A maisonette lease is a lease of part of a building where the building is divided into two or more parts (but usually two) and each part is demised to the leaseholder (i.e. the leaseholder owns the whole of their part including the structural and external parts). In modern times leases are more commonly drafted so that the landlord retains the structure and just the internal parts are demised to the tenants.
How does this affect repair obligations?
In maisonette leases the leaseholder is often responsible for the maintenance and repair of their part which includes the structure. This can cause difficulties. Imagine an example where a converted house is effectively split in two: the leaseholder of an upper flat cannot ignore the structure of the lower parts, nor can it carry out repairs to their upper part without ensuring that the lower part is maintained and repaired when necessary. It would make little sense in the lower leaseholder having a contractor repair their part up to the horizontal boundary of the upper part and then having a separate contractor acting for the upper leaseholder continue where the other contractor has left off. The same is true of decoration. If the leaseholder of a lower part painted the exterior of the building up to the level of the upper part with the leaseholder of the upper part deciding to do their part at a later stage (or even in a different colour) then the exterior of the building would look very strange indeed! It is for this reason that it is more common that the landlord is responsible for the maintenance of the whole of the structure and decoration of the external parts. The landlord would then recover those costs from the leaseholder as service charge.
How does this affect insurance?
The position differs between leases. In maisonette leases usually each leaseholder insures their part (including structure). Sometimes the position is ignored and the leaseholder or landlord acquire a block policy and each contribute a proportion.
Further problems could arise when either leaseholder forgets to insure their part. For example, if the property burns down and the lower leaseholder has forgotten to insure or does not have inadequate insurance of their part then the upper leaseholder, even if adequately insured for their part, will suffer because there will be no lower part to build upon! It is for this reason that it is more common that the landlord is responsible for the insurance and reinstatement of the whole of the building and would recover proportions from the leaseholders.
Treatment of maisonette leases by lenders
The UK Finance Mortgage Lenders’ Handbook requires that “responsibility for the insurance, maintenance and repair of the common services is that of:
• the landlord; or
• one or more of the [leaseholders] in the building of which the property forms part; or
• [a] management company”
And where “the responsibility for the insurance, maintenance and repair of the common services is that of one or more of the tenants the lease must contain adequate provisions for the enforcement of these obligations by the landlord or management company at the request of the [leaseholders]”.
Separate insurance and repair obligations in maisonette leases can be made effective by including a clause wherein each individual leaseholder can compel the landlord to take action against the other leaseholders in the building but, generally speaking, whilst not defective, such leases are considered to be unwieldy.
Resolutions to defective leases
Defective title insurance policy can be obtained and whilst these do not solve the practical problem they can compensate a leaseholder and their lender against the financial risk that a maisonette or flat might fall in to disrepair or suffer uninsured damage or destruction.
The above is true as at September 2021
If you have any questions regarding maisonette lease, please contact Meaby & Co at firstname.lastname@example.org or on 020 7703 5034.
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