What is a leasehold management pack?
Selling a leasehold property? A leasehold management pack is an essential part of the process. Our guide explains what these pack contain, why they’re crucial for bother buyers and sellers, and how to obtain one.
Understanding leasehold management packs can help streamline your property transaction and ensure a smoother sale.
What is a leasehold property?
Starting with the basics, a leasehold property is a property that you own the right to live in for a set period. You do not own the property or the land it sits on outright, you just occupy it. You could think of it as a long-term rental agreement, except instead of renting, you have a lease from a freeholder.
If you are a leaseholder selling your property, you’re passing on your rights under your lease to a new buyer (leaseholder).
Lease lengths can vary but are typically quite long. When first granted, they are often 99, 125, or even 999 years. As the lease gets shorter, the property becomes less valuable, meaning that the time left on a lease is an important factor.
The freeholder of your leasehold whilst owning the building and land, has little control over the property day-to-day. They’ll likely charge annual ground rent and service charges that cover maintenance of the building and any communal areas.
Check out our guide on the difference between a leasehold and a freehold here.
What’s included in a leasehold management pack?
The pack is your property’s story in documents. It discloses who’s who – your landlord/freeholder and management company – and includes key information on them. It will also include an LPE1 form, a standardised document that tells buyers everything they need to know about your leasehold.
The pack should contain:
- Ground rent statement
This information proves you’re up to date with payments and helps calculate any amounts owed or due to you when the sale completes. It’s a key part of the financial picture, ensuring a smooth handover between you and the buyer.
- Service charge statement
This shows your payments and any amount due. It’s used to calculate what’s owed or due to you at completion. It also includes info on any reserves for future maintenance. It will give buyers a clear picture of ongoing costs and financial planning.
- Major works plans
Details on planned works, also known as major works. Buyers need to be aware of this as future work could impact their living situation in the property, or they may even be responsible for certain payments.
- Last 3 years of annual accounts for the management company
This shows the management company’s financial health and how well they’re managing the property. It reassures buyers that the freehold is stable, with enough reserves for unexpected repairs.
- EWS1 External fire wall review
For leasehold flats over 18 meters, a report needs to be provided on the building’s exterior materials. This crucial safety check confirms whether any materials are combustible, giving the buyer peace of mind about the property’s fire safety status.
- Asbestos survey
This report identifies if asbestos is present in communal areas and assesses any potential risks to residents. It’s a key safety document for older properties, giving you clarity on this important health and safety issue.
- Building insurance
The freeholder arranges this essential cover, but costs are shared among leaseholders. The policy information needs to be provided, showing the buyer that they will be protected.
- Notice fees, deed of covenant fees, and other freeholder fees
This includes the costs the buyer will have to pay the freeholder after completion. For example, the freeholder needs to be told who the new leaseholder is and the freeholder may charge an administration fee for this.
- Disputes and enfranchisement
This part will outline any ongoing disputes or actions, including freehold purchase attempts, lease extensions, or rights to manage claims. This transparency helps the buyer understand the property’s current legal situation.
Who provides the information?
The information and documents included in the leasehold management pack are typically obtained from the freeholder (landlord), management company, or the managing agent by your conveyancer or solicitor. Sometimes it’s a mix of all three.
Although the information is crucial for the sale, those providing the information or documents aren’t legally required to do so. This can be frustrating, but there’s not much you can do but keep pushing to get what you need.
What does this mean for a seller? Well, they might experience some delays in getting their pack together. Don’t worry though, this is pretty common and doesn’t reflect on the property.
It can typically take between one and six weeks to get the pack together, but this depends on the responsiveness of the freeholder or managing agent.
When is a leasehold management pack required?
A leasehold management pack is an essential set of information and documents when you’re selling a leasehold property. It’s not just a nice-to-have, it’s a must-have for completing your sale.
As soon as you put your property on the market, it’s time to start thinking about this pack. Why? Because potential buyers and their conveyancers or solicitors will need this information to move forward with the purchase.
Remember, every leasehold is unique, but the need for this pack is universal. Whether you’re selling a flat in a high-rise or a 3-bed house, you’ll need to provide this information.
How much does a leasehold management pack cost?
The cost of a leasehold management pack can vary, but here is what you can expect. Typically, you’re looking at a range of £200 to £500. This can vary based on a few factors, including:
- Your property’s location
- The managing agent or freeholder
- The complexity of your lease
Some managing agents or freeholders have set fees, while others charge based on the information they need to provide.
If the ground rent and service charges are collected by different parties, then you may need to obtain the management pack from multiple sources. Keep this in mind as it could impact cost.
Frequently asked questions
How long does it take to get a leasehold management pack?
Typically, it takes about 1-6 weeks to receive a leasehold management pack, but this can vary. Some managing agents are quicker, while others might take longer, especially if they’re dealing with a high volume of requests. We always recommend starting this process early to avoid any delays in your sale.
Why is a leasehold management pack important for buyers and sellers?
For sellers, it’s a key tool to showcase your property’s health and management. For buyers, it’s crucial to understand the full picture of what they’re purchasing, including ongoing costs and responsibilities. This pack helps both parties move forward with confidence, ensuring a smoother, more transparent transaction.
Can I sell my leasehold without a management pack?
Technically, you can list your property without a leasehold management pack, but it’s extremely difficult to complete a sale without one. Most buyers and their conveyancers or solicitors will insist on seeing this information before proceeding. Without it, you risk delays, complications, or even the buyer walking away. It’s always best to have this ready to ensure a smooth sale.
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