News
No let up on leasehold lettings
A new guide to good practice and related issues when letting leasehold flats has been published.
Despite the downturn the letting of leasehold flats is continuing at a level that still gives cause for concern where the letting is not done properly. Following the huge growth of buy-to-let properties from 2000 to 2007 it is estimated there are well above 400,000 leasehold flats being let out by their owners; this is over 20% of all leasehold flats in England and Wales.
Unlike freehold houses, leasehold flats come with detailed rules and restrictions (in the form of the lease) designed to ensure that the flat owners live in an ordered and cohesive society for the benefit of the development overall. However, where a large proportion of the flats are sublet to tenants this society can breakdown as tenants are not stakeholders in the property as with owner occupiers. In a survey of its members the Association of Residential Managing Agents (ARMA) found 62% of respondents reported having at least one block of flats under management where 90% or more of the flats sublet and most blocks had at least some flats sublet.
“When you have this situation the block of flats can be extremely hard to manage as the landlord and the managing agent have no legal relationship with or control over any tenant who is renting a flat”, comments Brett Williams, ARMA’s chairman.
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