Glossary of leasehold terms

Administration charge

An Administration charge is any money the landlord demands from the leaseholder for granting approvals under the lease, for the provision of information or documents, for dealing with a failure by the leaseholder to pay ground rent or service charges, or in connection with a breach of the lease.

Arrears

Money that is owing by one party to another. This will usually be an amount owing by a leaseholder to a landlord which is payable under the lease, such as ground rent or a service charge.

Breach of covenant

A breach of a clause in a lease. This could be breaking an obligation or a prohibition that is spelt out in the lease. A classic example is a covenant for a leaseholder to pay a service charge towards exterior maintenance.

Collective enfranchisement

The collective purchase of the freehold by leaseholders in a building containing flats in accordance with the 1993 Leasehold Reform Housing and Urban Development Act, as amended by the 2002 Commonhold and Leasehold Reform Act.

Consent

Where permission is needed by one party from another to carry out a certain action. An example of this could be a leaseholder requesting consent from the freeholder to carry out alterations to a flat where consent is required under the terms of the lease.

Deed of Variation

A document which supplements an existing lease putting into effect a variation to that lease. An example could be a variation allowing a leaseholder to sublet their property where previously it had been prohibited.

Dispensation

A party may apply to a court or a tribunal to avoid serving a notice under a legal procedure. If they succeed, the court or tribunal issues a dispensation from serving that notice.

An example could be a tribunal allowing a group of leaseholders to acquire the right to manage without serving a claim notice on the landlord because the landlord is absent.

Another example is a landlord applying to a tribunal to dispense with the need to serve a consultation notice in relation to major works where the works are urgent and the leaseholders will not be significantly prejudiced (eg leaseholders can demonstrate to tribunal that they would have made observations on estimates had they been properly consulted).

Forfeiture

Forfeiture means the lease can be terminated and the property revert to the freeholder. This could arise arises if the leaseholder breaches the terms of the lease.

Ground rent

A payment made by the leaseholder to the freeholder under the terms of a lease.

Insurance cover

It is common for the lease to require the whole building or a part of the building to be insured against risks such as fire, lightning, subsidence and even terrorism. Building insurance is usually but not always the responsibility of the landlord although the lease will usually require the leaseholder to pay a share of the cost.

Landlord

The party who grants the lease. There may be layers of landlords. For example the freeholder (who owns the building forever) may grant a lease of the whole building to a leaseholder who may then grant further subleases of the individual flats.

Leasehold Valuation Tribunal or Residential Property Tribunal

Previously in England, and currently in Wales, the Tribunal that hears matters that include service charge disputes and applications arising out of the enfranchisement legislation.

Leaseholder

A leaseholder is someone who owns a property on a lease, typically for 99, 125 or 999 years. The length of the lease decreases year by year until it eventually runs out.

A leaseholder is also called a tenant, but this should not be confused with short term agreements. It is essential to be familiar and understand the terms of your lease because this sets out your rights and obligations.

Recognised Tenants Association (RTA)

A tenants’ association is a group of tenants (normally leaseholders) who hold houses or flats on leases/tenancies from the same landlord on similar terms. A Recognised Tenants’ Association is one where the members have come together to represent their common interests so that the association can act on the tenants’ behalf, and which has been recognised for the purposes of section 29 of the Landlord and Tenant Act 1985. An association is recognised either by notice in writing from the landlord to the secretary of the association, or by application to the Leasehold Valuation Tribunal.

Regulation

A procedural rule that is introduced to give effect to a piece of law enacted by the government.

Service charge

A contribution payable by a leaseholder typically to a landlord, for a share of the cost of insuring, maintaining, repairing, cleaning, etc. the building.

Summary of rights

A prescribed document that must accompany a service charge demand and that sets out a leaseholder’s rights and obligations in respect of service charges generally.

Tenant

A term that can be used to describe both people that own and people who rent their property but which is more often applied to people who rent.