Date published: 19th March 2024

We are often asked why it takes longer to deal with the purchase of a leasehold flat than the purchase of, for example, a freehold house.  Hopefully, we can now explain why.  

Present property law effectively requires that flats and maisonettes be leasehold (some freehold flats do exist but nearly all lenders will not give mortgages on them). 

Providing there is a well-written lease and a properly managed building, a ‘leasehold’ flat should provide a good home and a secure investment. 

A lease gives the flat owner a right to occupation and use of the flat for a long period, namely, the ‘term’ of the lease.  The term can vary but is usually 125, 250 or 999 years, and the flat can be bought and sold during the term. 

The lease sets out, amongst other things, the covenants (or obligations) and regulations by which the flat owner must abide; the payments the flat-owner must make towards ground rent and service charges (for the cost of maintenance/repair costs to common parts, insurance etc); defines the parts of the building to which the flat owner has access and/or the use of (apart from the flat they are actually buying) and informs the flat owner of the rights of the other occupants of the building and of the landlord. 

The buyer and the lender are looking to us to ensure that the flat has a ‘good and marketable’ title.  We do this by investigating the title documents supplied to us by the Seller’s conveyancer and by making the usual searches and enquiries. 

In the case of a ‘leasehold’ flat, further enquiries must be made, for example: 

  • What is the unexpired term of the lease?  If it is less than 80 years, the lender may not provide a mortgage! 

  • Are there adequate rights for access, support, repair, and maintenance? 

  • Who is responsible for insuring the building? 

  • Can the flat owner require the landlord to enforce obligations against other occupants of the building? 

  • How much service charge has been paid in the last three years and is any major increase likely within the next two years? 

  • Is the landlord insolvent or absent? In either case who now undertakes the landlord’s responsibilities? 

  • Is a Management Company in existence? Will the flat owner become a shareholder or member in that company? 

  • Does the Building Safety Act 2022 apply to the flat? 

It is the responsibility of the Seller’s conveyancer to provide sufficient information to us to deal with the above questions and any others relevant to the transaction.  Often the Seller’s conveyancers do not have this information when first sending the contract papers to us.  They are dependent on others such as the Landlord or the Management Company to supply the information to them first before passing it onto us!  The longer it takes the Seller’s conveyancers to supply this information to us, the longer the transaction will take! 

When acting for the buyer, and to comply with the Mortgage Lender’s Handbook, we cannot exchange contracts until either we have the answers we need to the above queries or alternative methods have been used to resolve them.  One alternative method is the use of indemnity insurance.  Such insurance would be used if, for example, the landlord was absent or unresponsive.  Another alternative method is to have a Deed of Variation executed by the Seller, Buyer, and Landlord.  Such deeds are used where there is a defect or omission in the wording of the original lease.  This will involve the parties’ lawyers in agreeing the terms of the Deed of Variation, thus creating an inevitable delay. 

Unfortunately, there are no legally defined criteria as to the perfect lease.  The legal requirements of leases have tended to change over the years.  What was an acceptable form of lease when first granted 20 years ago may not be in an acceptable form today!  As such the examination and investigation of all leases takes extra time and additional effort (which is also why we make an additional charge). 

However, if all the documentation is in order, then the purchase of a flat should take no longer than the purchase of a freehold house.  Hopefully, we have given you some insight into why, on occasions, flat purchases take longer than other types of purchase. 

If you need advice on the purchase of a flat, our conveyancing experts are on hand to help. Please call us today or make an enquiry.