If you are a freeholder, then you have certain legal responsibilities to your leaseholders. In this post we will outline your responsibilities as a freeholder, so you can ensure you stay compliant.
What Are My Responsibilities as a Freeholder?
Freeholders own a plot of land, along with any structures located on this land. You may choose to rent this property to leaseholders, and if you do so, you will take on certain legal responsibilities. These include:
- Repairs and maintenance of structures
- Keeping communal areas clean
- Keeping records
- Arranging insurance
In this post, we’ll expore each of these in more detail.
For more information about your legal obligations as a freeholder, see the Landlord and Tenants Act 1985 and the Landlord and Tenants Act 1987.
Repairs and Maintenance of Structures
The freeholder is generally responsible for maintaining the buildings on their land, while arranging for any necessary structural repairs. This will include the building’s roof and guttering, along with any communal areas such as hallways or staircases.
Freeholders may also be responsible for arranging interior and exterior painting and decorating. And whenever any works are carried out, the freeholder will be responsible for liaising with contractors.
Do Freeholders Have to Pay for Repairs?
Note that the freeholder is only responsible for arranging repairs. You do not necessarily have to pay for them. Some freeholders choose to pass on the cost of repairs to their leaseholders.
Keeping Communal Areas Clean
Your property may have numerous communal areas, including:
- stairways
- hallways
- lifts
- doors
- shared kitchens
- shared bathrooms
- shared living rooms
In any case, the freeholder is responsible for maintaining these communal areas, which includes keeping them clean in line with relevant health and safety regulations. Most freeholders will apply a service charge in order to fund this ongoing maintenance.
The freeholder will also be chiefly responsible for maintaining any outdoor areas, such as gardens and car parks.
Keeping Records
Freeholders are responsible for setting, collecting, and allocating ground rent and, as we mentioned above, service charges.
Leaseholders have a legal right to enquire about these charges, and they can challenge certain charges if they feel they are unfair.
With this in mind, freeholders should keep detailed records of how they calculate their charges, and how they spend them. They should outline these calculations in the leasing agreement, so that the leaseholder can approve of them. And they should deliver routine management reports to keep their leaseholders updated.
Arranging Insurance
Finally, as the owner of the structures on their property, the freeholder is responsible for arranging for building insurance.
Once again, the responsibility only extends to arranging for this cover. Many freeholders pass on the costs of the cover to their leaseholders.
Though as we mentioned above, freeholders must be transparent about their insurance arrangements. Leaseholders have a legal right to enquire about the cover they are paying for, and they can challenge the freeholder if they feel they are being charged too much.
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If you are a freeholder, we can help you get the specialist cover you need at a competitive price, whether you are leasing to private tenants or businesses.