Are you a freeholder or leaseholder?
Properties sold under the Right to Buy scheme are transferred on either a freehold or leasehold basis. Which one depends on what type of property you are buying and where it is located.
Your Section 125 offer notice and transfer documents will show whether your property was sold on a freehold or leasehold basis.
What does being a freeholder mean?
As a freeholder you have purchased the property in its entirety and this includes the accompanying garden and land surrounding the property. The full extent of the land included will be detailed in the layout plan agreed prior to sale.
Freeholders are not normally asked to pay service charges unless the Council intends to carry out works to areas around your property that you will benefit from.
There are only a very small number of houses that the Council would consider transferring on a leasehold basis.
When a Council house is sold freehold there will be covenants, or restrictions, included within the legal transfer document that cover what can and cannot be done with the property. These covenants are generally designed to protect against inappropriate alterations to the property and gardens, or other changes that would affect the overall appearance or management of the neighbourhood.
The transfer document is sent to your legal representatives before the sale is completed and by completing your purchase you are accepting these conditions. It is your sole responsibility to ensure that you do not cause a breach of any of the covenants.
If you do cause a breach, you could be asked to put it right (at your own cost), or the Council could take legal action against you.
What does being a leaseholder mean?
Leasehold is a transfer of a flat or house on a long lease arrangement as opposed to outright sale. This is usually because the whole of the building, including the land it sits on, cannot pass entirely to the purchaser.
For example: if someone applies to buy a flat within a block, the remaining flats, the structure and its communal areas still belongs to the Council so full ownership of the property cannot be transferred on a permanent basis.
The leases used by Kettering Borough Council are normally for 125 years. As all leases within the same block should end at the same time, your lease may be slightly shorter if other flats in the block have already been sold.
Leases are complex legal documents and it will contain all the terms and conditions covering your use and occupation of the property and any additional charges that you may have to pay towards the costs of services and major repairs to the building.
Although we try to use plain English as far as possible in our lease documents, you may need to use a solicitor, citizen’s advice bureau or housing advice agency if you have a problem with your lease or need to fully understand the terms and conditions before completing your purchase of the lease.