Leasehold Glossary
Plain-English definitions of UK leasehold law and block management terms - from service charges and Section 20 to RTM companies and the Building Safety Act.
A
Accountable person
Under the Building Safety Act 2022, a person or organisation responsible for managing the safety of a higher-risk building (at least 18 metres or 7 storeys, with at least 2 residential units). The principal accountable person must register the building with the Building Safety Regulator and produce a safety case report.
B
Block management
The day-to-day management of a residential building's common areas and shared services. Includes arranging maintenance and repairs, collecting and accounting for service charges, managing building insurance, and overseeing contractors. May be carried out by a professional managing agent or by the leaseholders themselves through an RTM company or RMC.
Building Safety Act 2022
UK legislation that introduced a new safety regime for higher-risk buildings, including an accountable person regime, duty holder requirements, and leaseholder cost protections. Leaseholder cost protections cap the amounts that can be charged to leaseholders for certain historical fire safety remediation works.
C
Collective enfranchisement
The statutory right of qualifying leaseholders to collectively buy the freehold of their building, established by the Leasehold Reform, Housing and Urban Development Act 1993. Requires participation by qualifying tenants of at least half of all the flats in the building. Gives leaseholders full control over the building, including the ability to extend leases at nil ground rent and choose their own managing agent.
Commonhold
An alternative to leasehold ownership where each flat owner holds their unit as freehold and participates in a commonhold association that collectively owns the common areas. Introduced by the Commonhold and Leasehold Reform Act 2002 but rarely used in practice. Government has signalled intent to promote commonhold as a replacement for leasehold.
F
First-tier Tribunal (Property Chamber)
The specialist tribunal that hears residential property disputes in England, including service charge reasonableness applications, Right to Manage claims, appointment-of-manager applications, and RTA recognition. Often described as an accessible, lower-cost alternative to court - legal representation is not required, though advisable for complex cases.
Forfeiture
The freeholder's right to terminate a lease for breach of covenant, including non-payment of service charges or ground rent. Heavily restricted by statute: for service charge or administration charge arrears, section 81 of the Housing Act 1996 requires a tribunal or court determination that the amount is due (or the tenant's admission) before forfeiture can proceed, and section 167 of the Commonhold and Leasehold Reform Act 2002 prevents forfeiture for arrears of rent, service charges or administration charges (alone or combined) unless the total exceeds £350 or includes an amount outstanding for more than three years (thresholds for England set by SI 2004/3086). Leaseholders facing forfeiture proceedings should seek legal advice immediately.
Freeholder
The owner of the land and building. In a leasehold building, the freeholder grants long leases to flat owners and retains the freehold title. The freeholder (or their appointed managing agent) is typically responsible for maintaining the building and collecting service charges. Also called the landlord.
Freehold
Absolute ownership of land and buildings with no end date. In the context of leasehold flats, the freehold is the superior interest from which individual leases are granted. Leaseholders can acquire the freehold collectively through collective enfranchisement.
G
Ground rent
An annual payment from a leaseholder to the freeholder, in addition to service charges. The Leasehold Reform (Ground Rent) Act 2022 banned ground rents above a peppercorn for new qualifying residential leases in England and Wales granted on or after 30 June 2022 (from 1 April 2023 for retirement housing). Escalating ground rents in older leases remain a significant issue for many leaseholders.
H
Head lease
A lease granted by the freeholder to an intermediate landlord - typically an RMC - who then grants sub-leases to individual flat owners. The RMC holds the head lease and is responsible for managing the building and collecting service charges from sub-leaseholders.
Higher-risk building
Under the Building Safety Act 2022, a building that is at least 18 metres in height or has at least 7 storeys, and contains at least 2 residential units. Higher-risk buildings are subject to enhanced safety requirements including mandatory registration, regular safety assessments, and the accountable person regime.
L
Landlord and Tenant Act 1985
The primary legislation governing residential service charges in England and Wales. Key provisions include: Section 19 (charges must be reasonable and incurred reasonably), Section 20 (consultation required for major works), Section 21 (leaseholders' right to a written summary of service charge costs), Section 22 (right to inspect the accounts and receipts behind that summary), and Sections 29-30 (Recognised Tenants' Associations).
Lease extension
The statutory right of qualifying leaseholders to extend their lease by 90 years at a peppercorn ground rent, available under the Leasehold Reform, Housing and Urban Development Act 1993. Since 31 January 2025 there is no minimum ownership period (Leasehold and Freehold Reform Act 2024). Further reforms (990-year extensions, valuation changes) are not yet in force.
Leasehold
A form of property ownership in which a person holds a property for a fixed term (typically 99-999 years) under a lease from the freeholder. Leaseholders pay ground rent and service charges to the freeholder. At the end of the lease term, ownership reverts to the freeholder unless extended. The majority of flats in England and Wales are sold leasehold.
Leaseholder cost protections
Protections introduced by the Building Safety Act 2022 that cap or eliminate service charge costs that can be recovered from leaseholders for historical building safety defects (primarily cladding and fire safety remediation). A qualifying leaseholder is broadly one whose lease was granted before 14 February 2022 and whose flat is their principal home or one of no more than three UK properties they own (s119). Qualifying leaseholders benefit from capped contributions, and those in a separate low-value tier - leases worth under £175,000 outside London, or £325,000 in London - pay nothing towards those works.
M
Managing agent
A professional property management company appointed by the freeholder, RMC, or RTM company to handle day-to-day building management. Duties typically include maintaining common areas, arranging insurance, collecting service charges, managing contractors, and preparing annual accounts. Managing agents in England are required to belong to a government-approved Redress Scheme.
R
Residents' Management Company (RMC)
A company - usually owned by or controlled by the leaseholders - that holds the freehold or a head lease and is responsible for managing the building. RMC directors are typically leaseholders who volunteer their time to run the company. The RMC may self-manage or appoint a professional managing agent.
Marklet for RMC directorsRICS Service Charge Residential Management Code
Best practice guidance published by the Royal Institution of Chartered Surveyors (RICS) for residential service charge management. The 4th edition, effective from 7 April 2026, strengthens requirements for transparency, budgeting, and Building Safety Act compliance. RICS members managing residential service charge buildings are required to follow it.
Recognised Tenants' Association (RTA)
A formally recognised residents' group under Section 29 of the Landlord and Tenant Act 1985. To be recognised, an RTA must be recognised by the landlord in writing or by a tribunal. A recognised RTA has the right to be consulted on the appointment of a managing agent, and to receive service charge estimates and accounts. RTAs are distinct from RMCs - they do not manage the building, but have formal consultation rights.
Marklet for residents' associationsRight To Manage (RTM)
A statutory right allowing qualifying leaseholders to take over the management of their residential building from the freeholder, without having to prove fault and without buying the freehold. The right is established under the Commonhold and Leasehold Reform Act 2002 (Part 2). Exercised by forming an RTM company.
Marklet for RTM companiesRTM company
The company formed by qualifying leaseholders to exercise the Right To Manage. Must be a private company limited by guarantee, incorporated specifically for the purpose, and its membership must include qualifying tenants of at least half of all the flats in the building. Once the RTM company acquires the right, it takes over management functions from the freeholder or their managing agent.
Marklet for RTM companiesS
Service charge demand
A formal written demand requiring a leaseholder to pay service charges. Under the Landlord and Tenant Act 1985, a demand must be accompanied by a prescribed Summary of Rights and Obligations. Without this summary, the leaseholder may lawfully withhold payment until a compliant demand is served (s21B LTA 1985).
Section 20 consultation
A statutory consultation process under Section 20 of the Landlord and Tenant Act 1985 required before a landlord or managing agent can spend more than £250 per leaseholder on a single qualifying works contract, or enter into a qualifying long-term agreement costing more than £100 per leaseholder per year. Failure to consult limits the landlord's recovery to £250 per leaseholder for works, regardless of actual cost.
Service charge
An annual charge levied by the freeholder or their managing agent on leaseholders to cover the cost of maintaining and managing the building's common parts and shared services. Typically covers building insurance, cleaning, maintenance, repairs, gardening, and the managing agent's fee. Under the Landlord and Tenant Act 1985, service charges must be reasonable and leaseholders have the right to inspect accounts and receipts.
Summary of Rights and Obligations
A prescribed notice that must accompany every service charge demand under the Landlord and Tenant Act 1985. Sets out the leaseholder's legal rights in relation to service charges, including the right to challenge reasonableness, inspect accounts, and apply to a tribunal. Without this summary, the leaseholder may lawfully withhold payment until a compliant demand is served (s21B LTA 1985).
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