01 Dec Communal And Common Parts On Leasehold Property Explained
If you are buying a leasehold property (and occasionally with freehold properties) you are likely to be granted the right to use “common parts”.
Most often, this will be fairly obvious and routine parts of the building such as a stairway and/or lift in a block of flats, that you will use to get from the front door of the building, to the front door of your property. It should also include emergency/fire exits, passageways and pathways.
That’s all fairly common. We will now look at some common scenarios of when this might be the case –
Car Parking Facilities
General use of car parks or underground garage may also be included. However, this can sometimes be a little less straight forward.
Sometimes you might only have the right to use certain spaces, or you may even be restricted to only one place, even if there are two of you, with a car each. Make sure you find out what rights you have, and that this matches what you were expecting. There can also be restrictions on who else can use the spaces. For example, the rules may say that you cannot have visitors, so anyone coming to see you will have to park out on the road. Or there may be visitors parking, but this can be quite limited and it’s first come, first served.
There may also be a restriction on what you can park, such as not being able to use the car parking for vehicles over a certain size or preventing you from parking commercial vehicles on the premises. There can also be rules when you can wash your vehicle in the car park. If it’s a gated development, you may need a special fob to access the car park, and those can be expensive to replace so factor that into your budget.
Some estates can include gardens and communal areas. If this is stated to be one of the common parts, then that means you can use it, but there can sometimes be rules, such as not being able to use it past a certain time so as not to cause a disturbance to others. They might restrict what you can do in the gardens, such as not being able to have BBQs or parties, or perhaps how many visitors you can have. So, if one of the selling factors of the property was the lovely outside areas, make sure that you can use those parts as much as you want to.
Some developments, particularly more modern ones, have more unusual common parts.
For example, you might be attracted to a building that has a gym in the basement. Whilst this might be a selling factor to you, it could also have its drawbacks, particularly if you cannot use it as often as you would like. Check what equipment there is, and what guarantees you will have that the equipment will be maintained to a reasonable standard. See what restrictions there are on when you can use the area, and whether you can take your friends in.
You might be excited to see that you can take in as many people as you like, as often as you like, at any time of the day or night that you like. However, that will mean that everyone else can do the same, so you may find that you can never get on the treadmill or lift a weight because there are always non-residents in the way.
Even more unusual, although equally desirable is having a swimming pool on the complex. However, before you grab your goggles, you might want to look into how this will work in practice. Is there going to be a lifeguard and if not, what safety measures are in place.
You may take the view that you don’t care because you’re a good swimmer, but poor management of a facility like this can lead to negligence claims, which can lead to an increase in insurance premiums which you will have to contribute towards. You also want to check how well the pool is going to be maintained.
The equipment and chemicals for pools needs to be monitored on a regular basis so make sure there is a plan in place for this to be done. Also, what are the pool rules – as with the gym, not being able to invite your friends’ round might be better than everyone being able to invite anyone round!
No matter how ordinary or exotic the common parts are, not only should you make sure that you have the right to use them as much and as often as you reasonably want, but you should also consider what are those common parts going to cost. All common parts will need to be maintained, even if it’s just a lick of paint in the hallways. Whatever those costs are, they will be split between all of the residents through the service charge, so you will have to make a contribution.
Common Parts and the Conveyancing Process
As part of the purchase process, we will obtain a sellers information pack from the freeholder, which will include information on the service charges. This will show us a number of things, including how much the residents have been asked to pay over the last few years, which will give you an indication (although not a guarantee) of what you are likely to have to pay in the future. It should also tell us how much money the residents have ACTUALLY paid.
It may surprise you to learn that leaseholders don’t always pay their way, and freeholders don’t always take commercial steps to recover the arrears. You may be of the opinion that so long as your account is up to date it doesn’t matter what anyone else does or doesn’t do, but actually, it will have an effect on you.
If the freeholder starts to run out of money because people are not paying their service charges, the management company may not have the funds available to do the repairs that are necessary. If you live on the top floor and find that the lift is out of action because the freeholder can’t afford to have it fixed, you’ll soon get fed up with walking up and down the stairs.
A badly managed freehold should be a warning sign that things should at least be investigated further before you decide whether to proceed with the purchase.
Some leases will provide for what is called a sinking fund. This is where each leaseholder pays a lump sum to the freeholder to be held in anticipation of future repairs. The idea is that if anything needs to be done urgently, such as a sudden and urgent lift repair, instead of the repair being put on hold whilst the money is collected from the leaseholders, there is money available for urgent work so that no one is inconvenienced. This, of course, has both advantages and disadvantages for you.
The advantage is that you’ll know that it is unlikely there will be any loss of facilities, but the disadvantage is that you will have to make a contribution towards the fund, and we won’t be able to tell you what contributions you might have to make in the future. We can only tell you what the current state of play is.
If you are interested in a leasehold property, make sure you have a clear idea of what parts of the building outside of your flat you can use and on what terms. Equally importantly, make sure you know what those common parts are going to cost you, and when you are likely to have to make those payments.
Disclaimer – our articles are designed to give you guidance and information. There is no substitute for proper direct advice, particularly as everyone’s circumstances are different. If anything in this article may affect you, please contact us for advice that is specific to your circumstances.