Leaseholder information

Buying a leasehold flat

There are two ways you can buy the lease of your flat:

• Through the right-to-buy scheme, if you are a council tenant and you are already living in the flat (there are certain conditions you have to meet)
• By buying the lease from the present leaseholder (if the flat has already been bought under the Right to Buy and is being sold again).

In both cases you should get a solicitor to deal with all the legal documents and to protect your interests. It is important that you know what charges are owed on the property so that you can make sure they are paid before you buy it. If the previous leaseholder doesn’t pay any outstanding charges before you buy the
property, you may have to pay them. If you are buying the property from us and are therefore the first leaseholder, we will deal with any outstanding charges as part of your Right to Buy application.

If you bought the lease from the previous leaseholder, you must write to our legal department, giving the names of the sellers, the names of the buyers, the name of any new lender (as appropriate), and the date of the change. A fee is payable for the change of lease. For more information, call (0191) 643 7539.

Selling your lease, or leaving it in your will

You have the right to sell your lease as long as the transfer is done properly. You can also give it to someone, or leave it to someone in your will. For up to 10 years after buying the property, the owner must tell us that they intend to sell the property and must offer the property to us first, at the full market value.

Your solicitor should find out about the ground rent, service charges and insurance policies, so that these can be taken into account when transferring the lease to the new leaseholder. We will charge a fee to register a transfer and to record the interest of the bank or building society you have used to borrow money to buy the lease, and any information about past, present and future work on your property. If you sell your lease within five years of buying it, you may have to repay some or the entire discount you received. For advice on this please contact us on (0191) 643 7539. 

If you sell your lease or leave it to someone, you must make sure that it is all done legally to protect your interests and the interests of the person you are selling or leaving it to. Unless there is a proper legal document to show that someone else is now the leaseholder, you will still be legally liable for any charges for the property.

If you die, and you have not left the lease to anyone in your will, your executors will have to decide what to do with the lease. Any service charges still unpaid will be charged against your estate. If you have anyone you would want to leave your flat to, such as your partner or children, you should consider making a will.

Buying the freehold of your block

If at least two-thirds of the residents in your block are leaseholders, you can apply jointly to buy the freehold of your block and manage it yourselves. This is called enfranchisement. If you and your neighbours qualify to buy the freehold of your block under the enfranchisement rules, we cannot refuse to sell
it to you.

Some things you should consider when buying the freehold of your block

• You would own the structure of the building, jointly with your neighbours and you would need to form a management committee to manage the block.
• As we would no longer be your landlord, you would all be jointly responsible for the maintenance and management costs for your block
• If you get on well with your neighbours, you would have more say in the way your block is managed and the money that is spent on it.
• If the block still had at lease one rented council flat, someone from the council would represent us on your management committee. 

If you would like more information, contact us on (0191) 643 7539.

Renting your home - lodgers and sub-tenants

A lodger is someone who pays you to share your home. A subtenant is someone who rents your flat when you are not living there. If you have a mortgage, you will need to get permission from the lender before you can rent your flat. 

You have the right to take in lodgers or rent your flat to anyone you want to. You do not have to ask our permission, but you must let us know. If you sub-let, please give us your new address so that we can contact you. It will be your responsibility to ensure that your tenants keep to the terms of the lease, as you are responsible for what they do.

Lodgers and sub-tenants do not have the same rights as you. So if your mortgage lender or landlord repossessed your flat, they could be evicted. It is important that when taking in lodgers your home does not become overcrowded.

Remember that if you let someone else rent all or part of your home, you become their landlord and you could be creating a tenancy, which could be difficult for you to end. You could have considerabledifficulty making them leave if you wanted your flat back. You could also have problems selling your lease if you have a ‘sitting tenant’ (a tenant who has the right to stay). You are responsible for making sure that gas fires and boilers are kept in good order and checked for safety at least every 12 months. 

You must keep a record of these checks, which must be done by a Gas Safe contractor. Before you agree to rent your flat
to someone else, you should look into it thoroughly. Ask your solicitor or the Citizens Advice Bureau what you should do to make sure you are legally protected.

Losing your home by forfeiture or repossession

There are some circumstances when your mortgage lender or we could apply to the courts for possession of your home 

Forfeiture

Forfeiture is where we apply to the court to end your lease because you have broken the lease conditions. This could happen if:

• You do not pay your service charges
• You cause nuisance and harassment to your neighbours

If the court decides that you have seriously broken the terms of your lease, it may end the lease and give us possession of your flat. 

You would lose your home and would not usually get any payment or compensation. 

Forfeiture is a drastic action. As a responsible landlord, we only use it when we have to, to protect our interests, our tenantsand other leaseholders. If a resident has not paid their service charges, we will always try to help them if they have genuine financial problems. Before applying for forfeiture for unpaid service charges, we would have to satisfy a Leasehold Valuation Tribunal that the charges were reasonable and the leaseholder had made no attempt to pay them.

Repossession by a mortgage lender

If you have taken out a mortgage to buy your lease, your mortgage lender can apply to the courts for repossession if you do not pay your mortgage. If the court grants them possession, they have the right to evict you, sell your lease and take what you owe them out of the money they got from the sale. They must give you anymoney that is left over, unless you owe money to someone else, such as service charges or any discounts due to us. 

If you have problems paying your mortgage or service charges, ask someone for help. Don’t leave it until you are about to be evicted. We will always try to make an arrangement to help you pay your service charges, and mortgage lenders will always discuss terms for making mortgage payments.

You should seek legal advice if you think you are at risk of losing your home! You can also visit the Citizens Advice Bureau. Don’t leave it until it is too late!

Claiming benefits

If you are on a low income and are having difficulty paying your service charges or Council Tax, find out whether you are entitled to any benefits. Leaseholders cannot get Housing Benefit but you may be entitled to:

• Income support
• Council Tax Benefit
• Council tax discounts (if you live on your own). 

To find out more about Council Tax discounts and reductions. Please call in to your local Customer Service Centre or call us on 0345 2000 102.