A simple guide to the leasehold property market

We’re starting with the simpler stuff and building up to the more complicated elements of the market:

• Property: the building and land which makes up the subject property as defined by the lease.
• Ground Rent: the rent payable to the landlord by the lessee as required by the lease.
• Landlord: the person or company which owns and rents or leases the Property. This person may also own the freehold or may have a superior leasehold interest in the property themselves.
• Management: A Management Company referred to in the Lease, or a Right to Company Manage Company created under the Commonhold & Leasehold Reform Act 2002, to provide services and administer the terms of the Lease either directly or through Managing Agents.
• Managing Agent: A person or organisation which acts on behalf of the landlord, management company or Tenant’s Right to Manage company within their terms of reference, subject to any legal restrictions.
• Residents’/Tenants’: a group of lessees with or without a formal constitution or corporate Association status, or a recognised residents association which is ‘recognised’ by law and with a formal constitution.
• Service Charge: the amount payable by a lessee as part of, or in addition to, rent in respect of services, repairs, maintenance, insurance, improvements or costs of management. The amount payable may vary according to the costs incurred or to be incurred.
• Reserve Fund: a fund which allows the build-up of monies to pay for repair and replacement of major items or to equalise cyclical expenditure such as external decoration, avoiding excessive peaks in the Service Charges. Reference to Reserve Fund should be taken to include any sinking fund or replacement fund in existence.
• Development: any building or land that forms part of the scheme under which the Lease operates.
• S.20: Section 20 of the Landlord & Tenant Act 1985, which requires that there be consultation with the lessees in respect of certain works.
• HMO: A House in Multiple Occupation as defined by section 257 of the Housing Act 2004 and the subject of regulations referred to in that Act.
• Form LPE1: the standardised ‘Leasehold Property Enquiries’ form (from October 2013) for use when transferring and registering leasehold property.