LEASEEXTENSIONS


Why extend your LEASE?


If you are a leaseholder, chances are that at some pointyou will want


to extend your lease. STEWART GRAY explains what you need to know


England andWales still have a feudal land-owning system


ENGLANDANDWALES still have a feudal land owning systeminheritedfrom theNormans and, as aresult, allEnglish andWelsh land is technicallyowned by theCrown.The land on whichmost property stands is held fromthe crownusing aformoftenurecalledfreehold. This is the nearest thing in lawto absolute ownershipofland. Afreeholder‘owns’not only thesurface of thelandontitle butlandowner’s rightswhichextendupwards to theheavens and downto the centre of the earth.When deciding to build a house the freeholder can (withplanning permission) buildasmany storeys as he wishes upwards or downwards andthemaintenanceofhis entire property is hisownresponsibility.Havingbuiltafreehold house the property can be bought and sold with themaintenanceresponsibility passing alongwiththeownershipinarelatively straightforwardmanner.


Flat Living Autumn2011 Theproblemariseswhen afreeholdis


dividedlaterally (intoflatsfor example). If a freehold houseisconverted into twoflats, one abovethe other, then thetwo flats cannot each be sold freehold as theownership rights would clash. The question ofmaintenance also becomes complicated.Whoistobe responsible,for example,formaintaining theroof? Perhapsthe upperflat -but if this is asmall studio in alarge buildingsuchan


technicallyowned by theCrown


AllEnglishand Welshlandis


onerousmaintenanceobligation wouldrender thestudioworthless. Thesolutionisfor thefreeholdtobe


retained by one entitywho owns the land andisresponsible forthemaintenanceofthe commonly held partsofthe building.The flats arethengiven long term leases of 99 yearsor morewhich canbesoldtoindependent flat owners.The extent of each flatisdescribed in detail on thelease andeachofthe flatowners maintains theirownproperty.Inadditionthe leaseholders each pay an agreed share of the freeholder’s servicecharges.Thispre-agreed servicechargeshould(in theory)allow the freeholder tomaintain parts of the building notcovered by leases withoutdisputesarising overwhat share ofmaintenance should be paid by thevarious flats each timeanywork is carried out. (see pages 53-58 of this issue for moreonservice charges).


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