RESIDENTIAL BLOCK MANAGEMENT
YOUR LEASE EXPLAINED.
There are two common models of a lease, for leasehold
mixed use developments.
Model A, is a two party lease. Usually a Landlord (Lessor)
and Leaseholder (Lessee).
themselves. Whilst every lease will be structured differently,
with experience we have come to find that there is often a
common structure used.
This is explained below.
Part 1. The expressions/particulars.
Model B, is an investment model practically used to separate the landlord from an ongoing maintenance responsibility, entrusting this to a Management Company or lessee
group. This is commonly recognised as a Tri-partite lease,
with the three parties being i) Landlord (Lessor) ii) Leaseholder (Lessee), and iii) the Residents Group (RMC or
RTM).
The investment model became more popular as a direct
result of the legislation brought into force in the mid-1980’s,
which saw a rise in leaseholder protection in England &
Wales. This shift in power consequently resulted in the role
of a freeholder being no longer an attractive prospect.
There are other common cases whereby a fourth party is
entered into the model, which is usually either a HA
(housing association) or a commercial entity. In some other
cases it can sometimes be a block managing agent.
The purpose of this article is to provide some helpful guidance on the general structure of a lease, where to find
things, and what these things might mean. This article focuses on the most common, ‘investment model’.
The ‘investment’ part of the model in effect is the ground
rent usually collected by the landlord to these agreements,
which can also provide an attractive sale opportunity.
Under tripartite leases, management companies are companies limited by shares or guarantee with its main objective to manage and maintain the common parts (entrances,
lifts, car-parks, gardens as well as the main structure of the
building itself) for the general benefit of the leaseholders. The full responsibilities of any management company
will be set out in its Memorandum and Articles of Association, as well as being contained within the tripartite leases
This is usually the section which defines the use and terminology of the expressions used throughout the lease. It’s an
imperative place to start to understand the nature, and context of the entire lease clauses.
This is usually where it tells you what the property is, what is
truly meant when any of the following phrases are used demised premises, parking space, communal areas, service
charges. This can sometimes include the bit about how much
you should pay for service related charges, and what you
should contribute towards.
Part 2. The parties and what you have essentially purchased.
This is usually the section which defines the parties, what
specifically you have purchased, upon what basis, and usually includes your ground rent information.
Ground rent is a regular, and ongoing payment made by a
holder of a leasehold property to the freeholder, for renting
the land that the leasehold property sits on.
Part 3. The schedules.
This is usually split into sections, which are commonly,

Schedule 1. The demised premises. This outlines everything you are responsible for under the duration of the
lease, like the doors, frames, and internal decorations.

Schedule 2. Rights included within the demise, or
rights to which your demise is subject. This outlines
everything you have an exclusive right to under the duration of the lease, like a right to water, light, or communal television system.

Schedule 3. Leaseholder covenants. This outlines
everything you are obligated to do under the duration of
the lease, like pay service charges, allow access to the
managing agents for inspections, repair and upkeep
your property.
RESIDENTIAL BLOCK MANAGEMENT
YOUR LEASE EXPLAINED.

Schedule 4. The rules and regulations. This outlines
everything you should and should not do, either within
the demised premises or within the shared areas.
And finally,
Schedule 5. Management Company covenants. This
outlines everything the management company is obligated
to do or perform as part of its duties. In some cases a service may only be provided upon payment of service charges.
It’s important to know when purchasing a leasehold property that there are a few clauses within a lease, that commonly are not always understood. Here is a list of a few that are
generally always included within a mixed use development
lease.
1. A right of access to the landlord or their management company to inspect the demised premises. This
means that with a reasonable amount of notice, the landlord
or their management company can ask to see inside the
property to check you are fulfilling your obligations.
2. A right for the landlord or their management company to enforce a required repair. This means that with a
reasonable amount of notice, the landlord or their management company can request repairs are undertaken, and can
in some cases do the work themselves and re-charge the
costs to you.
3. A right for the landlord to collect a reserve fund or
sinking fund towards future capital works. This means
that if the lease allows, the landlord or their management
company can collect additional expenses over and above
the day to day costs. In addition, the lease may also extends to collecting a deficit against the original budget in the
event of an overspend of expenses.
4. An obligation on the leaseholder to paint the flat or
clean the windows regularly. This means that if the lease is
definitive you might be under obligation to do a lot more than
just pay charges and expect something in return. There will
almost certainly be obligations the leaseholder must fulfil.
5. A disputes procedure. Although it is not common in all
leases, sometimes there is a section on handling disputes,
covering manager to leaseholder disputes.
6. An obligation on the leaseholder to obtain permission
when making alterations to the current layout of the
property. This usually means that you will be obligated to
obtain the landlords approval and consent before altering any
part of the demised premises. Generally, a fee is applicable
when obtaining the landlords consent.
7. An obligation not to hang or store anything outside of
the demised premises. This means storing anything outside
of the flat.
8. An obligation to carpet certain rooms inside the demised premises. This means no wooden flooring within
some parts of the property.
In the event of a lost lease agreement, you may visit
www.landregistry-deeds.co.uk/lease to enquire about obtaining a copy. Copies can be purchased ranging from £18-£50
with the option to purchase a Lease with the Leasehold Title
Register and Title Plan.
Alternatively, you may seek the advice of the managing
agents, the landlord, or your acting solicitor at purchase who
may hold a copy.
We pride ourselves on offering a market leading property
management solution. Enquiries in respect of our block management services can be made in person by calling 0208
815 1481, or via email direct to [email protected],
with prices starting from £135 per unit +vat.