Landlord blog: The perils of being a leasehold landlord
Published: 21/03/2014
According to figures around 10% of UK property is leasehold. However when it comes to letting a leasehold property a landlord can find themselves at the mercy of the freeholder and end up with some rather disgruntled tenants. Rob Denman discusses further in his latest blog.
“When it comes to letting property, a landlord has certain responsibilities they must live up to. They must, for example, have a gas safety check every year. They need to protect a tenant’s deposit and provide them with the prescribed information. And they also need to make sure all gas, water and electricity supplies are in good, working order.
“However, even with the very best of intentions, a landlord letting a leasehold property can often fall short of these responsibilities and through no fault of their own.
“You see when it comes to owning leasehold property you can often find yourself reliant on the freeholder to carry out certain repairs.
“In a recent example a landlord received a complaint from their tenants that the radiators in the property were not heating up sufficiently. Upon closer inspection the landlord discovered the problem lay with the boiler. However, given that the boiler was located in the basement and serviced the entire property, the responsibility of resolving the issue fell on the freeholder.
“Despite many attempts the landlord was constantly ‘fobbed off’ by the freeholder and despite their best efforts to appease the tenants – they bought portable heaters – they started withholding part of the rent in protest and to cover their increased electricity bills ironically bought on by the substitute heaters.
“So what is a landlord to do in this situation? They are bearing the financial brunt of a situation which is beyond their control.
“Well job one is to protect yourself from a potential claim from the tenants. To do this you’d need to be able to demonstrate you’ve done everything you can to sort out the problem. This would include having written evidence, such as letters to the freeholder, alerting them to the problem and requesting it be fixed. You may also need to threaten legal action if the work is not undertaken.
“However this does not resolve the real issue; the boiler remains broken, the tenants remain irritated and the landlord remains out of pocket.
“While the landlord may have tried repeatedly to contact the freeholder, often a letter from a solicitor can remind them of their responsibilities under the terms of the lease and give them a firm push in the right direction.
“This brings us onto the tenants withholding rent. Tenants have the common law right to ‘set off’ the costs they incur for property repairs, or in this case lack of repairs, from their rent provided that they have given the landlord sufficient notice of the required repairs and those repairs have not been carried out.
“This is obviously a tricky situation given that the landlord’s hands are somewhat tied but the tenant is still receiving a substandard service and can therefore use this as a ‘bargaining tool’. However should this continue after the problem has been addressed then the landlord could have grounds to regain possession of the property.
“On a professional and personal level, I can cope with an endless to do list. But what really frustrates me is when your fate is in the hands of someone else and it’s preventing you from getting what needs to be done done! Sadly this can be a frequent feeling for a landlord with leasehold property.“One potential solution though; a leaseholder is allowed, at any point, to buy the freehold. If you own a leasehold house, you can do this individually. However if the leasehold property is a flat, you will need to purchase the freehold collectively with the other flat owners. You will then be responsible for the upkeep of the property. Yes this will place further onus on you but at least your fate is in your own hands.
“If you’d like to know more about purchasing the freehold or want to find out what your rights are as a leaseholder, have a read of our free guide to leasehold property, lease extension and enfranchisement. And should you wish to go on buy the freehold, or just extend the lease, as a member of the Association of Leasehold Enfranchisement Practitioners (ALEP), we will be able to help you with this.”
Content correct at time of publication