Leasehold Information Pack

23/03/2016
The Leasehold Information Pack is bundle of documents purchased by the seller of a leasehold property and is also referred to as the Management or Freeholder Pack. The Leasehold Information Pack contains information about the freehold management, ground rent and service charges, and forms a part of the formal leasehold enquiries that a seller needs to provide to the buyer.

It is often the case that sellers have some of the information provided within the leasehold information pack, however this will not suffice for the purposes of the buyer as they require other more detailed information that you won't have knowledge of such as future planned maintenance works.

Just after instruction of the solicitor and receipt of the TA7 (Leasehold Information Form) from from the seller, the seller's solicitors submits an LPE1 form to the Freeholder / Managing Agents. There is normally a fee to pay the Freeholder / Managing Agent for compiling this information and this is paid before the information is release. You can see what questions are asked in an LPE1 form here - The Law Society Leasehold Property Enquiries Form LPE1

Leasehold-Conveyancing-Quote

"What is a Leasehold Property?"
A leasehold property is where you only own the leasehold for a fixed period of time. You'll have a legal agreement with the landlord (sometimes known as the 'freeholder') called a 'lease'. This tells you how many years you'll own the property. Ownership of the property returns to the landlord when the lease comes to an end however leases can be as high as 999 years long.

You can read our simple guide on everything you need to know about what to do when Buying a Leasehold Property.

What is included in a Leasehold Information Pack?


1. Ground Rent
Evidence of current ground rent paid and any ground rent due and the monthly/annual charge. This information is used to prove your ground rent has been paid and to apportion any amounts to you or that you owe on completion.

 
2. Service Charges
Evidence of current service charges paid and any ground rent due and the monthly/annual charge. As above, this will be used in an apportionment calculation. There is also information provided about any reserves held for service charges for future planned maintenance.

3. Major works
Planned future works are important for any buyer as they'll need to understand what repair work costs they are going to be liable for

4. Last 3 years of annual accounts for Management Company
The last 3 years of accounts of the management company shows how profitably the company has been trading. It is important for a buyer to know that the freehold is going concern and is managing the freehold and communal areas properly with sufficient cash reserves to cover any disasters such as roof repairs.

5. Buildings Insurance
It is the Freeholder's obligation to ensure that adequate buildings insurance cover is in place. A copy of the policy should be provided in the pack.

6. Notice fees, deed of covenant fees, and other freeholder fees
The pack includes costs the buyer will have to pay the freeholder after completion.

7. Disputes & enfranchisement
Any leaseholder disputes are listed along with any current action being taken in relation to enfranchisement (someone buying the freehold), extension of the lease (Read more about Extending your lease), right to manage or right to enfranchise company.

Checklist for documents that could be included:

✓ The last 3 years published Service Charge Accounts
✓ Buildings Insurance Policy & Schedule
✓ Buildings Insurance for Common Parts
✓ Service Charge & Budget for current year and details of the anticipated payments on account


What is the cost of the Leasehold Information Pack?

The costs that freeholders and managing agents charge can vary from free up to as high as £500. Council freeholders are cheaper than private company managing agents so it is always best to call them and find out what they will charge you for compiling this documentation.

TA7-Leasehold-Information-Form
 
 
 
 
 
 

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