Leasehold Costs – What Extra Charges does a Buyer Face?

If needed, the lenders details can be provided for the buildings insurance policy. As with the first item in this list, your solicitor prepares and serves this notice for you.

This confirms that you abide by and accept any restrictions on your use of the property (restrictive covenants) which might be set down within your lease agreement.

Your solicitor should outline any of these to you and provide you with a copy of the lease to review yourself.

You have to sign the deed in the presence of an independent witness and return it to your solicitor. The landlord/management company normally charges a fee for either preparing this deed, accepting it or both.

In some cases there is a restriction on the property title - i.e. the deeds - which stops you being registered as the new property owner unless your landlord/management company has provided a certificate  - a Certificate of Compliance - which confirms that you/your solicitor have done everything you should to conform with the terms of the lease.

These duties would include serving one or both of the notices mentioned previously and making sure that any deeds of covenant required have been signed and provided to them.

Usually you'll have to pay your service charges and/or ground rent in advance for the year either once a year, 6-monthly or quarterly.

This means that in the year that you buy your seller will have paid these and you might be required to reimburse them from the date of completion to the next payment date/s on which service charges and/or ground rent is/are due.

You effectively then become responsible for any fees due regarding these two charges.

Because service charges are paid in advance, when the accounting year ends (31 March) your landlord/management company prepares final accounts to show actual expenditure for the year versus the total of the service charges collected.

If the amount spent is larger than what was collected, then all the leaseholders in your block might be asked to pay the difference/deficit.

As a new leaseholder you'll be asked to contribute your share even though the expenditure might relate to your seller's period of ownership. You can ask your solicitor to try and agree what is known as a retention with the seller's solicitors which would hold back a set sum for a specified period of time.

You can then use this sum to pay for and make good any deficit that arises from the seller's period of ownership. Many solicitor firms charge additionally for getting a retention agreed - this is well worth checking when you read through the terms and conditions attached to a leasehold purchase conveyancing quote.

Your landlord/management company might charge you a fee if you're looking to carry out works/alterations to your property or are intending to let it to a third party under a tenancy agreement if your lease specifically states that the landlord/management company must consent before either is undertaken.

It's well worth informing your solicitor if you're considering either of these options because they can review or vary the lease or try and get further information for you.

If as a new leaseholder in your block you're required to become a member of the management company, you might find that some administrators charge you a fee for transferring the share or membership in the management company into your name.