Freeholding is one of the most popular methods of owning property here in the UK. As a freeholder, you own a plot of land as well as any properties that sit on that land and as a result, are responsible for their upkeep and maintenance. Whether you’ve opted to stay there yourself, or you’re choosing to rent out properties to leaseholders, there are a number of responsibilities you have to maintain. When renting out land and property to tenants, you have to adhere to repairs and maintenance rules, insurance requirements, cleaning needs and more and in this guide, we’ve laid out the key responsibilities you need to consider.
Repairs and Maintenance
If you are the freeholder of a property, you will be under a legal obligation to maintain and repair the property as needed and this is particularly true when leasing out your property to tenants. Whether it’s one property with one family or group in residence, or you own multiple properties or even an apartment building with a number of leaseholders, you will have responsibilities as the freeholder to ensure the safety and quality of the building. While some responsibilities will still fall on the leaseholder, such as the maintenance of their own apartments or areas, there are a few things that you should and can do as a freeholder to improve the property.
The responsibilities could include a number, or all of the following depending on the agreements you draw up with the leaseholder, and your legal obligations:
- The structure of the building
- The roof and any cladding on the building
- Maintenance of shared areas, such as stairways, lifts and shared communal spaces
- Managing utilities for communal areas
- Internal and external cleaning, painting and decorating
- Garden maintenance and pest control for communal areas
- Preparing for and managing major works (according to Section 20)
- Ensuring the building meets all health and safety regulations, as well as energy efficiency standards
Having a good understanding of your local council’s regulations and the country-wide law for leasing out properties will help you manage the points above effectively and ensure you are meeting all of your obligations.
Freeholders Insurance
While there is no strict ‘Freeholders insurance’, as a freeholder, having a comprehensive insurance policy in place will not only provide protection for you and your property but will offer your leaseholders peace of mind and protection in the case of damage and/or costly repairs. Freeholders Insurance offers financial protection and support for you in matters where your property may need repair or rebuilding, where there may be a loss of rent if the leaseholder cannot pay or has to move temporarily (e.g. when repairs are taking place) and any malicious damage.
Most leaseholders will only opt for contents insurance or home insurance when leasing a property as the freeholder is responsible for the building, so freeholders could benefit from having proper landlord insurance. Whether it’s in your agreement with the leaseholder or you do it for your own peace of mind, opting for insurance can protect you financially in case of claims. Whether that’s landlord’s insurance or shop insurance, if you’re renting out your freehold property, it’s best to be protected.
Cleaning And Maintenance Of Communal Areas
As with repairs and maintenance, cleaning communal areas on your property is also often considered to be a freeholder’s responsibility unless otherwise stated in your leasehold agreements. Shared kitchens, for example, may come with clauses in the contracts that residents are expected to maintain a certain level of cleanliness, with freeholders responsible for deep cleaning or for maintaining the cleanliness of stairways, hallways, communal gardens and more. Typical responsibilities regarding cleaning and maintenance include:
- Regular cleaning of communal spaces (e.g. professional carpet cleaning in hallways, guttering etc.
- Maintenance of communal areas such as communal or freeholder-owned furniture
- Garden management for communal areas
There are a number of things you can opt to do as a freeholder to keep the property in top condition, however, it’s also worth noting that the leaseholders are typically responsible for repairs and cleanliness of:
- Internal plumbing
- Leaseholder-owned furniture and electrical appliances
- Paintwork and decoration
- Wear and tear
Ground Rent and Service Charges
Calculating ground rent and any service charges you want to add to the monthly rent can be a complicated and often confusing process for those that haven’t done it before, but it’s a key responsibility as a freeholder that can’t be overlooked. Ground rent charges in particular have been under particularly intense scrutiny lately regarding whether landlords are adequately and fairly calculating costs, so it’s important to make sure that you are doing your research and that any rents are not unfairly high.
Similarly, service charges such as cleaning fees for communal areas or gardening fees for communal gardens are allowed, however, these should be reasonable. In most cases, a freeholder will set a single service fee that, once collected, is then the freeholder’s responsibility to fairly and properly distribute where needed, whether that’s repairs, cleaning, maintenance or improvements.
For more information about insurance as a freeholder, we are on hand to help. Get in touch with Ashburnham Insurance and we can help you find the right policy to suit your property and situation and get you renting out safely and securely as soon as possible.