What is Leasehold Ownership
Leasehold ownership of a flat is simply a long tenancy (usually lasting 125 years) and the right to own a flat for the term of a lease.
The lease sets out your rights as the leaseholder and Gateshead Councils responsibilities to you as the landlord.
As the freeholder Gateshead Council maintains ownership of the outside structure and communal areas of the block your flat is in. Therefore we are responsible for the upkeep or maintenance of these areas and will carry out any necessary repairs and improvements.
About your lease
Your lease is a contract between the leaseholder (yourself) and the landlord (the Council). It sets out the responsibilities of the two parties, what the leaseholder must do and what the landlord is bound to do.
Your lease will contain a plan of your flat showing the boundaries of the property.
When you complete your sale you will receive a copy of your lease you should read this carefully and ask your solicitor about anything you do not understand. A simple guide to your lease will be provided by The Gateshead Housing Company.
What are Service Charges?
Service charges are your share of the costs for maintaining and managing the building your home is in.
The Gateshead Housing Company will provide most services, such as repairs, lighting, cleaning or caretaking, where these apply to your block of flats.
As a leaseholder, you have to pay a share of the cost of these repairs and services.
These costs are called service charges.
Service charges are set out in the lease for your flat, and you should make sure you fully understand them before buying a leasehold property. You can see a breakdown of your service charges and the estimated costs for the next five years on page ten of your offer notice.
How are Service Charges calculated?
The Gateshead Housing Company will send out two Service Charge bills each year, which cover the period 1 April to 31 March as follows:
Estimated Bill
This is sent in March of each year, and is an estimate of how much we expect it will cost to provide services to your block of flats. These are usually based on previous bills. It does not include a charge for major works schemes carried out to the block.
Actual Bill
You will receive this in June of each year, it will show the actual amount spent on each service in the previous year. This will include charges for any repairs and maintenance or major works that have been carried out during the year.
Your share of the cost for services and works is shown on your bill, and is usually based on the number of flats in the block.
Actual charges may increase or decrease from the estimate.
How do I pay my Service Charges?
The Estimated bill can be paid in full, quarterly, or monthly at payment offices, by direct debit, and by cheque or cash through paypoint or by salary deduction if you work for The Gateshead Housing Company or Gateshead Council.
The Actual bill is normally payable within 21 days of receipt however this bill may contain large costs for repairs and maintenance and/or major works, you may find it difficult to pay within this time.
Please contact Leasehold Services |to explain your position if this is the case.
What is a management fee and why do I have to pay it?
The management fee is a yearly charge to cover the cost of managing the leasehold service. It is based on the services provided to your block and the type of property you live in (whether you live in a low, mid or high rise property). It includes all administrative costs. It is a legal condition of the sale that you must pay the management fee.
What are Major Works?
Major Works are repairs & improvements to the property that we cannot do under normal day-to-day repair arrangements due to the amount of work involved.
We will consult you before carrying out any works where you are likely to contribute more than £250 for works and/or £100 in any one year for each and every service, such as the cost of servicing a lift.
A breakdown of the possible planned major works over the next five years for your block & the costs can be found on page eleven of your offer notice.
What should I do if I can't afford to pay my service charges/major works costs?
Before deciding to buy your home you should take into account all of the bills you will be liable to pay after the sale including service charges & major works.
We acknowledge that paying service charges & major works bills can be a significant financial strain for some leaseholders. Whilst we are unable to waive any charges unless allowed to do so by law, we do offer several repayment options to ease the burden. For further information on repayment options please contact The Gateshead Housing Company|.
After I buy my flat will the council still do repairs?
Once the sale of your home goes through you will be responsible for the upkeep & all repairs to the inside of your property. The Council will continue to maintain the outside of the building & all shared areas, a share of the costs incurred in doing this will be included in your service charges.
Repairs you will be responsible for include:
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Replacing broken glass in windows
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Decorations inside your home
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Floors, stairs, partitions, doors, woodwork inside your home
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Walls and ceilings, (plaster, tiles, plasterboard) inside your home
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Flooring (tiles, lino, woodblock and so on)
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Fittings (kitchen fittings, cupboards)
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Pipework, taps and valves inside your home
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Baths, sinks, washbasins, showers, toilets, lagging your inside pipes
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Heating and hot water systems that only you use
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Replacing locks
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Lifts inside your home
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Fences and gates that you do not share
Repairs Gateshead Council will still be responsible for include:
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Foundations
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Outside walls
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Roof, chimneys and chimney stacks
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Drains , gutters and pipes outside your home
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Outside decorations
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Decorations to entrance halls and shared areas
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Shared heating and hot water systems
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Shared lifts and door entry phones
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Shared wiring and lighting, TV aerials, lightning conductors
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Shared refuse chutes
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Shared boundary walls, fences and gates, paths
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Balconies, stairs, sheds, garages
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Shared and outside doors.
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Window frames and sills (not including glass)
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Shared water pipes, water tanks and gas pipes
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Controlled door-entry systems
Will the Council still service my gas appliances?
As a leaseholder it is your legal responsibility to ensure that your gas appliances are checked each year to make sure they are working correctly and safely. Gas leaks & carbon monoxide can kill so make sure that a Gas Safe Registered engineer checks all your appliances annually.
You must provide The Gateshead Housing Company with a copy of your gas safety certificate on an annual basis. If you do not provide the information The Gateshead Housing Company will carry out the service on your behalf and claim the costs from you.
The Gateshead Housing Company can carry out gas servicing for you for around £40.00 per appliance. Please note that the cost of the service does not include any remedial work, which may be required following the service. For more information please contact the Home Ownership Team|.
If you intend to sublet your premises by law you are required as a landlord of a lease under 7 years, to ensure all gas appliances are checked annually and issued with an appropriate certificate, you will be criminally liable if you do not do so.
Do I still get my contents insurance through the Council?
The Council has negotiated a Contents Insurance Policy for Leaseholders with Royal and Sunalliance, one of the UK's leading insurers. As a leaseholder you will have the opportunity to insure the contents of your home through the scheme.
However, you must occupy your leasehold home to be eligible to join the scheme. Leasehold flats that are 'let' cannot be considered for cover under this contents scheme.
The scheme is voluntary and you remain free to choose to make your own alternative arrangements. Full details of the scheme can be obtained from The Gateshead Housing Company|.
There are colours on my plan. What do they mean?
The colours on the plan identify your property and the communal areas in the building maintained by the Council as well as any gardens or communal land.
An explanation of the colours on your plan as well as the terms and conditions of use of the communal areas are set out in your offer on page 6.
Can I do alterations or improvements to my flat?
Before making alterations or improvements to your home you may need written permission to carry out the work.
We do not need to know about any minor work, for example internal decorating but you should ask permission for any work which affects the structure or service to the block. This is because, the landlord has an investment in the block and a responsibility to the other residents.
The outside window frames belong to the landlord. You must not replace your windows unless the landlord has given you permission in writing.
Does the loft space belong to me?
No. Under the terms of the lease even if you can access the loft from your flat the loft space will still belong to the landlord. It should not be used for any purpose including storage.
You can apply to buy the loft but the landlord does not have to sell the loft space. This is a completely separate matter to the Right to Buy as it is outside the actual tenancy that you hold. If agreed the landlord will place a value on the loft space and will formally offer the sale of the loft to you. To apply to purchase the loft space, please contact The Gateshead Housing Company|.
Can I rent my flat out after I have bought it?
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. You should contact The Gateshead Housing Company, as subletting may affect your buildings insurance.
If you sub-let, please give us your new address so that we can contact you.
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.
However, if you let someone else rent your home, you become their landlord and you could be creating a tenancy that could be difficult for you to end. You could have considerable difficulty making them leave if you wanted your flat back. You could also have problems selling your lease if you have a 'sitting tenant'.
Before you agree to rent your flat to someone else, you should look into it thoroughly. Ask the Gateshead Housing Company, Leasehold Services Team| or the Citizens Advice Bureau| what you should do to make sure you are legally protected.
It is important when taken in lodgers that you don't become overcrowded.
What is the Ground rent and why do I have to pay it?
The ground rent is a standard yearly charge for the rent of the ground that your building stands on. It is a legal condition of sale that you must pay the ground rent on the due date
By law we must give you notice that your ground rent is due. This notice must be no less than 30 days before and no more than 60 days after the day your rent is due to be paid.
Do I have to arrange my own Buildings Insurance?
The lease requires Gateshead Council to take out adequate insurance for the building and the common parts, and gives the Council the right to recover the cost through service charges.
The insurance policy covers structural damage caused by vandalism, storms, theft and subsidence.
What if I don't agree with the charges I've been asked to pay?
If you don't agree with a service charge or with a valuation for works, and you are not satisfied with The Gateshead Housing Company's response, you may want to have your case heard by the Leasehold Valuation Tribunal|.
What does the Leasehold Valuation Tribunal do?
The LVT is part of the Residential Property Tribunal Service (RPTS). The LVT acts as an independent arbitrator to decide whether service charges are reasonable.
Initially there is an application fee, which can vary between £300 and £500. The LVT doesn't have the power to award costs, so if you decide to employ professionals such as surveyors or solicitors to help your case, you will have to cover the cost of their bills yourself.