Advice LEGAL LeAsehoLDTERMSexpLAineD


Confused by jargon? If so, here is SLC Solicitor’s A-Z (less a fewletters) of legal terms LEASEhoLd jARGonA-z


Anotherwordfor thesale or transfer ofalease.Oftenassignments requiretheconsent of theRMC/ landlordbefore theycangoahead.


Usedin thesenseofafailure to complywithanobligationina leaseordocument.Breachhas repercussionsasitwill allowthe RMC/landlordto takeactionto remedy.Themostcommonbreach is failure topay rent orservice chargein lease.


A B


Apromiseoranobligationtoeither performanaction[positivecovenant] ordesist fromperformanceofan action[restrictivecovenant].Usually foundin leasesanddeeds.These obligationsareonthepart of the landlordandalsothetenant.If broken[breach–seeabove] then therearelegal repercussions.


C Assignment D BreAch covenAnt


Akin toaservicechargebutapplies to freeholdhouses[asopposedto flats]onanestatewhere thereare commonamenitiestobemaintained suchasprivateroads, landscaped areasetc.


E F


24


DemAnD forpAyment


In ordertosecurepayment of rents orservicechargesunder leases thenawrittendemandforpayment mustbesent toeachtenant; it mustbecompliantwithstatuteand includespecific informationsuch aslandlord’saddressforservice inEnglandandWalesANDhave prescribedschedulesof tenants’ rightsandobligationsattached. Ifnot accurate in theserespects thenthe demandisnotvalidandthetenant is not obligedtopayuntil it receivesa validdemand.


G


estAte chArge


grounD rent


Anannualrentpayablebyatenant ofalonglease[a leasewithaterm greater than21years] to thelandlord. Canbeanominalamount butmost modernleasescontainground rentsofafewhundredpounds whichare increasedevery20orso years [usuallydoublinginamount]. Failure topaycantrigger forfeiture proceedings.


TheLeaseholdValuationTribunal is thevenuefor disputesabout residentialservicecharges–an alternativeto thecountycourt–a lowcostandrelatively informal methodofresolvingservicecharge issues.HearingsatLVTwilloccur if disputescannotberesolved. TheLVThasjurisdictiontohear disputesonliability topayandthe ‘reasonableness’ ofservicecharges.


H forfeiture


TheRMC/landlord’s ultimate sanctionforbreachofatenant’s covenant ie, theright to re-enter andrepossessthepropertyand bringleasetoend.Threat of thiswill oftenpromptpayment of arrearsof servicechargeandgroundrent.


I J


heAring [inLvt]


JointAnD severALLy LiABLe


Ifoneflatisownedbymore than oneindividual,thoseindividuals areliable jointly forallpayments dueunder thelease–but alsoeach oneisindividually liable forthe collectiveamount.Say,forexample, ifoneofthemmovedoutandwas untraceable–thewholeamountof thesumdemandedisduefromthe remainingtenant.


L


interimpAyments ofservicechArge


RMCs/landlordscanprepare budgets for theyearaheadbased onanticipatedcostsofexpenditure andasktenantstopayinterim


sumsonaccountofservicecharge. At financialyearendthenthe


accountscanbepreparedofactual expenditureandbalancingpayments canthenbedemandedfromthe tenantsif theinterimpaymentswere lowerthanactualcosts incurred.If higher,thenanyoverpaymentsby tenantsareusually ‘rolledover’ to thetenants’ credit in thefollowing year’saccounts.


LeAsehoLDer/ Lessee


Othernamesforatenant ofalease.


If thetenant is in arrearswithservice chargeand/orgroundrent–very oftenthemortgagelenderwillpay thoseifnotifiedof thearrearsand advisedthatforfeitureproceedings willbecommenced.


M


mortgAge LenDer [tenAnts]


Winter 2011 Flat Living


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