Glossary

Leasehold and block management, word by word

Leasehold and block management terms explained in one sentence each, from acquisition date to Section 20.

A

Accrued uncommitted service charges (also uncommitted service charges, section 94 funds, handover funds): The service-charge money held by the outgoing landlord or managing agent on the RTM acquisition date, less what is needed for costs already incurred, which must be paid over to the RTM company.
Acquisition date (also RTM acquisition date, takeover date): The date on which an RTM company takes over the management of the building from the landlord.
Address for service (section 48) (also section 48 notice, s.48 address, notice under section 48): An address in England and Wales that a landlord must give leaseholders for serving notices, without which rent and service charges are treated as not due.
Administration charge (also admin charge, variable administration charge): A charge a leaseholder pays under the lease for something specific to them, such as a consent, providing information or documents, paying late or breaching the lease, rather than for running the building.
AGM (annual general meeting) (also annual general meeting, general meeting, members' meeting, EGM): A yearly meeting of a company's members to receive reports, ask questions and make decisions such as appointing directors, which private companies only have to hold if their articles require it.
Apportionment (also service charge apportionment, service charge percentage, share of service charge): How the total cost of running the building is divided between the flats, using the shares or method set out in each lease.
Assignment (also assignment of lease, notice of assignment, transfer): The legal transfer of a lease from one person to another, which is what happens when a leasehold flat is sold.

C

Claim notice (also notice of claim, RTM claim notice, section 79 notice): The prescribed notice in which an RTM company tells the landlord (and anyone else with management duties under the leases) that it claims the right to manage, and names the date it intends to take over.
Collective enfranchisement (also buying the freehold, freehold purchase, enfranchisement): The legal right of qualifying leaseholders of flats in England and Wales to join together and buy the freehold of their building, even if the freeholder doesn't want to sell.
Common parts (also retained parts, communal areas, shared areas): The parts of a building that aren't let to any one leaseholder and are shared, such as the entrance hall, stairs, corridors, roof space, bin store and grounds.
Confirmation statement (also CS01, annual return, Companies House confirmation statement): The statement every company must file at Companies House at least once a year, confirming that the information held about it (such as its registered office, directors and people with significant control) is up to date.
Counter-notice (also RTM counter-notice, section 84 counter-notice): The landlord's formal reply to a right to manage claim notice, either admitting that the RTM company is entitled to manage or saying why it is not.

D

Deed of covenant (also deed of adherence, covenant deed): A deed signed by someone buying a flat, promising the landlord or management company that they will keep the promises in the lease.
Deemed service (also deemed delivery, deemed receipt, service of notices): A legal rule that treats a notice as received at a particular time, such as a set number of days after posting, whether or not the recipient actually read it then.
Demised premises (also the demise, the flat, the property): The property a lease actually grants to the leaseholder: their flat, as the lease and its plan define it.
Dispensation (also Section 20ZA dispensation, dispensation from consultation): An order by the First-tier Tribunal excusing a landlord or management company from some or all of the Section 20 consultation requirements, where it is reasonable to do so.

E

EICR (Electrical Installation Condition Report) (also electrical installation condition report, periodic inspection report, electrical safety certificate): A report from a qualified electrician on the condition and safety of a building's fixed electrical installation, such as the wiring, sockets and consumer units.

F

Fire risk assessment (also FRA, fire safety risk assessment): A written assessment, which the law requires for the common parts of a block of flats, of the risk of fire and what is needed to keep people safe, kept under regular review.
First-tier Tribunal (Property Chamber) (also FTT, property tribunal, leasehold tribunal, Residential Property Tribunal): The tribunal in England that decides most leasehold disputes, including right to manage claims, whether service charges are payable or reasonable, and applications for dispensation from Section 20 consultation.
Freehold company (also freehold management company, nominee purchaser company, share of freehold company): A company owned by the leaseholders of a building that owns the building's freehold, and so is the landlord under the flat leases.
Freeholder (also landlord, lessor, reversioner, freehold owner): The owner of the freehold of the building, who is usually the landlord under the flat leases.

G

Ground rent (also rent, peppercorn rent): The rent a leaseholder pays the landlord under the lease, separate from the service charge, which is only payable once the landlord has sent a notice in the prescribed form.

H

HMO licence (also HMO, house in multiple occupation licence, section 257 HMO, additional licensing): A licence from the local council that some houses in multiple occupation must hold, which can include converted blocks of flats that don't meet the 1991 Building Regulations and where fewer than two-thirds of the flats are owner-occupied.

I

Insurance rent (also insurance contribution, insurance premium recharge): A leaseholder's contribution to the buildings insurance premium that some leases collect as a form of rent, separately from the rest of the service charge.

L

Landlord's name and address (section 47) (also section 47, s.47 information, landlord's details on demands): The rule that every written demand for rent, service charges or administration charges must state the landlord's name and address, or the service and administration charges in it are treated as not due.
LEASE (The Leasehold Advisory Service) (also LEASE, Leasehold Advisory Service, lease-advice.org): A government-funded body that gives free initial advice on residential leasehold law to leaseholders, landlords, RTM companies, residents' management companies and others.
Leasehold and Freehold Reform Act 2024 (also LFRA 2024, LAFRA, the 2024 Act, leasehold reform act): The Act of Parliament that reforms leasehold in England and Wales, some of which is already in force (including changes to the right to manage) and much of which, including new service-charge transparency rules, is still to come.
Leaseholder (also lessee, tenant (in the lease), flat owner): Someone who owns a flat on a long lease, which gives them the right to live in or let it for a fixed number of years, in return for paying ground rent and service charges and keeping the lease's promises.

M

Managing agent (also property manager, block manager, managing agents): A business paid to manage a block of flats on behalf of whoever is responsible for it, such as the freeholder, an RTM company or a residents' management company.

N

Notice of invitation to participate (also notice inviting participation, NIP, section 78 notice): The prescribed notice an RTM company must give to every qualifying tenant who isn't already a member, inviting them to join, at least 14 days before it serves the claim notice.

Q

Qualifying long-term agreement (also QLTA, long-term agreement): A contract made by or for the landlord (or the company managing the block) for a term of more than 12 months, which needs Section 20 consultation if any leaseholder would pay more than the set amount a year towards it.
Qualifying tenant (also qualifying leaseholder): For the right to manage, the leaseholder of a flat under a long lease, which normally means a lease granted for more than 21 years.

R

Reserve fund (also sinking fund, reserve, contingency fund): Money collected from leaseholders in advance, where the lease allows it, to spread the cost of large future expenses such as roof replacement or redecoration.
Residents' management company (RMC) (also RMC, resident management company, flat management company, management company): A company, usually owned by the leaseholders, that is named in the leases as responsible for managing and maintaining the building, whether or not it also owns the freehold.
Responsible person (fire safety) (also RP, responsible person under the Fire Safety Order): The person or organisation in control of a building's common parts in connection with a business or undertaking, who is legally responsible for fire safety there under the Fire Safety Order.
RICS Service Charge Residential Management Code (also RICS Code, the Code, RICS Service Charge Code, Service charge residential management code): The code of practice for managing residential blocks in England, approved by the government, which applies to landlords and anyone managing on their behalf, including self-managed RTM companies and residents' management companies.
Right to manage (RTM) (also RTM, the right to manage): The legal right of qualifying leaseholders of flats in England and Wales to take over the management of their building from the landlord, through a company they control, without having to prove the landlord was at fault or buy the freehold.
RTM company (also right to manage company, RTM Co): A private company limited by guarantee, set up by leaseholders, whose object is to acquire and exercise the right to manage their building.

S

Section 20 consultation (also Section 20, s.20 consultation, major works consultation, section 20 notice): The legal process of consulting leaseholders before carrying out works, or signing a contract of more than 12 months, that will cost any one leaseholder more than the set threshold.
Service charge (also variable service charge, maintenance charge): The amount leaseholders pay, under their leases, towards the cost of services, repairs, maintenance, improvements, insurance and management of their building, which goes up or down with the actual costs.
Service-charge demand (also service charge bill, demand for payment, service charge invoice): A written request to a leaseholder to pay a service charge, which in England must include the landlord's name and address and be accompanied by the prescribed summary of rights and obligations.
Share of freehold (also share of the freehold, SOF): An arrangement in which the leaseholders of a building together own its freehold, usually through a company in which each flat owner is a member or shareholder, while each still holds a lease of their own flat.
Summary of rights and obligations (also summary of tenants' rights and obligations, section 21B notice, rights and obligations summary): The prescribed statement of leaseholders' rights that must accompany every service-charge demand (and a separate one for administration-charge demands), without which the leaseholder may withhold payment.

T

The 18-month rule (Section 20B) (also Section 20B, s.20B, 18 month rule service charge, section 20B notice): The rule that a leaseholder doesn't have to pay service-charge costs that were incurred more than 18 months before they were demanded, unless they were warned in writing within that time that the costs had been incurred and would be charged.
Trust money (section 42) (also service charge trust, section 42 trust, statutory trust, client money): Service-charge money paid by leaseholders, which the law says is held on trust to pay the costs it was collected for and, subject to that, for the leaseholders who paid it, not as the receiving company's own money.

W

Written resolution (also members' written resolution, ordinary resolution, special resolution): A decision of a private company's members made in writing instead of at a meeting, which passes once enough of the eligible members' votes have agreed to it.