When you buy a leasehold property from THCH you become a leaseholder

THCH leasehold properties are sold on long leases which are usually for a period 125 years. THCH usually retain the freehold of all properties.

About the lease

Your lease is a legal document – Each lease varies and as THCH have used many different leases since 1980 we are unable to publish specific details of your own lease.

Your lease sets out you own particular arrangement with THCH. We are happy to provide guidance on interpreting your lease. You may also want to seek legal advice. The Leasehold Advisory Service (LEASE) also provides independent advice on Leasehold matters and can be contacted via www.lease-advice.org/advice

If you require a copy of your lease please contact the customer support team at customerservices@thch.org.uk  or 0207 7803070

Landlord responsibilities 

Generally, THCH are responsible for the main structure of the building, communal areas and services provided to your building or estate.

Depending on your lease, this can include:

• The window frames
• The lifts
• Loft Spaces
• Door-entry systems
• Caretaking
• Grounds maintenance
• Estate lighting
• Block lighting
• Block insurance

Your responsibilities 

Your responsibilities as a leaseholder are set out in your lease

The leaseholder is usually responsible for:

• Maintenance of everything within the property or only serving the property
• Contents Insurance
• Paying Service Charge and other charges set out in the lease
• The behaviour of other members of the household and any visitors
• Obtaining permission to sublet
• Obtaining permission before carrying out works/alterations

Request a copy of your lease

If you are a leaseholder of a property where we still own the freehold, we can provide you with a copy of your lease.

There is a fee of £20 plus Vat (Email) /£40 plus Vat (Hard Copy) for this service.

You will need

• Leaseholder details
• Leaseholder identification and signed authorisation (if applicable)
• Credit or debit card to make payment

Receiving the lease

You can opt to have the lease posted to you or emailed.

Post

If you want to receive the lease by post, and the delivery address is not the leaseholder’s address, then you will need to supply signed letter of authorisation and identification from the leaseholder.

You can supply this to us by email or post after you have submitted the form.

We will not send out the copy of the lease until we have received this.

Email

If you want to receive the lease by email we will do so.

What happens next

We aim to provide a copy of a lease within three working days of receiving the request form and payment.

If you are receiving copy of the lease for the leaseholder, we will not release the copy until we have received signed authorisation from the leaseholder.

Click here to request a copy of your lease 

Your lease will stipulate in which cases you are required to get permission from THCH before carrying out alterations to the property

Examples of such work include:

• replacing windows or external doors
•  installation of central heating
•  removing or building walls or chimney breasts
• laying a driveway
• building a conservatory
• replacement of kitchen or bathroom

Please refer to our Alterations guidance leaflet for more information - it can be found here:

Tenant Alterations Guidance Leaflet.

As well as getting our permission you may also need to get any relevant building control approval and planning permission. If you make any improvements or alterations without first obtaining written permission you will be breaking the terms of your lease. In cases where permission has not been granted or works have not been carried out to suitable standards, THCH have the right to reinstate the property to its original condition at the expense of the leaseholder.

To apply for permission for alterations please complete the attached:

Tenant Alterations Application Form.

The form is to be completed by Tower Hamlets Community Housing residents only. Any questions about future alterations to a property from prospective buyers will need to go through solicitors.

Re-Mortgaging

 

Leaseholders and Shared Owners will from time need to consider re-mortgaging in a number of different ways :

• Re-mortgage - Changing to a different lender usually following expiry of a fixed rate deal

• Further Advance - Borrowing additional amounts against equity. This is only allowed for certain things (eg) Home Improvements

• Re-mortgage and Further Advance - Changing lender and increasing borrowing.

NB - If you are staying with the same mortgage provider and not increasing borrowing then we do not need to be informed of your re-mortgage.

Independent Financial Advisor (IFA) - It is really important that you seek the advice of an Independent Financial Advisor (IFA) and preferably one who has experience in Shared Ownership mortgages and Leases. Information on IFAs familiar with Shared Ownership is available.

The next steps - There are different arrangements dependent on whether you are a Shared Owner or a Leaseholder

1. Shared ownership

It is really important that you seek the advice of an Independent Financial Advisor (IFA) and preferably one who has experience in Shared Ownership mortgages and Leases. Information on IFAs familiar with Shared Ownership is available.

Re-mortgage – Changing lender with no increase in amount

If you are a Shared Owner you will need THCH permission before re-mortgaging.

Please complete this Shared Ownership Remortgage form   and attach a copy of your mortgage offer and a redemption statement from your current lender. Your IFA will be able with these. A fee of £75 plus Vat is payable at this point to cover costs of administration of the re-mortgage process.

You will also need to briefly explain the reasons for wanting to re-mortgage.

Return the completed form to

Tower Hamlets Community Housing

 285 Commercial Road

E1 2PS

Or customerservices@thch.org.uk

We will write to you within 10 working days informing you of our decision. If we refuse your request we will arrange to speak with you about the reasons why. If we give permission you are free to continue with the re-mortgaging process.

Completion

Your solicitor or mortgage lender will notify us of completion in order to register the resulting charge. We will receipt this and update our records. The transaction is then complete.

Further advance - Borrowing additional amounts

 

If you are requiring further borrowing on your mortgage it is very important that you get the necessary permission from THCH before incurring any costs.

Please complete Shared Ownership Remortgage form   and attach a copy of your mortgage offer and a redemption statement from your current lender. Your IFA will be able with these. A fee of £75 plus Vat is payable at this point to cover costs of administration of the re-mortgage process.

You need to provide a written explanation as to why you are increasing borrowing. Please give as much details as possible of any improvements you plan to make, together with quotes, invoices or receipts for the work being carried out

Return the completed form to

Tower Hamlets Community Housing

 285 Commercial Road

E1 2PS

Or customerservices@thch.org.uk

Please note, we do not approve further advances for:

• Consolidating unsecured personal loans or debt
• Purchase of non-housing items e.g. cars or holidays
• Settlement of Arrears (except in exceptional circumstances)

We will write to you within 10 working days informing you of our decision. If we refuse your request we will arrange to speak with you about the reasons why. If we give permission you are free to continue with the re-mortgaging process.

Completion

Your solicitor or mortgage lender will notify us of completion in order to register the resulting charge. We will receipt this and update our records. The transaction is then complete.

Re-mortgage and further advance

 

If you are requiring a change of lender and increased lending you should complete this Shared Ownership Remortgage form and attach a copy of your mortgage offer and a redemption statement from your current lender. Your IFA will be able with these. A fee of £75 plus Vat is payable at this point to cover costs of administration of the re-mortgage process.

You need to provide a written explanation as to why you are increasing borrowing. Please give as much details as possible of any improvements you plan to make, together with quotes, invoices or receipts for the work being carried out

Return the completed form to

Tower Hamlets Community Housing

 285 Commercial Road

E1 2PS

Or customerservices@thch.org.uk

Please note, we do not approve further advances for:

• Consolidating unsecured personal loans or debt
• Purchase of non-housing items e.g. cars or holidays
• Settlement of Arrears (except in exceptional circumstances)

We will write to you within 10 working days informing you of our decision. If we refuse your request we will arrange to speak with you about the reasons why. If we give permission you are free to continue with the re-mortgaging process.

Completion

Your solicitor or mortgage lender will notify us of completion in order to register the resulting charge. We will receipt this and update our records. The transaction is then complete.

 

2. Leaseholders

 

As a Leaseholder you do not need THCH permission to Re-mortgage or get a further advance but must let us know of your intention to do so.

Please complete a Link - Leasehold Remortgage Form  .You will also need to pay an administration fee of £50 plus Vat at this point for administration of the transaction.

Return the completed form to

Tower Hamlets Community Housing

 285 Commercial Road

E1 2PS

Or customerservices@thch.org.uk

Your solicitor or bank will notify us when your re-mortgage is finalised and we will update our records.

What is a Lease Extension?

• Most THCH Leasehold properties start off with a lease of either 99 or 125 years. The number of years remaining on the lease is known as the term.

• The Leasehold and Urban Reform Act 1993 sets out a number of rights for Leaseholders to extend their lease term.

• Most Leaseholders have a statutory right to increase their Lease term by 90 years if the property is a flat and by 50 years if it is a house.

• There is a premium to pay which is dependent on the length of Ground Rent, Value of Property and remining term of the Lease.

If a Lease has less than 80 years term remaining there are a number of issues that can arise:

• At 80 years or less remaining, there is an additional premium payable in the form of “marriage value”

• Leaseholders with leases less than 80 years can have difficulty obtaining mortgages. This in turn can affect the ability to sell a property

• In general terms a leasehold property will decrease in value as the lease term decreases.

Why might I need a Lease Extension?

• To avoid additional fees if the lease term falls below 80 years.

• To assist in the sale of a property.

 

Lease Extensions – Frequently asked questions

 

Who will decide the price of my lease extension premium?

A valuation is carried out by a qualified RICS Valuation Surveyor who will take into account a number of factors before making a calculation of the price payable. You will need to appoint a registered valuer. THCH works with a number of valuers who have experience in lease extension work.

 

Where can I get advice from before making an application to extend my lease?

It is very important to obtain independent advice before commencing an application to extend your lease. You can obtain free and independent advice on the procedure from:  Leasehold Advisory Service 31 Worship Street, London EC2A 2DX T: 0207 3745373 W: www.lease-advice.org

 

What are the qualification criteria for a Statutory Lease Extension?

A leaseholder will generally qualify for a statutory lease extension if:

• They have owned the lease for over two years
• They are a 100% Leaseholder
• The lease is not restricted by a Head Lease – THCH can advise on this

Do I need a solicitor?

THCH strongly advise that you engage a solicitor to help you with your lease extension. If you do not already have a solicitor, THCH work with a number of solicitors with experience in lease extensions.

What costs can I expect during the lease extension process?

There are a number of costs that will be payable by the leaseholder during the lease extension process (all estimated):

• Valuation Fee - £350/£450 Plus Vat - Payable direct to your valuer
• THCH Legal Fees - Maximum £2000 Plus Vat
• THCH Admin Fee - £250 Plus Vat - collected at completion
• Premium - As per valuation
• Leaseholders legal fees - £400 plus Vat

With the exception of the valuation fee all costs are payable upon completion of the transaction.

I am a Shared Owner - Do I qualify for a Lease Extension?

No – Shared Owners do not qualify for a statutory lease extension.

Independent Financial Advice

A Leasehold extension process can be expensive and have implications in terms of longer term finances, mortgages, etc. THCH advise that you seek the advice of an Independent Financial Advisor (IFA).

 

Starting the Lease Extension Process?

Contact us at customerservices@thch.org.uk to commence the process.

The lease will usually determine that THCH, as freeholder, will insure the building structure. Your service charge will include the insurance costs relating to your property. Details of the insurance cover is available on request.

The policy certificate is available here:

Insurance Policy Certificate.

You must let us know if there are any alterations made to your property because this may affect any claim. Please let us know if:

• you no longer live in the property (subletting requires formal permission)
• you are carrying out internal alterations (permission required)
• you have carried out any external additions with permission (eg) Conservatory

Please note that the insurance included with your service charges or without only covers the structure of the building, including fixtures and fittings. You must make your own arrangements to protect the contents of your flat and personal possessions. If you wish to make a claim under the buildings insurance, you should in the first instance contact our insurer JLT at jlthousing@broadspiretpa.co.uk or by telephone on 0345 266 9660.

Notifying us of your sale

It is always advisable to inform us of your proposed sale and provide us with the name of the solicitors involved. This will enable us to chase for the appropriate legal documentation if required and to make sure that all appropriate checks are made before a sale takes place.

All Service Charges, Ground Rent and other fees must be settled before a sale is completed

As part of the Sales process a purchaser’s solicitor will request THCH to complete an LPE1 enquiries form in relation to the property. This includes information on historic and future service charges, planned works, insurance, outstanding disputes, Fire Risk Assessment and other safety related matters. This is a standard form and an example is available at link – LPE1

When we receive a notice of assignment from the purchaser's solicitors, we will arrange for our records of ownership to be amended.

Right of first refusal  

If you bought your flat prior to 18 January 2005 you do not need our permission to sell.

If you bought on or after 18 January 2005 then you are required to offer it for sale back to THCH or another Registered Provider before offering it on the open market. This a requirement of the Housing Act 2004.

Shared Ownership Sale

If you have a Shared Ownership property then there are different requirements when wanting to sell your property. These can be found in the Shared Ownership subtab.

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Service charges Service charges are charges to Leaseholders payable to the Landlord in return for services provided under the terms of each individual lease.

These can include:

• Day to day maintenance and repairs of communal areas

• Insurance

• Communal lighting – electricity and repairs

• Cleaning of common areas

• Grounds maintenance

• Reserve/Sinking fund – A fund to help with future large items of expenditure

• Costs of Management THCH have made a commitment to

• Comply with legislation with regards Service Charges

• Issue estimated service charge information and demands in accordance with each lease.

• Issue a Statement of Account within 6 months of the end of the year.

• Service charges will be passed on to leaseholders within 18 months of the charge becoming incurred/ due

I live on the ground floor so why should I pay towards the lift costs?

The obligation to pay towards the upkeep of facilities is related to the right to use those facilities. You have a right to use the lift whether you need to use it or not. A THCH lease and tenancy agreement provide for all lift costs to be met by all residents (tenants and leaseholders)  to cover a proportion of all communal costs.

So what? I never need it.

Unfortunately, the lift is classed as communal service. These are payable by all residents of a building, regardless of whether or not you use the service. This would also apply to other communal facilities, such as a garden.

Major works

From time to time we will need to carry out major works to the building or estate that your leasehold property is in Your lease will establish if you are liable contribute towards the costs of such work. If major works are required and you are liable to pay for them, THCH are obliged to carry out formal consultation with you. This will allow you to feedback on the works and, if appropriate, nominate a contractor. This consultation process is commonly referred to as Section 20 consultation.

Examples of major works include:

• repairs to or replacement of the roof, windows or communal areas
• external decorating
• painting of internal communal areas
• roof works

Ground rent

Ground rent is a specific requirement of the lease and must be paid on the due date. It is not an element of the Service Charge

Subletting my Leasehold Property

Your lease sets your rights in terms of subletting and what is required to enable you to do so.

Please note - Shared Ownership leases DO NOT allow subletting

Why do I need to register a Sublet? 

• Leases usually require you to do so
• THCH have Health and Safety responsibilities and information on who is living in each property and under what terms is very important
• When a property is sublet there are implications in terms of Insurance
• A robust approach on subletting allows THCH to communicate more effectively with customers who do not live in their properties

How do I register my sublet?

We ask that Leaseholders wanting to sublet complete a form below:

CLICK HERE.

A completed form should be sent to customerservices@thch.org.uk or Customer Support Team, THCH, 285 Commercial Road, London, E1 2PS

Deed of Covenant Leaseholders are required to provide a Deed of Covenant between THCH and the tenant to ensure that all lease terms are complied with. The fee for registering the sublet and for the drafting of the deed of Covenant is currently £125.00 plus Vat. Completed Subletting Registration Forms should be sent to customerservices@thch.org.uk or Customer Support Team, THCH, 285 Commercial Road, London, E1 2PS.

Applications should enclose payment for the Registration Fee and a Deed of Covenant signed by the tenant.

Further notes

• Any breach of lease by the sub-tenant will result in enforcement action against the leaseholder
• Leaseholders remain responsible for all payments relating to the property.
• Leaseholders must seek independent advice on managing gas safety, electrical appliances, fire protection and any other related safety matters
• Leaseholders are encouraged to register every sublet should there be a change of tenant as this allows more effective management of the property
• Leaseholders should inform any relevant mortgage lender of subletting to ensure that it complies with mortgage terms.
• Leaseholders must inform THCH if their property is uninhabited for periods of more than 30 days as there are insurance implications in such circumstances.
• A fee may be chargeable as set out in the terms of the lease.
• The Leasehold Advisory Service (LEASE) is an independent advice service and may be able to help you with any queries. Click the link herefor further details.

Selling your Shared Ownership Home

The sale of any Shared Ownership property needs to satisfy numerous criteria which can confuse Purchasers and Sellers alike. The Information below is designed to explain the process of selling your Shared Ownership home and to clarify the process required when selling your THCH Shared Ownership property.

Shared Ownership Leases contain nomination clauses which allow Tower Hamlets Community Housing (THCH) a period of time (or “nomination period”) in which to find a suitable buyer for the property should a Shared Owner wish to sell. This clause is included to ensure that Shared ownership properties remain as that tenure and are not lost to full market sale.

Please note – Some Shared Ownership Leases allow for THCH to buyback Shared Ownership properties before they are marketed. THCH do not take up this option at this moment in time.

Tower Hamlets Community Housing use Savills to manage the whole Resales process for Shared Owners. Information on their service can be found at https://www.savills.co.uk/services/buying-or-selling/shared-ownership.aspx and the process below is described below.

Selling your property is an expensive transaction. You should fully consider all costs involved including:

• THCH/Savills Agent Fees – Currently £2000 plus Vat (£2400)
• EPC -  (Est. £60/£100)
• Valuation Cost - (Est.£300/£400)
• Solicitors fees – See Below
• Mortgage/IFA – See Below

The Shared Ownership Resales Process

All Shared Ownership Resales are governed by the Home and Communities Agency in terms of the price at which any transaction takes place. This is to ensure that customers get a fair price and that the affordable element of Shared Ownership is maintained.

1. Valuation

You will require a valuation in order to start the process of selling your Shared Ownership property:

• A valuation is your responsibility and you should make payment directly to the valuer
• It must be carried out by a qualified member of the Royal Institute of Chartered Surveyors (RICS)
• Please note – An informal valuation by an Estate Agent is not valid
• Please note – A mortgage valuation carried out on behalf of a Bank or Building Society is not valid for Resale purposes
• THCH is aware of a number RICS surveyors who have experience of Shared Ownership. However, any RICS qualified surveyor can carry out a valuation for you.

The valuation you provide must meet the following guidelines:

• The surveyor should provide comparable evidence of at least 3 similar properties and sale prices, which must be dated within the last 6 months.

• Valuations are generally valid for 3 months from the date of each report.

• It will be necessary for the valuer to know the length remaining on the shared ownership lease. If you are unsure of this please contact us at customerservices@thch.org.uk

 

Improvements and valuation

• The valuer should be instructed to disregard the value of any significant improvement that a shared ownership customer has made. This is dependent though on the amount of value added and not on the expenditure incurred. For example, replacement of a kitchen on a like for like basis is unlikely to add value to a property

• It is a condition of Shared ownership leases that alterations and improvements require the consent of THCH. For that reason any works completed which have not been pre-approved will not be included within a Staircasing valuation. Retrospective consent may be considered but supporting evidence would be required and be maybe subject to an admin fee

 

2. Deciding to Sell

When you have received your valuation and have decided to proceed with selling please complete an Instruction to Sell Form and return it to

Tower Hamlets Community Housing

285 Commercial Road

E1 2PS

Or customerservices@thch.org.uk

THCH will then forward to Savills with all necessary information and the process of selling your property will begin in earnest.

 

3. Finding a Buyer

Information on services provided by Savills are at https://www.savills.co.uk/services/buying-or-selling/shared-ownership.aspx

Upon receiving instruction from THCH to market your property Savills will:

1. Arrange photography of the property directly with yourself.

1. Market the property on various property portals – advertising viewing times agreed with you.

Please note – Carrying out viewing is your responsibility

1. Financially qualify all applicants before they attend the viewings - (seller to carry out the viewings).

1. Request all buyers complete a reservation form, application form & initial financial assessment.

1. Carry out priority allocation process, confirm with THCH and offer property

1. Confirm THCH are happy with the buyer with the highest priority score – asking THCH for their authority to proceed.

1. Complete full financial assessment of application

1. Issue Memorandum of Sale to your solicitor and our appointed solicitor:

Trowers & Hamlins LLP

3 Bunhill Row

London

EC1Y 8YZ

 

4. Appointing a solicitor

You will need to appoint a solicitor to act on your behalf on your Sale

Savills will be able to advise on use of a solicitor. THCH advise that customers use a solicitor who is experienced in Shared Ownership transactions specifically.

5. Completing the Sale

When a buyer is identified Savills will:

1. Progress the sale through to exchange of contracts, keeping you regularly updated
2. Ensure a mutually convenient completion date and liaise with all relevant parties

1. Organise handover of keys on the completion date

Please ensure that you:

1. Leave any keys and fobs, and relevant information about your home, for your buyer on completion.

1. Take meter readings when leaving.

1. Cancel relevant Direct Debits/Standing Orders to THCH

Tower Hamlets will request payment of any outstanding rent, insurance and service charges upon completion

Please note - The marketing/management fee for the Sale (£2400) will be requested at this and deducted from the sale proceeds by solicitors

6. Selling you Shared Ownership property –  Key Facts

• EPC  – It is a legal requirement to have an Energy Performance Certificate (EPC) when you sell your home. It is your responsibility to provide the certificate. If your home is less than 10 years old, you may already have a current report. You can check this online at https://www.epcregister.com.

• Maintenance – It is likely a new buyer will request a current gas and electrical certificate. If you haven’t had a recent inspection, we recommend you arrange this.

• Your buyers Solicitor will raise enquiries to your solicitor. They will also request other searches such as Local Authority(new developments), Environmental and Drainage/Water.

• Enquiries sent to your Solicitor will include questions about neighbourhood and boundary disputes, planning permissions, rights of way, restrictive covenants, guarantees, utilities, items included, lease details, service charges etc. You may be required to answer certain questions on these matters and it is your responsibility to provide this information to them as best you can.

• If you pay service charges and year end accounts have not been finalised, your solicitor may request a retention to be held to cover any possible shortfall.

• You should aim to complete within three months of the memorandum of sale being issued. There can be delays and timeframes are dependent on how quickly the solicitors handle the transaction, how quickly the buyer’s mortgage offer is issued, and whether you’re making an onward purchase.

• Delays in completion could mean that you are asked to pay for an updated valuation report as generally they are only valid for 3 months from issue.

Using another Agent

 

In the unlikely event that Savills are unable to find you a buyer within the nomination period, you may choose to put your home on the open market with another estate agent.

If you do decide to sell your shared ownership property on the open market there are some key things to consider:

• The property will be advertised at full market value

• There may be stamp duty implications as selling this way involves purchasing the unowned share

• There may local restrictions of For Sale boards being erected

• The valuation price must be adhered to. Any variance from the valuers price may lead to a claim against the seller.

 

Personal situations change from time to time and customers need assistance in updating the ownership details of a property. An example of this would be where Shared Owners decide to separate and one decided to transfer ownership into their name alone.

This is a legal process which will require the input of solicitors by both THCH and the Shared Owner.

In such situations it is important to get sound Financial advice. THCH advise shared owners considering taking on additional responsibility through such transactions to use an Independent Financial Advisor (IFA).

You will also need to engage a solicitor to ensure that this important transaction is handled properly.

The permission of any outgoing shared owner is required before THCH can authorise removal of their name from the records. Please complete a request form at https://www.thch.org.uk/so-joint-to-sole-application-form/  and send it to:

Tower Hamlets Community Housing

285 Commercial Road

E1 2PS

Or customerservices@thch.org.uk

Shared Ownership – Buying Further Shares

What is Staircasing?

• Shared Ownership leases allow for purchase further equity providing that it is affordable for the customer
• This process is called Staircasing
• The rent charged monthly will reduce as the equity share increases.
• Each lease varies but generally you are able to purchase in a minimum of 10% blocks and can purchase up to 100% of the property
• The price paid for shares is dependent on the current market value of the property.

Is Staircasing right for me?

• Before starting out on the staircasing process it is important to consider your financial position
• It is really important that you seek the advice of an Independent Financial Advisor (IFA) and preferably one who has experience in Shared Ownership mortgages and Leases.
• A Standard financial assessment will be carried out by the IFA to ensure that the transaction is affordable and sustainable for you.

How much does it cost?

It is very important to consider all of the costs involved. These include:

• Valuation
• Legal Fees
• Mortgage/IFA fees
• Stamp Duty (in some cases)
• There is a Fee of £125 plus VAT payable to THCH for each staircasing transaction

Please note - any arrears of Rent and Service Charge must be cleared before additional shares can be purchased.

How much can I own?

Your lease sets out how much of the property you can purchase and what the minimum amount is. If you are unsure then please contact us for clarification

Staircasing Process – can be viewed at Staircasing Process

If you would like proceed with staircasing or have any queries please contact us at customerservices@thch.org.uk

Please note - if you are a Shared Owner of a flat and staircase to 100% there will still be service charges to pay to THCH