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The lease

This content applies to England & Wales

Information contained in a lease and the terms that apply.

Information in a lease

The lease is a written agreement that establishes the relationship of freeholder and leaseholder, and sets out the contractual terms that are binding upon each person named on the lease. Leases are often long, complex documents. There is no 'standard' lease, although all leases will contain certain information:

  • the names of the parties to the lease (the freeholder and leaseholder)
  • the address of the property concerned
  • the length of the lease (the term)
  • the rent ('ground rent' - for more information see below)
  • the leaseholder's obligations (for example for service charges and repairs)
  • the freeholder's obligations (for example to insure the property or repair the common parts).

A typical lease is made up of a main contract and a set of schedules at the end of the document that will deal with specific issues such as service charges. Modern leases tend to have helpful subtitles or margin titles. Because of the great variety of leases, it is important to read the whole of the lease and to note all the matters that may be relevant, before giving advice on particular issues.

Terms

As well as the express terms of the lease, certain terms can be implied into the agreement.

Express terms

An express term is a term actually agreed by the parties and contained in the lease. Any ambiguity in one of these terms would generally be interpreted in favour of the leaseholder.

Implied terms

Sometimes the lease does not give full details of what has been agreed. This can be due to omissions or ambiguity in the lease but also where the law contains provisions that are implied into leases. Statute can impose terms on the parties. Such terms operate even if there is an express term to the contrary in the lease. For example, the right to a court order or to extend the lease will apply no matter what is said about giving up possession in the lease.

Ambiguity and omissions generally arise in one of two circumstances:

  • where only the most important parts of the agreement are set out, leaving the remaining details to be understood; or
  • where there are certain situations that are not provided for in the agreement.

In these cases, it may be possible to find that the freeholder and leaseholder agreed something additional, implicitly, at the time the lease was signed. The question is then whether a court can imply a term to remedy the deficiency or cover the unexpected situation. Whether or not a term can be implied depends upon the intention of the parties at the time of the agreement, taking into consideration the words of the agreement and the surrounding circumstances.

A court can imply a term in either of the following circumstances:[1]

  • if it is necessary to give business efficacy to the agreement - the court will add a term on the basis that without it the contract will not work;[2] or
  • where the term to be implied represents the obvious, but unexpressed, intention of the parties - the court will not imply such a term unless it is satisfied that both parties would, as reasonable people, have agreed to it, had it been suggested to them at the time of the agreement.

Varying the terms

The terms of a lease may be varied by a deed of variation, which is an agreement subsequent to the lease by which the freeholder and leaseholder agree to vary terms in the lease. These may include: the extent of the property, the duration of the lease, or service charges. The lease must be read together with variations. Most leases will have been registered at the Land Registry, where any variation should also be registered. To establish the full position, it is necessary to check the registered title and obtain copies of any variations of the lease as well as the lease itself.

See the page Changing the terms of the lease for more information.

Types of charges

Leaseholders may be required to make three different kinds of regular payment to their landlord:

Service charges

Service charges are paid for specific services provided by the freeholder or her/his agents. Typical services include maintenance, exterior repairs, insurance, cleaning of common parts, caretaking, and porterage. They are normally payable annually. For more information see Service charges.

Ground rent

Ground rent is a fee, separate from any service charge or administration charge, payable by the leaseholder as a condition of the lease. The lease will specify how much the ground rent is, when it is due and who it must be paid to. A leaseholder does not have to pay the ground rent unless s/he has been given notice of payment in the prescribed form by the freeholder.

The notice must be in the prescribed form and specify:[3]

  • the amount of the payment
  • the date on which the ground rent is due, which must be:
    • not less than 30 days or more than 60 days from the date the notice was given, or
    • no earlier than the date set out in the lease for payment of the ground rent.

The ground rent can be increased if:

  • the lease contains a term that allows it
  • the leaseholder agrees to an increase
  • the property is sold.

A leaseholder can apply, free of charge, for an Order of Apportionment to legally separate her/his share of the ground rent from that payable on neighbouring properties.[4]

[1] Liverpool CC v Irwin [1976] 2 All ER 39 HL.

[2] See Yeung v Potel and Summers [2014] EWCA Civ 481 for an example.

[3] s.166 Commonhold and Leasehold Reform Act 2002; Landlord and Tenant (Notice of Rent) (England) Regulations 2004 SI 2004/3096 as amended by para 29 Sch.2 Transfer of Tribunal Functions Order 2013 SI 2013/1036; Cheerupmate2 Ltd v de Luca Calce [2018] EWCA Civ 2230.

[4] DCLG Guidance August 2011: Application for the apportionment of a ground rent - leasehold land in different ownership.

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