TPI Level 4 Member Exam in Leasehold Management cheat sheet

Leases over three years must be granted by deed (Law of Property Act 1925 s.52); leases over seven years must also be registered at HM Land Registry.

The lease defines the demise, term, rent, service charge proportion, repairing and insuring covenants, alienation provisos, forfeiture clause and notice provisions.

Section 146 LPA 1925: before forfeiting for breach of any covenant other than rent, the landlord must serve a notice specifying the breach, requiring remedy and compensation, and allowing at least 14 days.

Section 168 CLRA 2002: forfeiture for breach of covenant (including service charge arrears) requires the tenant's admission or a determination of breach by a court or the First-tier Tribunal.

Section 167 CLRA 2002: forfeiture for unpaid service charges is barred unless the sum due exceeds £350 or has been unpaid for at least three years; s.81 Housing Act 1996 applies the equivalent test to rent.

Section 19 LTA 1985: relevant costs count towards a service charge only to the extent reasonably incurred, and the works or services must be of a reasonable standard.

Section 27A LTA 1985: the First-tier Tribunal determines whether a service charge is payable, by whom, to whom, when and in what amount; s.20C allows it to cap the landlord's costs of those proceedings.

Sections 47 and 48 LTA 1987: demands must state the landlord's name and an address in England and Wales for service of notices; non-compliance restricts recovery of the sums demanded.

Section 20B LTA 1985: costs incurred more than 18 months before a demand are irrecoverable unless the tenant was notified in writing within those 18 months that the costs had been incurred and would be charged.

Section 18 LTA 1985: a service charge is an amount payable for services, repairs, maintenance, improvements, insurance or management, which varies according to the costs incurred.

Section 19(1) LTA 1985: costs are recoverable only to the extent reasonably incurred; for works, only if carried out to a reasonable standard or a reasonable adjustment is made.

Apportionment is fixed by the lease; where the lease is unclear or the proportion is disputed, the First-tier Tribunal determines the proper amount under s.27A.

Section 21 LTA 1985: a tenant may request a written summary of relevant costs for the last accounting period, which must be supplied within one month.

Section 22 LTA 1985: once a summary has been given, the tenant may inspect the supporting accounts, invoices and receipts; facilities must be provided within one month of the request.

A demand must be accompanied by the prescribed summary of tenants' rights and obligations (s.21A LTA 1985 and the 2007 Regulations); a tenant may withhold payment where it is not.

Administration charges (Schedule 11 CLRA 2002) are payable only if authorised, reasonable in amount and demanded with a summary of rights; the FTT decides disputes.

Interest on arrears is recoverable only where the lease provides for it; late payment fees are administration charges subject to the reasonableness test.

Section 20 LTA 1985: qualifying works over £250 per tenant, and service contracts over £100 per tenant per year lasting more than 12 months, require formal consultation.

The service charge budget forecasts expenditure for the accounting year and sets the interim charge; the lease dictates the year end, payment frequency and reserve fund contributions.

Reserve (sinking) funds accumulate for cyclical major works; their income and expenditure should be tracked and reported separately from day-to-day revenue items.

At year end, actual expenditure is compared with budget; the difference is a balancing charge or credit applied, and reported, as the lease requires.

Section 42 LTA 1987: service charge contributions must be held in a designated trust account; for a corporate landlord the trustees must include at least one person who is not a member or director.

Client money must be held in a separate designated bank account, reconciled monthly, kept free of office funds, with any interest credited to the client account.

Agents holding client money must be covered by a government-approved Client Money Protection scheme and hold adequate professional indemnity insurance.

VAT: service charges are consideration for a supply, so a VAT-registered landlord or agent charges 20% VAT; insurance premiums carry Insurance Premium Tax at 12% instead.

Year-end accounts should show expenditure by heading against budget, reserve fund movements, the arrears position and the balance held on trust.

Arrears management: statements, reminder letters, agreed payment plans, then a money claim; forfeiture only once the ss.167 and 168 CLRA 2002 conditions are satisfied.

Qualifying works costing more than £250 per tenant trigger the s.20 LTA 1985 two-stage consultation set out in the Service Charges (Consultation Requirements) (England) Regulations 2003.

Stage one: a notice of intention describing the works, inviting written observations within 30 days, and inviting contractor nominations from a recognised tenants' association or tenants.

Stage two: a notice of estimates stating each estimate and the tenant's contribution; at least two estimates are required, and one must be sought from a nominated contractor where a nomination was made.

Tenants have 30 days from the notice of estimates to make written observations; the landlord must consider them, and the notice must disclose any connection between the landlord and a proposed contractor.

Long-term agreements: services over 12 months at more than £100 per tenant per year; consultation must be repeated at five-yearly intervals.

Non-compliance limits recovery to £250 per tenant unless the FTT grants dispensation under s.20ZA, which may be granted retrospectively.

A material change of scope, or a significant increase in cost after consultation, requires re-consultation to avoid a reasonableness challenge.

The repairing obligation is whatever the lease says: the s.11 LTA 1985 implied repair covenant applies only to leases of seven years or less, not to long leases.

Delivery controls: condition surveys and planned maintenance, competitive tendering, CDM 2015 client duties, Building Regulations approval and Party Wall etc. Act 1996 awards where adjoining owners are affected.

Regulatory Reform (Fire Safety) Order 2005: the responsible person for common parts must carry out and record a fire risk assessment, reduce risks and maintain means of escape, signage and fire equipment.

Fire Safety (England) Regulations 2022: buildings 11m or five storeys and above require quarterly checks of common parts fire doors, annual checks of flat entrance doors and information to residents.

Buildings 18m or seven storeys and above also need a secure information box, wayfinding signage, monthly checks of lifts and firefighting equipment, and external wall information sent to the fire and rescue service.

Building Safety Act 2022: higher-risk buildings (18m or seven storeys, at least two residential units) must be registered with the Building Safety Regulator before occupation, with a safety case, key building information and mandatory occurrence reporting.

Control of Asbestos Regulations 2012 regulation 4: duty to manage asbestos in non-domestic premises including residential common parts - survey, register, management plan and contractor warnings.

Legionella: risk assessment to L8/HSG274, monthly monitoring of sentinel outlets, cold water below 20°C, hot water stored above 60°C and delivered above 50°C.

LOLER 1998: passenger lifts require a thorough examination by a competent person every six months; other lifting equipment every 12 months, with records retained.

Gas Safety (Installation and Use) Regulations 1998: annual safety checks on landlord-owned gas appliances and flues, with records issued to tenants and kept.

RIDDOR 2013 requires reporting of specified injuries and dangerous occurrences; an accident book and incident log should be maintained for the common parts and staff.

The lease normally obliges the landlord to insure the building against specified risks and the leaseholder to pay an insurance rent through the service charge.

The sum insured is the reinstatement cost, not market value; it should be set by a professional rebuilding cost assessment, index-linked, and reviewed at least every three years or after material alterations.

Insurance Act 2015: the insured owes a duty of fair presentation of the risk; remedies for breach range from a proportionate reduction of a claim to avoidance of the policy.

Section 30 LTA 1985: a tenant may request a written summary of the insurance cover, supplied within 21 days; s.30A gives recognised tenants' associations rights to information and consultation on the insurer.

Insurance contributions may be challenged before the First-tier Tribunal as unreasonable, but where the lease names the insurer the tribunal's scope to substitute an alternative is limited.

Arranging insurance is a regulated activity; an agent acting purely as agent of the landlord with no separate remuneration may fall outside FCA authorisation, otherwise permission is required.

Typical cover: property damage (fire, flood, escape of water, subsidence), public liability, employers' liability, terrorism (Pool Re), directors' and officers' liability for RMC/RTM companies, legal expenses.

Insurance Premium Tax at 12% applies to most property insurance premiums and is recoverable through the service charge alongside the premium.

Where the lease requires insurance, landlord and leaseholder normally waive subrogation rights against each other, so damage is met by the policy rather than by negligence claims.

Leasehold Reform, Housing and Urban Development Act 1993: collective enfranchisement requires qualifying leaseholders holding at least two-thirds of the flats, leases originally of 21 years or more, and (until reforms are commenced) two years' ownership.

Individual lease extension: a new lease of the existing term plus 90 years at a peppercorn rent, with the freeholder receiving a premium for the diminution in its interest plus reasonable costs.

Marriage value arises where the unexpired term is under 80 years and is shared 50/50 between landlord and leaseholder as part of the premium.

Commonhold and Leasehold Reform Act 2002 right to manage: no premium and no proof of fault; the building must be self-contained with at least two flats, two-thirds held by qualifying tenants and no more than 25% non-residential floor area.

Landlord and Tenant Act 1987 Part I: before selling an interest in a building containing at least two flats, the landlord must offer it first to the qualifying tenants.

Section 24 LTA 1985: the FTT may appoint a manager where there has been a breach of obligation, unreasonable service charges or mismanagement; s.24A allows an interim manager.

Section 35 LTA 1987: the FTT may vary a lease that fails to make satisfactory provision, for example on repair, insurance, management or service charge apportionment.

Leasehold Reform (Ground Rent) Act 2022: leases of a single dwelling granted on or after 30 June 2022 must have a peppercorn ground rent, enforced by trading standards with penalties up to £5,000.

Leasehold and Freehold Reform Act 2024 (phased commencement): provides 990-year extensions, abolition of marriage value, removal of the two-year ownership rule and a 50% non-residential threshold; most provisions are not yet in force.

Core record set: lease and title documents, site plans, key register, health and safety file, insurance certificates, maintenance and contract records, service charge accounts, minutes and correspondence.

Financial records should be kept for at least six years; building safety and asbestos records should be retained for the life of the building and passed to successor managers.

UK GDPR and the Data Protection Act 2018 require a lawful basis, a privacy notice, responses to subject access requests within one month (extendable by two) and breach reporting to the ICO within 72 hours where there is risk.

The LPE1 form is the Law Society's standard leasehold enquiries form used on sale; answers on arrears, disputes, planned works and insurance must be accurate, with fees set by the terms of engagement.

RMC/RTM company administration: annual confirmation statement, accounts filed at Companies House within nine months of the accounting reference date, statutory registers and 14 clear days' notice for general meetings.

Notices to be served and logged: s.20 consultation notices, s.21 summaries, s.21A summaries accompanying demands, s.47/48 landlord details, arrears reminders and forfeiture notices, with proof of service.

Consents and licences (alterations, subletting, pets, assignments) must be dealt with against the lease terms and within a reasonable time; the fees are administration charges subject to reasonableness.

On a change of managing agent, handover should cover funds, ledgers, contracts (novation or termination), keys, health and safety file, insurance details, TUPE for staff and meter readings.

Acknowledge complaints promptly, investigate within published timescales and keep a written record; after eight weeks, or on deadlock, the customer may escalate to the approved redress scheme.

Equality Act 2010: services must not discriminate, and reasonable adjustments to policies, communications and access must be made for disabled residents.

Communicate in plain English, explain charges through the budget and year-end accounts, and publish clear timescales, contact routes and escalation options.

Major works consultation is a communication exercise: explain scope, cost and timing, respond to observations in writing and record the decisions taken.

Handle vulnerability and safeguarding using Mental Capacity Act 2005 principles, adapt arrears and access practices, and signpost support services.

Neighbour disputes: rely on the lease covenants in the first instance; statutory nuisance and antisocial behaviour are matters for the local authority or the police.

Key stakeholders: leaseholders, freeholder, RMC/RTM directors, contractors, insurers, lenders, fire and rescue service, local authority and the First-tier Tribunal.

Consumer protection: fee quotes and terms of engagement must be clear and not misleading, and commissions or referral payments must be disclosed.

Core duties: honesty, integrity, competence, confidentiality, transparency and compliance with the law and with the agent's published terms of engagement.

Conflicts of interest must be identified, disclosed in writing and avoided or managed; a contractor connected to the landlord or a director must be disclosed in s.20 consultation.

Commissions and referral fees must be disclosed to the client and consent obtained before they are accepted.

Client money rules: separate designated account, monthly reconciliation, no use of client funds for office purposes, CMP cover and a full audit trail.

Professional indemnity insurance and competence: work only within expertise, maintain CPD, and take specialist advice on valuation, legal and building safety matters.

Bribery Act 2010: offences of offering, receiving and failing to prevent bribery; firms need adequate procedures and must not make facilitation payments.

Redress: property management agents in England must belong to a government-approved redress scheme, display membership and record complaints and outcomes.

Confidentiality and data protection: personal data shared only with consent, legal obligation or a justified legitimate interest, with breach reporting within 72 hours where required.