selling a Leasehold Property
When you sell your property you must let us know straight away so that we can update our records. It is also important that you have a legal representative, or someone else suitably qualified who will ensure that the sale is carried out legally as you will still be held liable for any charges on the property unless there is a proper legal document to show that the title has been transferred.
You should also be aware that when selling your property you are technically selling the leasehold interest and this means that the new owner will be subject to the same lease terms.
In addition, if you bought your property under the Right to Buy:
- Some of the discount you received will have to be repaid if you sell, or agree to sell your property within 5 years of completing the Right to Buy – the amount you repay is based on the market value of the property at the time of sale
- The Council will have first right of refusal to buy the property back from you for 10 years after the Right to Buy completes. However, the Council is not obliged to buy it back.
Inheriting a leasehold property
If you inherit a leasehold property you may know very little about leasehold home ownership prior to the property becoming your responsibility. In this case we would strongly recommend seeking some independent advice in respect of your rights and responsibilities.