Leasehold handbook – Selling or letting

by The Gateshead Housing Company & filed under Owning your home - leaseholder - leasehold handbook, Owning your home - leaseholders.

Buying a leasehold flat

To let signThere are two ways you can buy the lease of a Gateshead Council flat:

  • Under the ‘Right to Buy’ scheme if you are a council tenant and are already living in the flat. However, there are certain criteria you must meet
  • By buying the lease from the present leaseholder, if the flat has already been bought under the Right to Buy scheme and is being sold again.

In both cases we recommend that you either get a solicitor or a licensed conveyancer to act on your behalf to protect your interests. Solicitors must be members of the Law Society. Conveyancers must be members of Council for Licensed Conveyancers.

If you are thinking of buying a leasehold flat it is important to find out, what the current and future service charges are likely to be, if there are any charges owing on the property and if there are any major works planned (eg lift or roof replacement) that could be charged after your purchase.

Your solicitor will usually request this information from the seller’s solicitor.

If you buy the lease from the present leaseholder your solicitor must advise us within 21 days of the transfer taking place.

For more information about buying the lease to your property under the Right to Buy scheme please email Gateshead Council’s Home Ownership Team.

You can also read these leaflets:

  • Thinking of buying a council flat? (Communities and Local Government Guide)
  • Your Right to Buy your Home (Communities and Local Government Guide).

Selling your lease or leaving it in your will

You have the right to sell your lease as long as the sale is carried out legally and we are notified within 21 days of the sale taking place. You can also leave it to someone in your will.

If you sell your flat within 10 years of the start of the lease you must offer Gateshead Council the chance to buy it back from you first.

Pre-sale enquiry pack

When your sale has been agreed, the buyer’s solicitors should request information about your service charges, future planned major works, and buildings insurance.

Your solicitor will need to provide this information to the buyer’s solicitor and should contact us on your behalf to obtain the relevant details.

The ‘Presale Enquiry Pack’ includes the following information:

  • Details of the landlord and where to serve notices
  • Details of the managing agent and their role
  • Notice of assignment/charge fees
  • Building insurance cover
  • Major Works planned – eg lift or roof replacement
  • Annual service charges and planned major works estimates
  • Ground rent fees
  • Repairs and Maintenance charges
  • Painting charges and details of the scheduled programme
  • Reserve sinking/fund details
  • Breaches of covenants within your block
  • Copies of any consultation notices in relation to major works which are yet to be billed
  • Articles and Memorandum of Association in relation to the Managing Agent.

Your solicitor should request this pack as soon as possible to avoid undue delays. We aim to respond to these enquiries within seven working days.

There is an administration fee for providing this pack.

Email the Leasehold Team or call 0191 433 5395 for our current fee.

In some instances of remortgage, the above information will also be required. This is also subject to an administration fee.

Service charges

Your solicitor and the buyer’s solicitors should agree with you the payment due for outstanding service charges up to the date of sale, and arrange for further payment for those that have not yet been billed.

Registering a sale

This must be done by way of a formal notice of assignment served by the purchaser’s solicitor to Gateshead Council’s Corporate Services and Governance, Legal, Democratic and Property Services Department.

There is a fee for serving a Notice of Assignment. Email the Leasehold Team or call 0191 433 5395 for our current fee.

A fee is also charged to record the interest of a bank or building society that has granted a mortgage against the lease.

We will need the notice of assignment in order to update our records.

If we do not receive legal notice, you will still be liable in law for any charges against the property.

If you die, and you have not left the lease to anyone in your will, your executors will have to decide what to do with the lease.

Any service charges still unpaid will be charged against your estate. We recommend that you make a will if you have anyone you would want to leave your flat to, such as your partner or your children.

Paying back discount

Under Right to Buy legislation there is a discount repayment period of five years. This means if you sell your home within this period, you will have to pay back some or all of the discount you received.

The rules of liability to repay discount are determined in your lease.

If you would like to know how much discount you would be liable to pay, email Gateshead Council’s Home Ownership Team.

Moving out temporarily

If you are moving out of your leasehold property, and it is going to be empty for a period of time, you should provide us with your contact details or leave your address with a neighbour or the police in case of an emergency.

You will have to pay your service charges while you are not resident within the property.

Be aware that if you leave your home for 30 days or more your building insurance may be affected.

Buying the freehold of your block

The Leasehold Reform Act 1993 (as amended by the Commonhold and Leasehold Reform Act 2002) provides the right upon qualification for you, through collective enfranchisement, to buy the freehold of the block you live in from the Landlord.

Leasehold Advisory Service – information on collective enfranchisement

Before deciding on an application to purchase the freehold of your block, please consider:

Gateshead Council would no longer be your landlord and as such you would all be responsible for the management, maintenance and insurance costs for your block and could not involve us if any neighbour disputes arose.

If you wish to pursue the freehold purchase, instruct your solicitor to contact Gateshead Council’s Legal Team on 0191 433 2156.

Buying the loft space in your home

The loft space above leasehold flats is not sold with the property and remains the property of Gateshead Council.

Gateshead Council has agreed to consider the sale of loft space, subject to certain conditions.

The Gateshead Housing Company and Gateshead Council will establish if the loft space is suitable for sale.

Loft spaces not eligible for sale:

  • Those in multi-storey flats
  • Those that require access through a communal entrance in the hallway.

How much will it cost?

The loft will be inspected by the housing company to ensure that it is not needed for communal purposes such as shared water tanks and that access for maintenance is not obstructed.

The cost of separation of any shared facilities will be your responsibility. There is a fee charged for the pre inspection which is non-refundable.

The sale price will be agreed by Gateshead Council and they will make the final decision on the sale. If the sale is agreed a lease will be completed, which will run alongside the lease for your flat.

The Gateshead Housing Company will carry out a post inspection to ensure that all works are carried out to their satisfaction. You will be responsible for the cost of this inspection, which will be payable with the purchase price on completion of the transaction.

If any further works are considered necessary following the inspection, you will be responsible for the costs incurred, including a follow up inspection fee.

You will be responsible for obtaining the necessary planning permission and building regulation consents.

Are there any criteria for the use of the loft space?

Yes, the flat must remain as one dwelling. It cannot be subdivided and must be occupied by a single family or individual multiple occupation is strictly prohibited.

Application form to purchase loft space

What about maintenance?

The Gateshead Housing Company, on behalf of Gateshead Council, will continue to have responsibility for the external aspect of the building and internal beams.

If any work is required to the internal beams you must allow access to the loft area and you will be responsible for the removal and reinstatement of any coverings to the floors, walls and ceilings.

For an application form or further information email the Leasehold Services Team or call 0191 433 5395.

Subletting your home to lodgers or subtenants

A lodger is someone who shares your home in the same way as a member of your family. A subtenant is someone who rents your flat when you are not living in it.

Under the terms of your lease you have the right to sublet your property. However, as a requirement of your lease, you must give to the Council the original (or a certified copy) of any sublease you may grant. You must do this within 21 days after the date of the sublet and register it with the Council together with the Council’s registration fee. Email the Leasehold Team or call 0191 433 5395 for our current fee.

Consider the following if you are thinking about subletting your property:

  • You must tell us every time you sub-let your property within 21 days of letting it, and you must provide a copy of your tenancy agreement along with the registration fee.
  • You should give us a contact phone number so we can get in touch with you in case of an emergency (eg if there is a leak)
  • You are still responsible for paying service charges and ground rent. As a result, you must let us know the address to send invoices to
  • It is your responsibility to ensure that your tenant(s) comply with the terms of the lease. If they do not, any action taken will be against you as the registered leaseholder
  • If the property is left empty for any length of time, you must let us know as this may affect your buildings insurance cover
  • You should get the permission of your bank or building society as it may be a condition of your mortgage that you live in the property
  • You should get advice from your home contents insurers. If you do not, you may find that you are not covered for any claim you make
  • If your mortgage lender or landlord repossessed your flat, your subtenant or lodger could be evicted
  • If you let someone else rent all or part of your home, you become their landlord and you could be creating a tenancy that could be difficult for you to end
  • You could also have problems selling your lease if you have a ‘sitting tenant’
  • It is important when taking in lodgers that you do not become overcrowded.

Before you agree to rent your flat to someone else, you should look into it thoroughly. The Citizens Advice Bureau can advise you what you should do to ensure you are legally protected.

If you intend to sublet your property email the Leasehold Services Team.

See also