Leaseholders Handbook

Selling your home

You do not require the Council’s permission to sell your flat or property, although if you bought your flat under a shared ownership scheme, you must offer it back to the Council first.

Kingston Council must be informed of any change of ownership and this usually happens when a purchaser’s solicitor serves a “notice of assignment” on the head of legal services.

If you sell your flat within five years of buying it from the Council under the Right to Buy Scheme, you will usually have to pay back some of the discount given to you when you purchased it as follows:

• within one year of purchase - all of the discount
• within two years of purchase - 4/5 of the discount
• within three years of purchase - 3/5 of the discount
• within four years of purchase - 2/5 of the discount
• within five years of purchase - 1/5 of the discount.

There are some circumstances where the discount does not have to be repaid, for example if the sale is to your husband, wife or another member of your family who has lived with you for at least 12 months. In such cases, you are strongly advised to seek independent legal advice. When a flat or maisonette is sold, any outstanding amount on the service charge account remains with the property. As a result, if the seller does not pay the service charge at the time of sale, it becomes the new leaseholder’s responsibility to pay. This is also true of any pending charges that are invoiced after the property has been sold but that were incurred during the seller’s period of ownership.

If you are selling your flat you or your solicitor may apply in writing to the Service Charge Accounts (Data Services) Team for a Pre-Sale Enquiry Pack. This will provide information regarding current and pending balances as well as copy service charge accounts, building insurance and planned maintenance information. An administration fee i payable for each pack. Pre-Sale Enquiry Packs are produced by the:

Service Charge Accounts (Data Services) Team
Royal Borough of Kingston upon Thames
3rd Floor Guildhall 2
Kingston upon Thames
KT1 1EU
Phone: 020 8547 4781/6508
Email: dataservices.housingteam@kingston.gov.uk

Kingston Council will not split the service charges between the seller and new leaseholder when a transfer takes place.

The Council is not usually in a position to repurchase flats sold under the “right to buy” although if you purchased your flat from the Council after 18 January 2005 and wish to sell your property within ten years of buying it you must first offer to sell it back it to the council at a mutually agreed price or a price determined by the district valuer.

Letting out your home

You must request permission from the Council before letting your property.

If you own only part of your property and the remainder is owned by the Council (under a shared ownership arrangement) you will not be allowed to let your property.

If you own your whole property as a leaseholder you will usually be granted permission to let out your flat provided that:

• You provide your phone number so we can contact you immediately in the case of an emergency such as a water leak from your property.
• If you are living abroad you must provide an emergency contact in the UK who is able to arrange access to the property at short notice.
• You tell us your contact address so that we can write to you about your service charge, repair issues and to advise you about majorworks programmes.
• You must ensure that your tenants comply with the terms of the lease, as you ar responsible for their behaviour. This will include noise Nuisance and other forms of anti social behaviour.
• You are responsible for the safety of your tenants. If you have gas in the flat you must by law make sure that gas appliances, fittings and flues provided for tenants are safe. You must ensure annual maintenance checks, and resultant repairs, are carried out by a Gas Safe registered engineer and that you have a current Landlords Gas Safety Record (LGSR) certificate. Please supply a copy of the certificate to: paul.dunkerton@kingston.gov.uk, Lead Officer, Assets and Compliance.
• In some of our earlier leases the Council remain responsible for the supply of hot water and heating and we will recharge the costs through your service charge.

Letting out your flat may affect the buildings insurance premium and the risks covered.

If your flat is left unoccupied for more than 30 consecutive days, you are no longer insured for a number of risks including:

• Malicious damage
• Theft or attempted theft
• Loss of water from any fixed pipes or tank

For more information about letting your flat you should contact the Housing Contact Centre on 020 8547 5003.

Renewing (extending) the lease

Lease extension is a statutory right for 100% owned flats provided you own a long lease (more than 21 years) and have owned it for more than two years. It enables you to extend your lease by 90 years (on top of the length of the term currently remaining on your lease). The new lease will be as far as possible on the same terms as the current lease subject to minor modifications and exclusions.

The process is carried out in accordance with the Leasehold Reform Housing and Urban Development Act 1993. The procedure is very process driven and there are strict time limits.

The following is intended as a summary of information about extending your lease using the statutory route, but it is not a substitute for legal advice. The LEASE website www.lease-advice.org also provides free information and covers the process in more detail.

Why might lease extension be advantageous to me?

When the number of years remaining on your lease falls below about 70 it becomes more difficult to sell the property because:

• Prospective buyers may find it difficult to secure a mortgage
• The property may prove more difficult to sell on
• Lease extensions become more expensive the shorter the current lease term

Provided you have correctly served your notice, your purchaser will have the benefit of your right and will not have to qualify themselves.

How is the price agreed? Do I need a Valuer?

You must serve a Section 42 Notice on the freeholder (the Council). This is s formal legal notice that sets out your desire to renew the lease. We would recommend that you discuss extending your lease with a valuer before you proceed. They will indicate the valuation for the extension in the Section 42 notice. We suggest that your valuer provides a “best” and “worse” valuation as the eventual price is likely to be agreed somewhere in between.

A valuer will help you:

• carry out the valuation to assess the premium
• give you advice on the offer you make to us
• advise you on our response to your offer
• negotiate with the Council
• provide expert evidence if necessary at the First Tier Tribunal.

The Royal Institute of Chartered Surveyors (RICS) can recommend valuers (surveyors) in your area: www.ricsfirms.com

You should also think about appointing a solicitor at this stage. There is a set procedure for agreeing the price. The valuation will be fixed at the date you apply for the extension regardless of how long it takes for us to agree the price.

Freeholder’s Counter Notice

There is a strict period of two months during which the Council must respond to your Section 42 notice. We will either:

• agree your right to the new lease and, either accept the terms, or propose what we consider to be the valuation. There will then be a period of between two and six months to finalise the valuation and during this time either party may apply to the First Tier Tribunal or
• not admit the your right and give our reasons, which will need to be determined by the County Court or prove to you that the building is going to be demolished

If we fail to respond to your notice, you have the right to apply to the County Court and they may make a vesting order and will determine the terms of the extension on the terms first proposed in your section 42 Notice.

How will the Council’s valuer work out the Council’s valuation?

The Council’s valuer will consider the following when assessing the premium:

• the reduction in value of Royal Borough of Kingston upon Thames freehold interest by the lease extension, which in some cases may be loss of a ground rent
• if your current lease has less than 80 years remaining the valuation will take account of a marriage value which is the difference between the value of our interest in your flat under the current lease arrangements and our value in the lease with the additional 90 years and is shared equally between us
• compensation for loss arising from the grant of the new lease. This is compensation for our loss in respect of other leases that have not extended their interest.
• our reasonable costs of dealing with this application (as noted below).

How much will it cost?

You will be responsible for all your costs (valuer and solicitor) and our legal and valuation costs as well. The Council’s valuers fee will be a minimum of £780 but may be more if the work involves more
work or negotiation. The Council’s legal fees will be a minimum of £1500 and will depend on the time taken to deal with any further issues raised.

Who should I send the Section 42 Notice to?

Head of Legal Services
Property Team
South London Legal Partnership
Guildford House
67c St Helier Avenue
Morden SM4 6HY

Who should I contact for further information?

The Leasehold Advisory Service
Tel: 020 7832 2500
www.lease-advice.org/aboutus

Buying the Freehold

Alternatively, leaseholders of flats originally purchased under the Right to Buy scheme can get together to buy the freehold of their building provided at least two thirds of the flats in the building have been sold on a lease. This is known as collective enfranchisement. Please note that you cannot buy the freehold of a single flat in a block.

For more information visit Lease Advice.