Leasehold properties differ from freehold properties. While leasehold properties can be purchased, they aren't owned outright. Instead, the buyer is provided with a lease agreement from the freeholder (landlord) of the building.
If you're looking to buy or sell a leasehold property, you must hire a leasehold solicitor. They will assist with the process and ensure your leaseholder rights are met.
This guide discusses the importance of hiring a leasehold solicitor when buying a leasehold property.
Choosing a Leasehold Solicitor
Hiring a leasehold solicitor is not a legal requirement but is highly recommended, especially if you have no experience with leasehold properties.
There is a lot of additional paperwork and legal requirements involved when buying and selling a leasehold compared to buying a freehold property.
For example, the documents for selling the property include, but are not limited to:
TA7 Form for leaseholders (Leasehold Information Form)
Leaseholder Deed of Certificate for leaseholders (LDoC)
Lease documents
Service charges
Any ground rent demands
A leasehold solicitor will ensure the correct legal processes are followed and the above documentation is completed and submitted on time.
It’s essential to check their accreditations before choosing a solicitor. At Compare My Move, we work with a network of licenced conveyancers who are trusted and verified. This provides peace of mind.
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Leasehold Solicitor Costs
Based on the national UK average house price of £285,000, the average solicitor fee for buying a leasehold property is £1,927*. Solicitor fees when selling a leasehold property are around £1,420. This is based on Compare My Move cost data.
Costs associated with leasehold properties include:
Leasehold property supplement fee - £150
Leasehold management information pack - £150 - £500
Engrossment fee (typically associated with flats and new-builds) - £150 - £250
These costs don’t apply when buying a freehold property.
This is why solicitor fees for leasehold properties tend to be more expensive as there are extra steps involved with the conveyancing process.
Use our Conveyancing Fees Calculator for an estimate of what you may pay.
Conveyancing Process for Leasehold Properties
Once you have an offer accepted on a leasehold property, you can begin the conveyancing process.
The process for buying a leasehold property is similar to buying a freehold property, but there are additional steps involved. These include:
Finding a Leasehold Solicitor
To start the conveyancing process, you must choose a leasehold solicitor. Choosing a solicitor in good time will help to prevent any delays in the process.
All our conveyancing partners have passed our strict verification process. They are regulated by one of the following bodies - SRA, CLC, LSS, LSNI, or CILEx.
Instructing Your Solicitor
Once you have had an offer accepted on a leasehold property you must inform your solicitor. They can then begin the conveyancing process. Solicitors will require your full name, current address, the agreed sale price and your mortgage offer.
They will then receive a contract pack from the seller's solicitor. Once this process has begun you can inform your estate agent.
Conveyancing Searches
Your solicitor must carry out conveyancing searches on the property before your completion day. This ensures the property and the area it is located is safe.
The searches cover environmental concerns such as flooding and mining. The three main conveyancing searches carried out are:
- Environmental Search
- Local Authority Search
- Water and Drainage Search
Completing Additional Leasehold Documents
There are additional forms linked to leasehold buildings that your solicitor will complete and submit on your behalf. These include:
LPE1 Form
The LPE1 Form (Leasehold Property Enquiries Form) is one of the most important documents to complete. It is completed by the freeholder or managing agent of the property being sold.
It discusses important information about the property. This includes pet restrictions, parking, fire safety, and urgent work that needs to be conducted. It can be used as a reference if property disputes arise.
LPE2 Form
The LPE2 Form (Consumer Summary Form) is completed by the freeholder or managing agent alongside the LPE1 Form. It can be referred to as the Buyer's Leasehold Information Summary.
This form includes costs for the compliance certificate and maintenance. It also details the responsibilities of the leaseholder.
Ground Rent
Ground rent is a charge a buyer pays to the freeholder of the leasehold property. It is usually paid every six months, but this depends on individual lease agreements. It can also be charged monthly or yearly.
In 2024, changes were made to ground rent rules under the Leasehold and Commonhold Reform Bill. This provides more rights to leaseholders, including:
- Making it easier to buy the freehold
- Easier to extend leases
- Standard lease extension term of 990 years
- Increased transparency of costs (e.g. service charges and maintenance of communal areas)
The bill introduced peppercorn ground rent, which prevents leaseholders from overcharging for this. Peppercorn rent is minimal and greatly reduces costs paid to the freeholder. The Leasehold Reform (Ground Rent) Act 2022 covers this in more detail.
Deed of Covenants
Leasehold solicitors handle Deed of Covenants which largely affect leasehold properties. This is a management pack that includes all the necessary information relating to the property. The leaseholder will agree to undertake an obligation laid out by the landlord. It provides peace of mind and confidence in your transaction and is a legally binding document.
Paying Your Solicitor
Once a solicitor's role has finished, you will need to pay their fees. As stated, the average solicitor's fees when buying a leasehold property are £1,927. The costs cover the legal services provided and disbursements.
Exchanging Contracts
Once the documentation has been completed, your solicitor and the buyer's solicitor can exchange contracts. This makes the house purchase legally binding. At this stage, you will need to pay your deposit.
Completion Day
Completion day marks the end of the house buying and selling process. This will typically occur around a month after you have exchanged contracts. Payments to the seller will be made and the property ownership will officially change.
While completion day marks the end of the conveyancing process, some payments may still need to be made after this time. This can include Stamp Duty.
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Other Reasons to Hire a Leasehold Solicitor
Leasehold solicitors are typically hired during the purchase or sale of a leasehold property. Other scenarios when they may be required, include:
Appointing a Manager
Leasehold solicitors can help you to appoint a new manager to manage the building. This is done by applying for a First-tier Tribunal under the Landlord and Tenant Act 1987.
Breach of Lease
Landlords or managing agents dealing with a disruptive tenant can hire a leasehold solicitor to assist with a breach of the lease. Breaches can include:
- Noise complaints
- Subletting
- Unauthorised pets
Dispute Resolution
If the landlord and tenant disagree over lease terms a leasehold solicitor can assist with dispute resolution. They will offer legal advice and act on the landlord and tenant's behalf until an agreement is reached. This is done by applying to the First Tier Tribunal (Property Chamber).
Leasehold Development
If leasehold developments take place, a leasehold solicitor should be instructed. This prevents any future legal difficulties or complications. It ensures all developments are carried out correctly.
Do I Need a Solicitor to Renew my Lease?
If you have taken on a shorter lease, it must be renewed at the end of your lease term. It’s recommended to have a lease extended if there are less than 80 years left. Anything under 70 years old can be difficult to remortgage.
If you need to renew your lease, you will need a solicitor to submit the documentation on your behalf. A lease extension costs an average between £7,000 and £10,000.
Use our Leasehold Extension Calculator to find your estimated costs.
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Finding a Conveyancer
At Compare My Move, we can connect you with up to 6 conveyancers to save you up to 70% on your conveyancing costs. All our conveyancing partners have passed our strict verification process for your peace of mind. This means they are all regulated by either the SRA, CLC, LSS, LSNI or CILEx.
Need a Surveyor?
Once you've found a conveyancer, you soon might need the help of a RICS property surveyor. Simply fill in our integrated conveyancing and surveying comparison form to get connected today.
You can compare companies through our integrated conveyancing and surveying form by filling out a few extra steps. We will then connect you with local conveyancers and surveyors to save on the whole process.
*Based on the average service costs for Compare My Move users. See how our data works.
