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Your rights and obligations

If you're a leaseholder and acquired your lease either through Right to Buy or through purchase from an existing leaseholder, these are your rights and obligations:

When you sign your lease, you agree to:

  • pay the ground rent when it is due
  • pay the council tax, water rates, and other charges for your home
  • pay a fair share of our running costs for the management, repair, maintenance, and insurance of the building and communal areas
  • repay discount if you sell your home within the first five years of purchasing it from us
  • keep the interior in good condition (including walls, pipes, cables, wire, fixtures and fittings, and gas appliances)
  • allow access to our staff or contractors for repairs or inspection
  • to get written permission from us before altering the structure or removing fixtures
  • register with us, within two months, details of any mortgage or other loan charged against your home, any subletting, or any change in lease ownership
  • maintain your gardens in a clean and tidy condition and not build any sheds or fences without written permission from us
  • observe any rules and regulations set by us to ensure proper estate management.

When we give you the lease, we agree to:

  • give you the right to 'hold and enjoy' your home without interruption, provided the charges are paid and your other obligations carried out
  • insure the building for loss or damage for its full reinstatement value and to make good on any loss or damage as soon as possible
  • keep in good repair the building structure, communal gas and water pipes, drains, electric cables and wire, main entrances, passages, stairs, paths, and estate areas
  • keep communal passages and stairs clean and lit
  • decorate the exterior and interior communal areas as included in Red Kite's programme and according to your lease.

You have the right to:

  • access your home
  • access any communal gardens
  • the supply of certain services such as water, gas, and electricity
  • use any rubbish stores and drying areas.

You do not have the right to:

  • use your home for illegal or immoral purposes
  • carry out a trade or business in your home
  • use your home for anything other than as a home
  • do, or allow anyone else to do, anything which would cause nuisance, damage, or inconvenience to Red Kite or other people living in the building or in the neighbourhood
  • do anything which would increase insurance costs or void the policy (for example, store dangerous substances)
  • discharge oil, grease, refuse, or harmful substances into drains or sewers
  • allow the TV, radio, or other noise-making instrument to annoy other occupiers at any time
  • put up signs or posters on windows or walls that are visible from the outside
  • hang out washing except in designated drying areas
  • keep any pet which may annoy other occupiers
  • decorate the exterior of your home
  • put up external aerials or satellite dishes without written permission from us.

The right to manage

The Commonhold and Leasehold Reform Act 2002 gave leaseholders the right to manage the block they live in if they meet certain eligibility conditions:

  • there must be more than 21 years left on the lease
  • if you have a shared ownership or home equity lease, then you must own 100% of your lease
  • there must be at least two flats in the block
  • at least three-quarters of the block must be flats
  • two-thirds of the flats in the building must be owned by qualifying leaseholders
  • at least half the leaseholders in the block must be part of the management company, which is a private company run under specific rules.

Usually leaseholders either set up a management company or appoint a managing agent to carry out many of the landlord’s functions.

Extending a lease

Please note: At time of writing, any lease with less than 80 years remaining will be costlier to extend. Independent guidance on lease extensions is available from the Leasehold Advisory Service.

A lease extension is a statutory right for homeowners that own 100% of their flat, provided you meet the qualifying criteria set out below. It is not a statutory right, however, for a shared owner to have a lease extension granted until their share is 100%.

Red Kite also operate a discretionary scheme, and we will consider applications from shared owners and leaseholders excluded from the statutory right.

You can find more details in our leaseholder's handbook.

Major works

Regulations about consulting leaseholders on major works are complicated, but the main points are:

  • We must consult if the cost of work to any one leaseholder will result in a service charge of more than £250 in any one year.
  • We must also consult if we plan to enter into a 'qualifying long-term agreement' (QLTA) where the likely service charge cost to any one leaseholder is more than £100 in any one year. A QLTA is a contract lasting over 12 months.
  • We must consult for any works under a QLTA where the cost of work to any one leaseholder will result in a service charge of more than £250 in any one year.

How we consult

This consultation (known as a Section 20 consultation) requires the service of notices and a response to comments received. There are normally two letters, called the Notice of Intention and the Notice of Proposal. On occasion there may be a third letter called the Notice of Award.

Each letter allows leaseholders a 30-day period to make comments about our proposals.

The main purpose of the consultation process is to ensure that leaseholders who will be contributing towards the costs of qualifying works and long-term agreements have sufficient involvement with our proposals. This includes the ability for leaseholders to nominate contractors where the contract has not been let 'with public notice' (that is, via the Official Journal of the European Union, OJEU) and make observations to which we must have 'regard'.

First Tier Tribunal (FTT): powers of determination

The FTT has powers to determine Section 20 matters. This includes the power to dispense with the consultation requirements in a particular case 'if satisfied that it is reasonable to dispense with the requirements.'

Who must be consulted?

Consultation notices must be sent both to individual leaseholders and to any Recognised Tenants' Association (RTA). An RTA is an association recognised by us or by a Rent Assessment Committee, under Section 29 of the Landlord and Tenant Act 1985.

Contracts requiring advertisement within the EU (Public Notice)

The 2003 service charge regulations refer to contracts ‘for which public notice is required’. This is a reference to contracts where the sum involved will be of a level where EU procurement rules apply, and the proposed contract must be advertised by public notice in the Official Journal of the European Union (OJEU).

Thresholds are updated annually, and current thresholds can be found on the OJEC website.

Paying your contribution towards major works

Under the terms of your lease you must pay your share of the cost of major works, in full, within 28 days of being sent a demand for payment. We encourage leaseholders to put money aside regularly, so they can pay their share when they receive an invoice.

If you are a Right to Buy leaseholder and you are still within the first five years of your lease, we can only charge you the amount stated on your Section 125 offer notice, plus inflation costs.

Please contact us if you wish to discuss payment options or need more information.

Shared Ownership

Your rent

If you hold a shared ownership lease, you will pay rent on the share of the property that you do not own. We set your rent when you first buy your home. This rent will not always be the same as that for neighbouring or similar properties, even if the share you own is the same as your neighbour’s.

The initial rent level is set at the time of the sale and is as shown in the lease. If you buy extra shares in your home, the amount of rent you pay will go down to reflect the share you own. If you buy your home outright, you will no longer pay rent, but in some cases you may still pay a ground rent (leaseholders only).

Your rent will increase in line with a formula in your lease. Once a new rent is set we will write to you giving at least four weeks’ notice before you have to start paying the new amount.

How we use the rent you pay

Most of the rent you pay will go towards repaying our loans which we use to fund the development of new homes. We also use income from rents received and property shares sold to pay for services we provide and to maintain existing homes and estates.

Arrears

Your lease requires you to pay rent and service charges monthly by Direct Debit on the first day of the month. It also says that if you delay payments we can charge interest on the amount due until it is paid.

When you buy your home, you must set up a Direct Debit so that we collect the money from your bank account for the right amount and on the right date. If you are having difficulty paying for any reason, please contact us without delay. We will offer advice to help you claim any benefits you may be entitled to, and we can refer you to other agencies that may be able to help, for example, debt counselling.

Our approach to recovery of rent from shared owners

We recognise that shared owners are part-owner and part-tenant of their property and may be on a low income or have suffered a change in their circumstances. It is not in our interest to dispossess them of their home, but it does require us to balance the need to collect income and help shared owners to keep their home.

Our approach is based on an escalation process of:

  • prevention
  • early action
  • clear arrangements for repayment of arrears
  • working with the mortgage provider
  • court action
    • money judgment order from the small claims court
    • money judgment order and suspended possession order under Ground 10 or 11 of the Housing Act 1988
    • mandatory possession under Ground 8 of the Housing Act 1988
  • repossession or forfeiture.

Problems with paying your bills

Most of us have difficulty with bills at some time. The problem is often temporary, such as loss of overtime or an unexpected expense. Occasionally the problem is longer term, such as loss of a job or a long-term illness. If the problem is short-term, please tell us the circumstances and when you will be able to pay. Be realistic when you make promises to pay later.

If the problem is likely to be longer term, there are several things you can do:

  • Check you are claiming all the benefits you are entitled to. Usually you can’t backdate claims, so don’t delay claiming
  • Give priority to essential costs such as mortgage, rent, service charges, council tax, and food
  • Reduce spending on non-essential items.

We can refer you to a debt counselling service to help you plan your budget and negotiate with people you owe money to. If you fail to make the required payments and do not contact us, we will take legal action to recover the money owed to us. If you fail to pay, you are in breach of your lease and you could lose your home. If you're having difficulty paying your rent or service charge, please contact us without delay.

Buying shares - Staircasing

If you have bought your home through a shared ownership scheme, you can buy further shares until you own 100% of the property unless otherwise stated in your lease. This is known as 'staircasing'.

You are not obliged to buy more shares, but the more you own, the less rent you pay.

You may be restricted on the number of times you can staircase, and you should check your lease to clarify this.

The minimum share you can purchase may be set out in your lease - it is common to staircase in 10% tranches, but we are open to different levels of staircasing so long as the costs of the transaction provide value for money in comparison to the amount being staircased.

Remember that you cannot staircase if you have any service charge or rent arrears.

More information on how to staircase can be found in our leaseholder's handbook.

Selling your home

Repairs

If any repairs are needed, it is important you know who to talk to and when. More information can be found in our leaseholder's handbook.

Insurance

As the landlord and freeholder of the building we are responsible for arranging the buildings insurance. We do this by negotiating payments which are usually lower than can be achieved by private homeowners.

The buildings insurance we take out on your behalf covers the structure of the building and includes fixtures and fittings. The policy covers incidents that are an 'insurable peril', which includes damage from a storm or escape of water, but it does not include anything that happens gradually such as wear and tear.

It is important to remember that our buildings insurance will not cover your possessions. You are responsible for insuring the contents of your home.

Read more about insurance in our leaseholder's handbook.

Independent information

Useful contact information, including the contact details for the Leasehold Advisory Service (020 7383 9800, info@lease-advice.org) can be found in our leaseholder's handbook.