Whenever the interest of land or property is up for exchange, there will be a contract drawn up between the parties involved. This is known as a lease. Usually given by the landlord to the tenant, the lease will state the time period in which the tenant can stay, the money that will be exchanged and how that money will be paid. It’s a crucial part of property letting, but why?
If you’re confused about what a lease is and how it works, by the end of this article you’ll be all clued up. And if you ever need more information, here at Horizon Management, we’ve got all the answers and we’re always just a quick phone call away.
Why are leases important?
Leases have been around for years they weren’t always as ironclad as they are now, mainly because it was common to cement this contractual agreement between landlord and tenant orally, with no written evidence for back up. Of course, when things went wrong, this caused huge disputes, leading to a legislation which made it mandatory for transactions involving the sale of land and property to be backed by a written agreement.
Nowadays, a lease provides clarity for everyone involved with a property let. It clearly states the rights and obligations that both the landlords and the tenants have, and helps to strike a balance of equality between both parties as everyone knows where they stand.
Different types of leases
Not all leases are created equal, and different properties and relationships will require different contractual agreements. Commercial leases will attempt to regulate the business relationship between the landlord and tenant, while residential leases relate more to flats and houses and take the tenants living needs and requirements into account.
With the introduction of schemes like shared ownership, the ways we purchase properties are continuing to grow and expand, meaning that the way we draw up leases has also begun to vary and change over the years.
More complex estates may even have various levels of ownership or a mixture of leasehold units, resulting in the need for more thorough leases that cover all areas and properties within properties.
Things to remember when dealing with residential leases
Stay in the know – Always seek out independent advice before entering into a lease. There is no such thing as a standard lease and most will have obligations and clauses that will need to be fully understood to avoid any problems.
At Horizon Management, our experience and expertise makes us well equipped to advise you fully on leases so you’re fully prepared before you take one out.
Get legal advice – A lease is a legal contract and if breached, can result in lawsuits and penalties. So it’s crucial to understand the legal requirements that come with your lease, and the obligations of both you and your tenants.
You can ask your lawyer anything regarding the property you’re purchasing and it’s important to do so. You’ll need to confirm things like benefits that come with the acquisition of the lease, such as the use of communal gardens and gyms, and who owns parking spaces.
Horizon Management can help!
Although it might sound complicated, leases are actually very simple in theory and can be looked at as the backbone or starting point to all tenancy agreements. However, if the idea of dealing with one on your own sounds daunting, don’t hesitate to reach out to us.
