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Glossary

  • a

  • Adjudication
    A judgement or a decision. This could be by a Leasehold Valuation Tribunal (properties in Wales only), a First-tier Tribunal (Property Chamber) (properties in England only) or a court.
  • Administration charge
    An Administration charge is any money the landlord demands from the leaseholder for granting approvals under the lease, for the provision of information or documents, for dealing with a failure by the leaseholder to pay ground rent or service charges, or in connection with a breach of the lease. More information you might find useful: Service Charges and other issues: Administration charges What can I do if I disagree with an administration charge? More Frequently Asked Questions on Administration charges
  • Alternative Dispute Resolution
    A variety of processes designed to help resolve conflicts and disputes in an informal and confidential fashion in order to avoid going to a court or a tribunal. Mediation is a common example. More information you might find useful: I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative?
  • Appeal
    The act of challenging a decision of a legal authority to a higher legal authority with a view to reversing it. For example it is possible to appeal a First-tier Tribunal (Property Chamber) decision to the Upper Tribunal (Lands Chamber) on certain grounds. More information you might find useful: I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative? Residential Property Tribunal (external website) More Frequently Asked Questions on Application to the First-tier Tribunal (Property Chamber)
  • Appointment of a manager
    This is a remedy available under the Landlord and Tenant Act 1987. It allows leaseholders of flats, under certain circumstances, to apply to a First-tier Tribunal (Property Chamber) for the appointment of a new manager. This means the landlord remains the same but the manager will be different. The new manager will be accountable to the Tribunal. The right to seek the appointment of a manager from the Tribunal is not available where the landlord is a local authority, a registered provider (formerly known as housing associations) a fully mutual housing association or a charitable housing trust. You are likely to require the services of a solicitor and a managing agent. More information you might find useful: Application to the First-tier Tribunal (Property Chamber): The appointment of a manager Application Form - Application by a Tenant for the Appointment of a Manager or for the Variation or Discharge of an Order Appointing a Manager
  • Arbitration
    A form of dispute resolution involving an independent arbitrator. Arbitration clauses can be found in some residential leases. They are sometimes seen as a way of providing a legal decision without going to court and can be less formal than court. More information you might find useful: I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative?
  • Arrears
    Money that is owing by one party to another. This will usually be an amount owing by a leaseholder to a landlord which is payable under the lease, such as ground rent or a service charge.
  • b

  • Barrister
    A type of lawyer who specialises in advocacy and representing clients in court. In practice, a client will usually instruct a solicitor to deal with a case who may then instruct a barrister to represent the client at court.
  • Breach of covenant
    A breach of a clause in a lease. This could be breaking an obligation or a prohibition that is spelt out in the lease. An example is a covenant for a leaseholder to pay a service charge towards exterior maintenance.
  • c

  • Claimant
    The accuser or the complainant that initiates legal action.
  • Collective enfranchisement
    The collective purchase of the freehold by leaseholders in a building containing flats in accordance with the 1993 Leasehold Reform Housing and Urban Development Act, as amended by the 2002 Commonhold and Leasehold Reform Act.
  • Commission
    In a residential leasehold context this often refers to commission on an insurance premium that is paid to a managing agent or landlord for using a particular policy provider. It will usually be a percentage of the premium.
  • Commonhold
    An alternative form of ownership to leasehold and freehold where the freehold in the land is registered as commonhold. The commonhold is owned by unit holders and it is governed by a commonhold community statement. This is similar to co-propriété in France or co-ops in North America. Further information: Commonhold advice guide
  • Compulsory acquisition order
    Part III of the Landlord and Tenant Act 1987 (the 1987 Act) enables leaseholders to acquire the freehold of their building where a landlord is in consistent breach of its management obligations over a period of time. A compulsory acquisition order is obtained by application to the County Court.
  • Consent
    Where permission is needed by one party from another to carry out a certain action. An example of this could be a leaseholder requesting consent from the freeholder to carry out alterations to a flat where consent is required under the terms of the lease.
  • Consent order
    An order of the court outlining an agreement reached by parties to litigation.
  • Conveyancing
    The process of transferring a legal title to property from one party to another. It is advisable to engage a solicitor when buying or selling property.
  • Counterclaim
    A cross-claim brought by a defendant. This is not a defence to a claim already made against the defendant but a new claim from the defendant against the claimant.
  • Covenant
    A lease covenant describes an obligation owed by one party to another. Examples: an obligation by a landlord to insure a building or for a leaseholder to obtain the landlord’s consent before subletting.
  • d

  • Deed of Variation
    A document which supplements an existing lease putting into effect a variation to that lease. An example could be a variation allowing a leaseholder to sublet their property where previously it had been prohibited.
  • Defendant
    The person against whom a court action has been brought.
  • Deferment
    In the context of freehold purchase or lease extension, deferment refers to compensation which is payable to the landlord for future losses resulting from the sale or extension, such as the loss of ground rent.
  • Demised premises
    What a leaseholder owns is often defined in the lease as the “Demised Premises”. The leasehold ownership of a flat usually relates to everything within the four walls of the flat, including floorboards and plaster to walls and ceiling, but does not usually include the external or structural walls. A garden can be included, unless it is a communal garden for the building.
  • Development value
    A factor taken into account for assessing freehold purchase of flats and houses. It refers to the value of any potential development leaseholder(s) can do following acquisition of the freehold. For example, leaseholders acquiring the freehold of a building may be able to unlock value by converting the property back into a single house.
  • Directions
    Directions are issued by a court or a tribunal to parties in a case. They may relate to the exchange of information and the general conduct of the case itself. More information you might find useful: Application to the First-tier Tribunal (Property Chamber) I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative? Residential Property Tribunal (external link) Tribunal Application Forms More Frequently Asked Questions on Application to the First-tier Tribunal (Property Chamber)
  • Dispensation
    A party may apply to a court or a tribunal to avoid serving a notice under a legal procedure. If they succeed, the court or tribunal issues a dispensation from serving that notice. An example could be a tribunal allowing a group of leaseholders to acquire the right to manage without serving a claim notice on the landlord because the landlord is absent. Another example is a landlord applying to a tribunal to dispense with the need to serve a consultation notice in relation to major works where the works are urgent and the leaseholders will not be significantly prejudiced (eg the leaseholders can demonstrate to the tribunal that they would have made observations on estimates had they been properly consulted).
  • e

  • Enfranchisement
    The purchase of a freehold interest in a house where the leaseholder of the house may buy the freehold. Can also be a building containing flats, where leaseholders get together to exercise a right to buy the freehold.
  • Estate management scheme (EMS)
    An EMS is a scheme that regulates the use or appearance of a property that is within a specified area. An EMS allows the landlord to retain some management control over properties, amenities and common areas, where the freehold has been sold to the leaseholders. These schemes were either made under Section 19 of the Leasehold Reform Act 1967, or under Chapter 4 or Section 93 of the Leasehold Reform, Housing and Urban Development Act 1993. Such schemes may be registered in the local land charges register. Therefore to find out if your property falls within the areas of an EMS we recommend you contact your local council.
  • Event fee / Exit fee
    A fee payable under a term of or relating to a residential lease of a retirement property on certain events such as resale or sub-letting. Event fees may be referred to by a variety of names including exit fees, transfer fees, deferred management fees, contingency fees and selling service fees.
  • f

  • Fire door
    A flat entrance door leading to shared or communal areas and needed to prevent fire and smoke from spreading to those areas and the rest of the building. Some internal doors, such as a kitchen door, can also be a fire door. More information on fire doors More information you might find useful: Who owns and is responsible for the fire door? What are the requirements for a fire door to comply with current Building Regulations? More Frequently Asked Questions on Fire safety
  • Fire risk assessment (FRA)
    A suitable and sufficient review undertaken of a building to assess it for fire risk, and, where necessary, provide recommendations to make it safer if need be. It is required by Paragraph 9 of the Regulatory Reform (Fire Safety) Order 2005 and it is down to the Responsible person to make sure the building has a valid FRA.
  • First-tier Tribunal (Property Chamber)
    The First-tier Tribunal (Property Chamber) has 5 regional offices throughout England that deal with settling of disputes in relation to leasehold property and the private rented sector. They deal with various matters including service charge disputes, lease variations and the determination of premiums for freehold purchase and lease extensions. This tribunal covers matters previously heard by the Leasehold Valuation Tribunal in England. More information you might find useful: Application to the First-tier Tribunal (Property Chamber) I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative? Residential Property Tribunal (external link) Tribunal Application Forms More Frequently Asked Questions on Application to the First-tier Tribunal (Property Chamber)
  • Fixed administration charge
    An administration charge that is fixed by the lease. For example, a lease might expressly state how much a leaseholder is obliged to pay for a licence to sublet. Most administration charges specified in leases tend to be variable. More information you might find useful: Service Charges and other issues: Administration charges What can I do if I disagree with an administration charge? More Frequently Asked Questions on Administration charges
  • Forfeiture
    Forfeiture means the lease can be terminated and the property revert to the freeholder. This could arise if the leaseholder breaches the terms of the lease. An example could be a failure by a leaseholder to maintain their flat. The law restricts the use of forfeiture even where the lease has been breached; however, if you find yourself in this situation you should seek legal advice. If an alleged breach is not admitted or agreed by the leaseholder the landlord will have to apply to the First-tier Tribunal or a court for a determination of the breach before they can start any forfeiture action.
  • Freehold
    The ultimate title in property. By being the owner of a freehold you own the building, and the land it stands on, outright and forever.
  • Freeholder
    Owns the freehold of a property which can include a building and other property or land. In a block of flats, for example, the freeholder would own the land and the actual building. A leaseholder will own a flat within that property on a lease for a fixed length of time, but the freeholder will own the property outright. The freeholder is usually responsible for the repair and maintenance of the exterior and common parts of the building. At the end of the lease, the flat ownership reverts to the freeholder. A freeholder is also commonly referred to as the landlord.
  • g

  • Ground rent
    A payment made by the leaseholder to the freeholder under the terms of a lease.
  • Grounds
    Relates to matters and issues that are being relied on by a party in order to achieve a specific outcome. This could be, for example, appealing a First-tier Tribunal decision. These cases can be appealed to an Upper Tribunal (Lands Chamber). One possible ground of appeal here could be where it is believed the Tribunal wrongly interpreted or wrongly applied the relevant law. More information you might find useful: Application to the First-tier Tribunal (Property Chamber) I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative? Residential Property Tribunal (external link) Tribunal Application Forms More Frequently Asked Questions on Application to the First-tier Tribunal (Property Chamber)
  • h

  • Headlease
    This is usually a superior lease over a building. Out of this headlease subleases are granted. The common scenario is a headlease over a building containing flats which in turn grants subleases to individual flats in a building.
  • Headlessee
    The person/entity who holds a headlease.
  • Hope value
    The value that can be attached to potential benefits leaseholders will gain when they buy the freehold from their freeholder. For example, when leaseholders buy the freehold they may gain a benefit where a leaseholder who did not participate in the purchase pays the new freeholder money for a lease extension.
  • i

  • Indemnity
    The right to be compensated for the loss that has occurred or due to occur from acts of another party.
  • Initial notice
    A notice given to a freeholder by leaseholders of flats in a building informing the freeholder they are acquiring the freehold in accordance with the 1993 Leasehold Reform Housing and Urban Development Act. This notice is given in accordance with Section 13 of the 1993 Act.
  • Insurance cover
    It is common for the lease to require the whole building or a part of the building to be insured against risks such as fire, lightning, subsidence and even terrorism. Building insurance is usually but not always the responsibility of the landlord although the lease will usually require the leaseholder to pay a share of the cost.
  • l

  • Landlord
    The party who grants the lease. There may be layers of landlords. For example the freeholder (who owns the building forever) may grant a lease of the whole building to a leaseholder who may then grant further subleases of the individual flats.
  • Lease
    The legal document that allows the holder to occupy a property for a specific period of time. It contains the terms of the contractual arrangement, such as what landlord costs can be recharged to leaseholders via a service charge, any restrictions on the leaseholder’s ability to sublet or make alterations.
  • Lease renewal (lease extension)
    A residential lease is granted for a specific term. At the expiration of this term, the property reverts to the landlord. Once a lease has been granted the term immediately begins to get shorter. If you wish to sell a leasehold property, you may need to extend the lease in order to maintain its value.
  • Lease variation
    If all the parties to a lease are unhappy with the terms of the lease they can agree to vary them. Alternatively, only one of the parties to a lease can seek a variation under Part IV of the Landlord and Tenant Act 1987 by application to the First-tier Tribunal (Property Chamber).
  • Leasehold
    Where there is a lease of the property it is called leasehold property. This means that the property is owned for a set period of time.
  • Leasehold Valuation Tribunal
    Previously in England, and currently in Wales, the Tribunal that hears matters that include service charge disputes and applications arising out of the enfranchisement legislation.
  • Leaseholder
    A leaseholder is someone who owns a property on a lease, typically for 99, 125 or 999 years. The length of the lease decreases year by year until it eventually runs out. A leaseholder is also called a tenant, but this should not be confused with short-term agreements. It is essential to be familiar and understand the terms of your lease because this sets out your rights and obligations. More information you might find useful: Living in Leasehold Flats Security of tenure when the lease runs out
  • Local Fire and Rescue Authority
    The main body responsible for enforcing the provisions of the Regulatory Reform (Fire Safety) Order 2005. (“the 2005 Order”) Paragraph 25(a) of the 2005 Order
  • Long leasehold
    A lease that was originally granted for a term of more than 21 years.
  • m

  • Marriage value
    Marriage value is the increase in the value of the property following the completion of the lease extension, reflecting the additional market value of the longer lease. In that this potential ‘profit’ only arises from the landlord’s obligation to grant the new lease, the legislation requires that it be shared equally between the parties. The calculation of the marriage value, according to Schedule 13, is the difference between two aggregate amounts, which are: the value of the leaseholder’s interest under the present lease plus the value of the landlord’s interest prior to the grant of the new lease plus the value of any intermediate interests the value of the leaseholder’s interest with the new lease plus the value of the landlord’s interest once the new lease is granted plus the value of any intermediate interests (if remaining) The legislation stipulates that where the unexpired term of the lease exceeds 80 years the marriage value shall be taken to be nil. In other words ,no marriage value is payable where the lease exceeds 80 years when the application to extend is served. Taking the figures from the example, the calculation will be: leaseholder’s present interest = £150,000 plus landlord’s present interest = £6,600 = £156,600   leaseholder’s new interest = £165,000 plus landlord’s new interest = £74 = £165,074 The marriage value is therefore £165,074 minus £156,600 = £8,474 Taking the 50:50 split between the landlord and the leaseholder, the leaseholder would have to pay half this figure – £4,237 – in addition to the reduction in the landlord’s interest. In this example it can be seen that marriage value can considerably exceed the value of the landlord’s interest. Its calculation is dependent upon the estimated increase in value of the flat and, clearly, the lower that increase the lower will be the marriage value. This is an area where the input of a valuer with local knowledge is of paramount importance to both parties in order to provide substantive comparable evidence of the local market and how, if at all, flat values will be affected. The longer the current lease the lower the latent marriage value may be, until eventually it becomes negligible.  
  • Mediation
    A way of resolving disputes through effective communication and compromise. Mediation involves a third party acting as a go-between to ensure the parties are able to communicate with one another. More information you might find useful: I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative?
  • n

  • Nominated insurer
    A lease may require a leaseholder to insure the building or part of the building. Sometimes, and in particular with leasehold houses, the leaseholder may be obliged to insure with an insurer approved or nominated by the landlord.
  • Notice of claim
    A notice claiming a legal right granted by legislation such as the right to a new longer lease under s.42 of the Leasehold Reform Housing and Urban Development Act 1993, the right to manage under s.79 of the Commonhold and Leasehold Reform Act 2002 and the right to purchase the freehold of a leasehold house under the Leasehold Reform Act 1967.
  • o

  • Order of appointment
    Where the leaseholders of a block of flats have applied to the First-tier Tribunal (Property Chamber) in England or the Leasehold Valuation Tribunal in Wales for a manager to be appointed under Part II of the Landlord and Tenant Act 1987 the Tribunal can, if satisfied that the necessary grounds have been made out, and where it is just and convenient to do so in the circumstances, make an order appointing a manager.
  • p

  • Participation agreement
    Used to record the terms on which a leaseholder joins a Collective Enfranchisement or Right of First Refusal claim. For example, it will usually set out how much each leaseholder is liable to contribute to the purchase price.
  • Preliminary notice
    Before making an application to the First Tier Tribunal (Property Chamber) for the appointment of a manager or an acquisition order under the Landlord and Tenant Act 1987, a leaseholder may be obliged to serve a preliminary notice on the landlord setting out the landlord’s failures and giving them a reasonable time to remedy them.
  • Premium
    The sum of money that the leaseholder pays in exchange for a longer lease.
  • r

  • Recognised Tenants Association (RTA)
    A tenants' association is a group of tenants (normally leaseholders) who hold houses or flats on leases/tenancies from the same landlord on similar terms. A Recognised Tenants' Association is one where the members have come together to represent their common interests so that the association can act on the tenants' behalf, and which has been recognised for the purposes of section 29 of the Landlord and Tenant Act 1985. An association is recognised either by notice in writing from the landlord to the secretary of the association, or by application to a First-tier Tribunal (Property Chamber). More information you might find useful: Application form for Recognition of a Tenants' Association Template document - Request Notice - Secretary of a Tenants’ Association requiring the landlord to provide information about tenants who are not members of the association Template document - Duties of a landlord Guidance on applications for a certificate of recognition of a tenants’ association and orders relating to the provision of information. General information about the process Service Charges and other issues
  • Regulation
    A procedural rule that is introduced to give effect to a piece of law enacted by the government.
  • Relativity
    The relative value of a property held on an existing long lease compared to its freehold value. For example, Property A has 65 years remaining and based on the available evidence has a relative value of 80% (£86,400) when compared to its freehold value (£108,000). See this First-tier Tribunal decision for a further example. In order to work out the marriage value payable during a lease extension or collective enfranchisement it is necessary to consider the value of the remaining years on the lease (its unextended value).
  • Rent demand
    Any demand for rent payable under a lease. For ground rent the demand must be in a prescribed form.
  • Report on title
    When a solicitor acts for someone buying a property they will report on the status of the property to the buyer and, if applicable, to the buyer’s mortgage lender.
  • Responsible person (RP)
    The person responsible for making sure that: relevant fire safety duties are carried out any action is taken to stop fires happening injury or death is prevented if a fire does actually happen It is the RP who should ensure the building has a valid Fire risk assessment. In a block of flats the responsible person is typically The freeholder/landlord Residential management company The managing agent The Right to Manage Company In a block of flats the RP is only liable for the common arears, such as corridors, passages, landings and stairwells. The RP is defined in Paragraph 3 of the Regulatory Reform (Fire Safety) Order 2005.
  • Right of first refusal
    A right whereby, in certain situations, the freehold of the building must be offered to the leaseholders before it can be disposed of to a third party.
  • Right to buy
    A right granted to tenants in local authority owned property to buy a lease of their flat or the freehold of their house.
  • Right to manage (RTM)
    A collective right which leaseholders in a building containing flats have the right to exercise, allowing them to take over management of their building.
  • RTM company
    The company that must be set up by the leaseholders when making a claim for the Right to Manage. It must be a company limited by guarantee and incorporate the prescribed RTM Model Articles of Association.
  • s

  • Section 146 notice
    A section 146 notice of the Law and Property Act 1925 is served by a landlord who wishes to commence forfeiture proceedings against a leaseholder following a breach of a lease. This notice must specify the breach complained of, importantly if the breach is capable of remedy, require the leaseholder to remedy the breach, and in any case require the leaseholder to make compensation in money for the breach. The leaseholder is afforded a reasonable time to remedy the breach if it is capable of remedy following service of the section 146 notice. Court proceedings cannot be commenced unless the leaseholder fails within a reasonable time to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money for the breach, to the satisfaction of the landlord. More information you might find useful: Service Charges and other issues: Forfeiture and possession Application to the First-tier Tribunal (Property Chamber): Forfeiture More Frequently Asked Questions in the Glossary Amanda Gourlays’s forfeiture podcast
  • Service charge
    A contribution payable by a leaseholder typically to a landlord, for a share of the cost of insuring, maintaining, repairing, cleaning, etc. the building.
  • Share of freehold
    This essentially means that you will have a lease over your flat as well as a share in the freehold of the whole building. This may be a share in a company that owns the freehold. Alternatively, the freehold may be held by up to 4 individuals. It is important to understand the responsibilities involved in having a share in the freehold which may include liability with others to repair and maintain the exterior of the building and the common parts. More information you might find useful: Living in Leasehold Flats
  • Shared ownership
    A hybrid between renting and owning property. A shared ownership leaseholder buys less than 100% of the equity in a property and pays rent on the rest. It is usually possible for the leaseholder to staircase their ownership to 100% by buying additional shares.
  • Sinking fund
    Often used interchangeably with the term reserve fund, the term sinking fund was originally used specifically to refer to money collected to cover the cost of future large individual items of expenditure such as a new roof, or replacement lift.
  • Solicitor
    A legally qualified person who is professionally regulated by the Solicitor’s Regulation Authority.
  • Summary of rights
    A prescribed document that must accompany a service charge demand and that sets out a leaseholder’s rights and obligations in respect of service charges generally.
  • t

  • Tenant
    A term that can be used to describe both people that own and people who rent their property but which is more often applied to people who rent.
  • Third party
    A lease is usually made between two parties: a landlord and a tenant. However, it is also common for there to be a third party to the lease, such as a management company.
  • Tribunal
    A body with the authority to determine legal disputes in a specific area of law. In a leasehold context this will be the First-tier Tribunal (Property Chamber) in England and the Leasehold Valuation Tribunal in Wales. Appeals are made from both to the Upper Tribunal (Lands Chamber).
  • u

  • Uncommitted service charges
    Once a Right to Manage company has attained the Right to Manage the manager of the building is under a duty to hand over to it uncommitted service charges, meaning money that has been collected but not yet spent on the building.
  • Unit
    That part of the commonhold which is owned exclusively by the unit-holder on a freehold basis, usually a flat but a unit can also be a garage, a parking space, a garden, a shop, an office or even an unbuilt piece of land.
  • Unit-holder
    The freehold owner of the unit.
  • Upper Tribunal (Lands Chamber)
    The tribunal that, in addition to other matters, hears appeals from the First-tier Tribunal (Property Chamber). Decisions of the Upper Tribunal are binding on the First-tier Tribunal.
  • v

  • Variable administration charge
    An administration charge is variable when the amount of the charge is not fixed in the lease. More information you might find useful: Service Charges and other issues: Administration charges What can I do if I disagree with an administration charge? More Frequently Asked Questions on Administration charges
  • w

  • Waiver
    In a landlord and tenant context waiver has to do with a landlord’s ability to forfeit the lease for a breach of covenant by the leaseholder. A landlord can inadvertently waive, or relinquish, his right to forfeit on certain breaches by continuing to treat the lease as still being in force by, for example, demanding further ground rent or service charges with knowledge of the breach.

LEASE is governed by a board, appointed as individuals by the Secretary of State for the Ministry of Housing, Communities & Local Government.

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