We use the term of 'homeowners' for our customers who are shared-owners, leaseholders, or fixed equity owners as these are all forms of leasehold ownership
What does being a leaseholder mean?
Any type of property can be held on leasehold terms
Leasehold is simply a long tenancy, the right to occupation and use of the building for a long period – the 'term' of the lease. This will usually be for 99 or 125 years during which the lease can be bought and sold during that term. The term is fixed at the beginning and so decreases in length year by year. The lease also defines the responsibilities of both the landlord and the leaseholder and gives details of any payments and the times they are due to be paid.
What are Paradigm's responsibilities?
In general, the ownership of the lease usually relates to everything within the four walls including floorboards and plaster to walls and ceiling, but does not usually include the external or structural walls. The structure of the building and the land it stands on is owned by the landlord, who is responsible for the structural maintenance and repair of the building.
What are your responsibilities?
The leaseholder will be responsible for keeping the inside of the flat in good order, to pay (on time) a share of the costs of maintaining and running the building, to behave in a neighbourly manner and not to do make alterations or sub-let the property without our consent. Paradigm has an obligation to ensure that the leaseholder complies with such responsibilities for the good of all the other leaseholders. All rights and responsibilities are set out in the lease.
What is ground rent?
Most leaseholders have to pay ground rent to the freeholder as one of the conditions of their lease. There are usually terms in the lease about how it is paid, when it can be increased and what could happen if you don't pay it. As leasehold is basically a tenancy, it is subject to the payment of a rent, usually the ground rent is only a small amount and less than £100 per year.
What are service charges?
Service charges cover your share of the cost of maintaining the building you live in. Most leaseholders living in blocks of flats have to pay them because it is the only manageable way to share the costs of looking after the building. It is less common for leaseholders of converted houses to have service charges. They are normally paid monthly but can sometimes be paid quarterly or half-yearly. Service charges cover things like repairs, cleaning and shared amenities such as porters and communal gardens. They sometimes cover buildings insurance as well but you may pay this separately. You normally have to pay a share of everything even if you don't use some of the services. For example, even if you live on the ground floor and never use the lift, you will probably still have to pay something towards its maintenance.
What happens if the leaseholder doesn't pay?
It is every leaseholder's obligation to pay the service charges and ground rent promptly under the terms of the lease. If they are not paid and Paradigm is able to show that the charges are reasonable, we can begin forfeiture proceedings. If approved by a Court or Leasehold Valuation Tribunal, this can lead to Paradigm repossessing the flat.
What rights does the leaseholder have?
There are a wide range of rights set out in legislation that apply to every leaseholder. However, in general, every lease will give the right of peaceable occupation of the property for the length of the lease, usually referred to as 'quiet enjoyment'. In addition, the leaseholder has the right to expect the landlord to maintain and repair the structure and manage the ‘common parts’ – ie, the parts of the building or grounds not specifically given to the leaseholder in the lease but to which there are rights of access such as communal areas and the surrounding grounds.
It is always worth checking your lease for the rights and obligations and if you have any queries contact our customer services team on 0300 303 1010 for further information.