Start before the layouts are finalised
Give the solicitor the existing title information, proposed flat layouts and the intended ownership structure. Ask the solicitor and designer to reconcile the boundaries on the lease plans with the rooms, garden areas, parking and stores actually being provided. HM Land Registry requires clear plans that agree with the descriptions in the deed. [2]
For the project brief, list every space or service that one owner will need to reach through another part of the property. Use that list to discuss access and maintenance rights with the solicitor, rather than leaving them to be inferred from a coloured floor plan.
Distinguish the flat from the shared building
A lease does more than label the accommodation. It allocates responsibility for repairs and insurance, regulates the use of the property and establishes obligations concerning service charges and other shared expenditure. The distinction between the demised flat and retained structure or common parts is fundamental. [1]
Consider how the roof, exterior, hall, stairs and shared services will be maintained. Ask whether the drafting and cost allocation remain workable when different flats are sold at different times. A proposed share of the freehold does not remove the need to understand each lease. [1]
Prepare registration-quality plans
HM Land Registry's guidance explains the need for suitable scale, orientation and an unambiguous extent. A flat on a particular floor must be identifiable, and any separate garden, parking or storage area must be shown clearly. Avoid plans that disagree with the deed or leave the level of a space uncertain. [2]
Planning drawings and lease plans have different purposes. Before execution, compare the legal plans with the final intended arrangement rather than assuming the first planning layout is still accurate.
New leases granted for more than seven years will normally require registration. Other circumstances can also trigger registration, so the solicitor should apply the relevant HM Land Registry rules to the transaction rather than use the term alone as a complete test. [3]
Ground rent is not the same as a service charge
From 30 June 2022, most new regulated long residential leases granted for a premium are restricted to a peppercorn ground rent, meaning no financial ground rent. The statutory scope and exceptions need checking for the transaction. This does not abolish properly payable service charges or the cost of maintaining the building. [4] [1]
Do not copy a financial ground-rent clause from an older lease without reviewing the current law. [4]
Allow for proposed commonhold reform
The government's toolkit describes a draft Commonhold and Leasehold Reform Bill proposing commonhold as the default for new flats and a ban on most new leasehold flats. That proposal must be distinguished from enacted provisions and their commencement dates. [5]
For a project spanning a legislative change, review the tenure structure before the leases are completed. Do not assume either that the proposed ban is already in force or that today's arrangements will remain unchanged throughout a long development. Obtain transaction-specific legal advice. [5]