Residential flat schemes—common issues
Residential flat schemes—common issues

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Residential flat schemes—common issues
  • Common deficiencies
  • Rights granted or reserved
  • Ground rent
  • Repairs
  • Service charge
  • Assignment
  • Notice of assignment and mortgage
  • Landlord's obligations
  • Forfeiture
  • more

When reviewing a lease within a moderately small residential flat scheme which consists of a principal building containing the flats and some communal external areas or estate, consider the following issues:

Unless buying the first flat to be sold within a development, any deficiencies discovered are unlikely to be easily resolved, because the landlord will have already granted leases to other leaseholders and cannot agree amendments even if the deficiency is inconsistent with the requirements of the UK Finance Mortgage Lenders’ Handbook (the Handbook) (formerly known as the CML Handbook), unless the landlord can persuade all the existing leaseholders to enter into appropriate deeds of variation. Report any deficiencies to the buyer's mortgage lender (if any) and be prepared to advise the buyer not to proceed if the deficiency is fatal. For more information see Practice Notes: UK Finance Mortgage Lenders' Handbook and Residential flat schemes—issues for the buyer.

Common deficiencies

  1. inconsistent definitions — in many leases the terms ‘Premises’ and ‘Property’ are used interchangeably, and often with inconsistent use of capitals, leading to confusion

  2. inaccurate definitions — the definitions of ‘Property’, ‘Building’ and ‘Estate’ must all marry up, and it must be clear exactly what is meant by ‘Common Parts’, ‘External Areas’ and ‘Adjoining Property’

  3. verbal descriptions — these must be consistent with the plan(s)

  4. inaccurate parcels — ensure