What Is a Headlease?
A headlease is a lease of a whole building, granted by the freeholder to a company that then grants the individual flat leases beneath it. In those blocks the flat owner's landlord is that company, not the freeholder.
Last updated by the Plymouth Block Management team.
A Lease of the Building, with the Flats Underneath It
A headlease is a lease granted by the freeholder of the whole building, or a large part of it, to a head lessee. The head lessee then grants the long leases of the individual flats, which are technically underleases. The freeholder becomes the superior landlord, and the head lessee is the flat owners' immediate landlord.
The head lessee may be an investor, a developer's company, or a residents' management company set up so that the flat owners control the building without owning the freehold.
What It Changes for the Flat Owner
Two landlords means two sets of covenants to satisfy. A consent to alter a flat may be needed from the head lessee and, where the headlease requires it, from the freeholder as well. Insurance may be arranged at either level, depending on which lease puts the obligation where.
It also matters on a sale. The buyer's solicitor will want to see the headlease as well as the flat's own lease, because a breach of the headlease by the head lessee can put the whole structure at risk, and the management pack has to explain who is responsible for what. If the freeholder seeks to forfeit the headlease, a flat owner can apply to the court under section 146(4) of the Law of Property Act 1925 for relief, which can vest a lease of the flat directly in them.
Lease Extensions and Freehold Purchase
Where there is a headlease, the statutory lease extension process has to identify the landlord who can grant the new lease, known as the competent landlord, and the premium may be shared between the head lessee and the freeholder.
In a collective freehold purchase, the leaseholders can usually acquire the head lessee's interest as well as the freehold, so that the structure is simplified at the same time. Both routes need a solicitor and a valuer who have dealt with intermediate leases before.
If the Headlease Is Surrendered
A flat lease granted out of a headlease cannot run longer than the headlease itself, so a buyer's solicitor checks both terms. If the head lessee surrenders the headlease to the freeholder, the flat leases continue and the freeholder becomes the flat owners' direct landlord under section 139 of the Law of Property Act 1925.
Sources
Everything above is taken from these, not from a summary of them:
- Schedule 11, Leasehold Reform, Housing and Urban Development Act 1993 legislation.gov.uk
- Section 139, Law of Property Act 1925 legislation.gov.uk
- Law of Property Act 1925, section 146 legislation.gov.uk
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Headlease Questions
What Is a Headlease?
A headlease, also written head lease, is a lease of the whole building, or a large part of it, granted by the freeholder to a head lessee. The head lessee then grants the long leases of the individual flats as underleases, so the head lessee sits as an intermediate landlord between the freeholder and the flat owners.
Who Is My Landlord If There Is a Headlease?
The head lessee is your immediate landlord, and the freeholder is the superior landlord. Your demands should name the landlord, and the managing agent must tell you on request.
Does a Headlease Affect a Lease Extension?
It can. The extension has to be granted by the competent landlord, and the premium may be split between the head lessee and the freeholder, so the process takes more care.
Who Owns the Roof If There Is a Headlease?
Usually not the flat owner. The roof and main structure normally stay with the freeholder, or with the head lessee where the headlease covers the whole building, and the leases say who must repair them. Some top floor leases include the roof space, so check the lease plan and the definition of the flat before assuming.
Related Pages
How to Find Your Freeholder
Start with your latest service charge or ground rent demand, which by law must show the landlord's name and address.
Read moreLeasehold vs Freehold
Freehold means owning the building and the land. Leasehold means owning the right to live there for a fixed number of years.
Read moreManaging Agent for Residents’ Management Companies (RMCs)
A residents' management company (RMC) is a company owned by the leaseholders of a block or estate that is responsible for running its shared parts.
Read moreLicence to Alter and Leaseholder Consents
Leaseholder consents are the landlord's written permission for things the lease restricts, such as alterations, subletting or keeping a pet.
Read moreLease Extensions & Collective Enfranchisement
A lease extension adds years to a flat's lease, and collective enfranchisement lets qualifying leaseholders buy the freehold together.
Read moreTalk to Us About Your Building.