Leaseholding frequently asked questions

Contracts and responsibilities

• What is a lease?
• What are my responsibilities as a leaseholder?
• What are the council's responsibilities?
• I am letting/selling my flat, do I need to notify the council?

Service charge and ground rent

• What does the service charge cover?
• How are service charges worked out?
• How is my service charge calculated?
• What is ground rent?
• How do I pay my service charge invoice?
• What happens if I don't pay my service charge on time?
• I want to query my bill/invoice.
• When will I receive my service charge bill/invoice?

Insurance, major works and repairs

• Do I have to pay for major works?
• What are the payment options for major works invoices?
• How do I report a repair?
• Am I insured and what for?
• Can I make improvements/repairs to my flat?

Contracts and responsibilities

What is a lease?

A lease is a legally binding contract between a landlord (the council) and a leaseholder (you). It sets out the rights and obligations of both parties. It is therefore enforceable - neither party can simply walk away from a lease.

Before you purchased your property, your solicitor should have explained your lease in full so that you understand both your responsibilities as a leaseholder, and the council's responsibilities as a landlord. You should have been given a copy of your lease by your solicitor.

The lease will have a plan attached showing your property, and will also refer to any communal areas that you may be entitled to have the use of, in common with other occupiers of flats in your area.

A lease usually runs for 125 years, and in most cases are dated from the first time a property was sold in the block.  If you bought your home from another leaseholder, you will have the right to live there for the number of years left on the original lease.

What are my responsibilities as a leaseholder?

As a leaseholder you are responsible for keeping the inside of your home in a good state of repair.

This includes:

• plaster and other surfaces to floors, walls and ceilings
• decoration inside your home
• internal doors and door frames
• fixtures and fittings such as kitchen units, baths, toilets and sinks
• heating systems, pipes, water tanks, cables, plumbing, drains and radiators
• repairing and maintaining gas and electrical fittings and appliances
• sweeping and cleaning of flues or chimneys
• your garden (if you have one)

You must arrange for any repairs and maintenance work to the inside of your home to be carried out and pay the full cost of this work.

You must also:

• pay towards the cost of repairing and maintaining the structure, the outside of your home and any communal areas (usually this is done via your service charge but occasionally a supplementary service charge will be levied)
• allow access to your home to inspect the condition of the building
• get written permission from us before making any structural alterations or additions to your home
• only use your home as a private dwelling
• not cause nuisance to your neighbours
• not misuse any garden area or erect any fence on any shared area or shared right of way
• not obstruct any communal areas or access to the building

As the leaseholder/tenant you are responsible for the behaviour of any visitors, lodgers or tenants who may visit or stay in your home.

We strongly recommend that you arrange to have your gas appliances serviced once a year by a CORGI registered heating engineer.

What are the council's responsibilities?

Your lease contains full details of our responsibilities. Depending on the type of lease, the following list may vary. We are responsible for repairing the structure of the building, and the outside of your home, including:

Communal areas

• entrance halls, stairways and landings
• communal facilities such as lifts and door entry systems
• communal areas and drying areas
• any shared external doors including sheds
• refuse areas
• communal electric/lighting/heating
• mains water plumbing and drainage within communal areas

Structure of the building

• structure of external walls, roofs and foundations
• window frames and chimney stack
• doors - front and back and balcony

Outside your home

• outside painting
• gutters, down pipes and snow boxes
• outside woodwork including repairs to external doors and sheds
• communal TV aerial (if applicable)

Although we are responsible for arranging and carrying out repairs and maintenance work, under the terms of your lease you must contribute to the cost through your service charge.

We will provide clear details of how you will be charged for any works carried out to your property or the block.

I am letting/selling my flat, do I need to notify the council?

It is important that we have the correct details of the owners of our leasehold flats. Please make sure that you keep the Leasehold Officer up to date of any changes in ownership, names and telephone numbers.

Service charge and ground rent

What does the service charge cover?

Service charges are paid by leaseholders to cover our costs of repairing, maintaining and improving both communal areas and the external fabric and structure of the building, and the provision of insurance cover and services to the property.

It may include:

• administration costs
• external painting
• communal lighting
• caretaking services
• insurance against certain types of damage
• structural repair and maintenance of the building
• repairs to communal area
• any work needed to correct or replace structural problems with the building and its associated parts

How are service charges worked out?

Service charges are worked out in annual cycles that correspond with the financial year 1 April to 31 March.

When you purchase a leasehold property, on completion you will be required to pay a service charge. The period of service charge will be from the date of completion to the next 31 March of that financial year.

Each subsequent year you will be sent an invoice for service charges and a schedule.

The schedule shows a breakdown of the costs of the service charge. This includes an amount for:

• special services
• estimated maintenance costs
• insurance premium
• management costs

The amount of service charge shown on the schedule is the full annual service charge for the year.

You should always budget to pay the full amount of service charge.

In some cases you may benefit from a reduced bill.

This will only happen where little or no maintenance has been carried out to the block of flats where you live. The difference between the estimated cost shown on the schedule and the actual cost of the work is held 'in trust' in a property account.

Where the balance of the account holds less than £300 in credit, you will receive an invoice for the full service charge.

If the account holds between £300 and £749 then it is likely that this will be sufficient to cover the expected maintenance costs. In such cases, you will receive an invoice requesting payment for the insurance premium and management charge only.

If the account holds £750 or more you will not receive an invoice.

Invoices are usually issued in October/November.

The property account is an interest making account and any amount held in credit gains interest.

How is my service charge calculated?

The charge is based on estimated costs for maintenance for the year and actual charges for the buildings insurance premium and management charge. A schedule showing the breakdown of these charges is provided with the invoice.

The principle behind invoicing leaseholders on an estimated basis each year is that they are charged a standard amount for which they can budget. The alternate method of charging the actual costs would lead to wildly fluctuating bills each year.

At the end of each financial year the actual costs incurred and payments made for each leasehold property is calculated. Where the costs relate to communal areas or facilities the costs concerned are apportioned based on the number of properties in each block. These figures are recorded in an individual leasehold property account with any difference between the amount invoiced and the actual costs incurred being held in trust by the council. Leaseholders are sent a statement of their property account together with a breakdown of the actual costs incurred at the end of each financial year.

To prevent substantial credit balances accruing, we operate a system of 'reduced invoices'. Where there is a credit balance on a leaseholder's property account of £300 or more the leaseholders invoice for the following financial year will be reduced so that they are only charged the management charge and insurance charge. If the property account is more financial year then £750 in credit then the leaseholder will not be invoiced in the following financial year.

What is ground rent?

This is the rent for the land that your property is on and only applies to leasehold properties.

In addition to your annual service charge bill, a separate bill for ground rent will be sent out annually by us for ground rent. It costs £10 per year. For any queries about ground rent please contact the Corporate Property Department: 01792 637655.

How do I pay my service charge invoice?

Pay online now Pay

Internet banking or BACS transfer

Pay to: City and County of Swansea

Sort Code: 30-00-00

Account Number: 00283290

Bank: Lloyds Bank, 802 Oxford Street, Swansea,SA1 3AF

Quote the invoice number on each payment.

For CHAPS, IBAN, BIC or DUNS details please telephone Accounts Receivable on 01792 635847 or email accounts.receivable@swansea.gov.uk

By automated telephone payment facility

Tel 0300 456 2765 to make a payment by debit or credit card using the 24 hour facility. Select 'council invoices' option.

By post

Cheques or postal orders are payable to 'City and County of Swansea' and should be sent to: The Chief Cashier, Finance Dept, Civic Centre, Swansea, SA1 3SN. Please cross all cheques, write the invoice number on the reverse and attach the remittance slip at the bottom of your invoice. For a receipt, please return the whole invoice with your cheque. Do not send cash or post-dated cheques.

In person

At the Civic Centre or any area housing office (Gorseinon only accepts card payments).  

Post Office payments

Pay at any Post Office (fee payable) quoting the invoice number and the council's Girobank account number: 466 4450.

Payment by standing order (monthly)

If you are unable to pay your bill in full or it is more convenient for you to pay monthly by standing order through your bank, this can be arranged by telephoning the Finance Section on 01792 635847 who will be happy to set this up for you. 

Late payments

Please note that we may charge interest of 8% plus the Bank of England base rate on unpaid balances over 28 days old.

Cards NOT accepted: American Express, Diners Club, Electron.

What happens if I don't pay my service charge on time?

You will be sent a reminder. If you are experiencing financial problems and are finding it difficult to pay your service charges, please contact the Leasehold Officer  who can advise you. You will be able to make arrangements to pay monthly if this is more convenient for you.

If we do not hear from you we will consider taking further action such as:

• county court proceedings
• informing your mortgage lender of the arrears
• court proceedings to end your lease if you do not keep to an agreement to pay the debt

These proceedings may incur legal costs and add to your financial problems. It is important that you work with us to sort out the problem and inform us of your current position. If you do not, legal action may be taken.

I want to query my bill/invoice.

Please contact the Leasehold Officer.

When will I receive my service charge bill/invoice?

Service charge invoices are usually issued in October/November.

Insurance, major works and repairs

Do I have to pay for major works?

Work that is large-scale and carried out on a planned basis, such as roof replacement, repairs and decorations, replacing a lift, repairing or replacing windows are referred to as 'major works'.

As your landlord, we have an obligation to repair, maintain and improve the main structure and common parts of the block and estate. We have to divide the costs of doing this between the properties affected. You may be sent a supplementary service charge invoice for your share of the costs of the works.

Your share of the cost of major works is still a service charge under the terms of your lease; however, if the cost is over a certain figure, we have to carry out a consultation procedure to be able to charge leaseholders appropriately. The procedure is known as 'Section 20 consultation', as it is set out in Section 20 of the Landlord and Tenant Act 1985. These consultation requirements were amended by the Commonhold and Leasehold Reform Act 2002 Wales.

What are the payment options for major works invoices?

We recognise that it can be difficult for some leaseholders to meet their share of the costs of major works. There are a number of different options for paying your major works invoice including:

1. Payment of the invoice in full
2. Loan from your mortgage lender/bank or building society
3. Our Leaseholder Assistance Scheme
4. Statutory Loan Scheme
5. Help from the Department of Work and Pensions

1. Payment of the invoice in full

You can pay the invoice in full by contacting the Finance Section, and quoting the invoice number to them, they will then take a payment from you for the full amount.

2. Loan from your mortgage lender/bank or building society

If you have a mortgage secured on your home, you may be able to apply for an additional loan from your mortgage lender and ask for your home to be re-mortgaged.

If your mortgage lender agrees to give you an additional loan, you may be able to extend the mortgage period and pay the same monthly payments or increase the monthly payment to cover the additional loan. 

You should contact your mortgage lender directly to discuss this option.

If you do not currently have a mortgage it may be possible for you to take out a mortgage or loan to meet your major works costs.

We strongly advise leaseholders to seek independent financial and legal advice before entering into any agreement to secure a mortgage or a loan on their home.

3. Our Leaseholder Assistance Scheme

We may be able to provide leaseholders with a loan to spread the cost of major works over a period of time.

In circumstances where leaseholders are unable to afford the repayment of a loan, we may be able to provide assistance on an equity share basis.

Leaseholder loans

Leaseholders can apply for a loan from us to cover the cost of major works. Loans are given on a fixed interest rate which is set by the Government.

The maximum repayment period for the loan is dependant on the loan amount:

• up to 10 years, in respect of a loan of less than £10,000
• up to 20 years, in respect of a loan of £10,000 or above, but less than £20,000
• up to 25 years, in respect of a loan of £20,000 or above

These loans are secured by a legal charge against your property and a fee of £550 to cover our administration costs and the legal expenses will be added to the amount of the loan.

We strongly advise leaseholders to seek independent financial and legal advice before entering into any agreement to secure a loan on their home.

Please be aware that failure to make the repayments due on the loan could lead to us taking recovery action against you for the full outstanding amount.

Loan on an equitable share basis

If you are unable to afford the repayment of a loan, we may be able to provide assistance on an equity share basis. 

This means we will "loan" the leaseholder the money to pay for the major works invoice but will not require repayment of the loan until the leasehold property is sold/assigned or remortgaged, or upon the death of the leaseholder. 

Our interest in the property is secured by putting a legal mortgage or charge on the property. The amount of the loan is treated as a percentage share of the market value of the property.

Example of an equity share loan

The example below shows how an equitable share loan would work:

1. You require a loan of £15,000.
2. Your property is valued at £60,000. This means that we would be loaning you 25% of the value of the property.
3. When the property is sold (or the loan becomes repayable for another reason) you will need to repay us 25% of the selling price. Therefore if your property is sold for £80,000, you would have to repay £20,000. If it is sold for £40,000, you would have to repay £10,000.

The actual amount to be repaid could be more or less then the original amount of the loan depending on the value of your property at the time the loan is repaid.

A valuation fee of £400 will be added to the amount of the loan and a fee of £550 to cover our administration costs and the legal expenses will be also added to the amount of the loan.

We will also need to carry out legal searches to determine whether you already have any other charges registered. If you do, we may have to get permission from these other parties before another charge can registered and these parties may charge a fee for this permission which you will be responsible for paying.

4. Statutory Loan Scheme

As well as our own Leaseholder Assistance Scheme, we are required to provide a Statutory Loan Scheme for leaseholders who meet certain criteria. 

To be eligible:

• your lease start date must be less than 10 years ago,
• the total cost of your service charge for the year is more than £2,330, and
• the maximum amount you can borrow is £30,990.

These limits are increased each year in line with inflation.

The terms of statutory loans such as repayment periods and interest rate are set by the Government. The current interest rate is 3.13%.

You will be charged an administration fee of £100 (which will be added to the amount of the loan) and you will also be responsible for your own legal costs. The loan is secured by way of a charge on the property.

For more information on any of the payment options, please contact the Leasehold Officer.

5. Help from the Department for Work and Pensions

Leaseholders who are receiving Income Support, Income Based Jobseekers allowance or Pension Credit may be entitled to help from the Department for Work and Pensions to pay for major works.

The Department for Work and Pensions will not usually pay for the cost of the major works but may be able to help you pay any interest incurred on a loan or a mortgage taken out to pay for your major works bill.

There are several ways that you can get help. If you are entitled they will sometimes allow all or part of the cost as a lump sum payment or they pay this by instalments spread out throughout the year.

If they cannot allow the payment they may advise you to take out a loan or mortgage but if you do this they may only be able to give you the interest paid on the loan.

You should inform the Department for Work and Pensions as soon as you get your invoice.

For more information you should contact the local Department for Work and Pensions directly on 0845 6060265.

How do I report a repair?

To report repairs that are our responsibility please complete our online form: Request a housing repair

Emergency repairs

Am I insured and what for?

It is a condition of your lease that we arrange buildings insurance cover. This means you cannot arrange your own building insurance cover. At present, Ocaso SA provide this cover for all leasehold properties.

Your share of the building insurance cost will be included in your service charge bill.

Your property will be given an "insured value", which is the cost of rebuilding your home, and is therefore different from the actual value of your home if you sold it. Each year, we review the insured value to take into account changes in the costs of rebuilding a home.

Please note: the buildings insurance DOES NOT cover the contents of your home, and you will need to make your own arrangements for contents insurance.

To make a claim or if you have any queries regarding a claim, you can contact the claim handling company for help and information:

Claims Connexion UK Limited, 27 High Street, Cowbridge, Vale of Glamorgan, CF71 7AE
Tel: 01446 771722

Household building insurance for local authorities (Ocaso) (PDF) [98KB]
Leasehold insurance claim form (Ocaso) (PDF) [24KB]

Can I make improvements/repairs to my flat?

As a leaseholder you may want to improve your home. This could include:

• putting in central heating
• putting up a satellite dish
• building a conservatory or porch.

Before you do ANY alterations that may affect the structure of the building, the outside of the building or will affect communal services, you must obtain written permission from us.

You must also get building regulation and planning permission if it is necessary.

We will give you permission whenever we can. Sometimes we only give permission if you meet certain conditions. For example, if you want to put in new windows, we may say you have to follow a certain specification approved by us.

If you carry out any improvements without our permission, you will be in breach of the terms of your lease. We may then take legal action against you to make you remove the alterations.

Do not make any alterations to any attic or loft space. This part of the block of flats is not usually included within the terms of the lease.

You are responsible for carrying out repairs to any improvements you make to your home.

For information and permission for any home improvements, please put the request in writing to the Leasehold Officer.