LEASE EXTENSIONS
Why extend your LEASE ? If you are a leaseholder, chances are that at some point you will want to extend your lease. STEWART GRAY explains what you need to know
England and Wales still have a feudal land-owning system ENGLAND AND WALES still have a feudal land owning system inherited from the Normans and, as a result, all English and Welsh land is technically owned by the Crown. The land on which most property stands is held from the crown using a form of tenure called freehold. This is the nearest thing in law to absolute ownership of land. A freeholder ‘owns’ not only the surface of the land on title but landowner’s rights which extend upwards to the heavens and down to the centre of the earth. When deciding to build a house the freeholder can (with planning permission) build as many storeys as he wishes upwards or downwards and the maintenance of his entire property is his own responsibility. Having built a freehold house the property can be bought and sold with the maintenance responsibility passing along with the ownership in a relatively straightforward manner.
Flat Living
Autumn 2011
The problem arises when a freehold is divided laterally (into flats for example). If a freehold house is converted into two flats, one above the other, then the two flats cannot each be sold freehold as the ownership rights would clash. The question of maintenance also becomes complicated. Who is to be responsible, for example, for maintaining the roof? Perhaps the upper flat - but if this is a small studio in a large building such an
All English and Welsh land is technically owned by the Crown
onerous maintenance obligation would render the studio worthless. The solution is for the freehold to be retained by one entity who owns the land and is responsible for the maintenance of the commonly held parts of the building. The flats are then given long term leases of 99 years or more which can be sold to independent flat owners. The extent of each flat is described in detail on the lease and each of the flat owners maintains their own property. In addition the leaseholders each pay an agreed share of the freeholder’s service charges. This pre-agreed service charge should (in theory) allow the freeholder to maintain parts of the building not covered by leases without disputes arising over what share of maintenance should be paid by the various flats each time any work is carried out. (see pages 53-58 of this issue for more on service charges).
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