10 March, 2022

If you live in a leasehold flat, it's important to understand the nature of this type of home ownership and to know your rights and responsibilities as a leaseholder. It's also important to know how your building is being managed, who it's being managed by and what you can do if you run into problems.

If you are a leaseholder looking for advice with regards to your rights then you should contact the Leasehold Advisory Service www.lease-advice.org on info@lease-advice.org as ARMA is not able to provide you with individual technical advice.

There is also the First Tier Tribunal Property (a judicial arm dealing with landlord and tenant matters) (www.gov.uk/courts-tribunals/first-tier-tribunal-property-chamber) or the government Ombudsman scheme that the member is required, by law, to sign up to.

ARMA do however have a self-service leasehold library with dozens of free advice guides which you are able to view and download.

In this section you can find out more about what it means to live in a leasehold flat. You can also find information about the role of managing agents and why you should use an ARMA member - so don't forget to take a look.

What is leasehold?

In its simplest form, owning a leasehold flat is a long tenancy. You have the right to occupy and use the flat for a long period of time - the 'term' of the lease. This will usually be for 99 or 125 years. As a leaseholder, you will normally own and be responsible for everything within the four walls of your flat. This will include the floorboards and plaster to the walls and ceiling. The structure, external walls and communal parts of the building, including the land it stands on, will usually be owned by the freeholder who is also the landlord. The landlord can be a person or a company including a local authority or a housing association. It's also quite common for leaseholders to collectively own the freehold through a residents' management company, effectively becoming their own landlord. This is called collective enfranchisement.

Know your lease

Your lease may be quite complicated but its fundamental role is simple. It's a contract between you and the landlord giving you conditional ownership of your flat for a fixed period of time. It sets out your contractual obligations as a leaseholder and those of your landlord so it's important you know and understand it. This will include payment of ground rent (if any) and contributions to the costs of maintaining and managing the building through service charges. The lease will also place certain conditions on the use and occupation of the flat. It's especially important to understand these before you purchase your flat. It's not uncommon for someone to move into their new home only to discover a beloved pet can't come with them because they are not allowed under the terms of the lease!

Service charges

It will normally be the landlord's responsibility for managing, maintaining and repairing the communal areas of the property. They may also arrange for other services such as insurance for the building, provision of central heating, lifts, porterage, estate staff, lighting and cleaning of communal areas. The leaseholders will pay service charges to the landlord for providing such services. Usually the charges will also include the costs of managing the building, either by the landlord or by a professional managing agent. Details of what can and cannot be charged by the landlord and the proportion to be paid by the individual leaseholders will all be set out in the lease.

Why use an Arma member?

It's worth remembering that the residential leasehold sector is unregulated. Anyone can set up as managing agent and start collecting service charges without the relevant qualifications or experience. ARMA Accredited managing agents must meet the ARMA Consumer Charter & Standards, a bespoke set of professional standards aimed at consumer protection and best practice in all areas of residential long leasehold management.
All of our members must comply with these Standards, so anyone appointing an ARMA agent to manage their property can have peace of mind that they conform to high standards.
By using an ARMA Accredited managing agent you can be confident that:

1. They have the right professional experience: every member has to prove they have at least two years' residential management experience

2. Your service charge money is being held legally and safely: all members must demonstrate they hold service charge monies in trust as required by law

3. The member has Professional Indemnity Insurance: this covers you against inadequate advice and negligence relating to a member

4. Your agent is committed to and bound by professional standards: all ARMA agents must comply with the RICS Service Charge Residential Management Code. This defines best practice in the sector.

What is right to manage?

The Right to Manage (RTM) was introduced through the Commonhold and Leasehold Reform Act 2002. It gives leaseholders the statutory right to take over the management of their property from the landlord by setting up a special company - a right to manage company.
RTM is an important right for leaseholders. They do not have to get the landlord's permission, prove any mismanagement or obtain any court order to exercise the right. But it does come with some very real responsibilities and it's not a decision that should be taken lightly.
Although the process is relatively straight forward, the qualifying rules and criteria can be complex. So we recommend anyone contemplating exercising this right should first read the detailed guide produced by the Leasehold Advisory Service (LEASE).

ARMA self-service library offers guidance to leaseholders. We would recommend that you view the documents available to see if they can assist.
If they do not, or you require further information then please contact the Leasehold Advisory Service at info@lease-advice.org. They are a government funded body who are able to assist you and they provide free information, initial advice and guidance to members of the public about residential leasehold. They are independent and impartial and all of their advisers are legally qualified.

Arma

Arma is the leading professional body for residential managing agents in England & Wales. We promote high standards of leasehold management and professionalism through advice, training & guidance.

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