During the mid 1980’s the way in which flats in England and Wales were being built and sold began to change. Why? Because developers began to realise that legislation being proposed and enacted by the government of the time was granting leaseholders more and more rights/powers in respect of consultation requirements, management audits and flat management generally. Developers know the balance of power was beginning to shift and consequently being a freeholder was no longer an attractive prospect.
What is a “TRIPARTITE LEASE”?
A tripartite or tri-party lease is, quite simply, a lease made between three parties: (i) the landlord (ii) the leaseholder and (iii) a management company.
Under tripartite leases, historically, management companies are companies limited by shares with its main objective is to manage and maintain the common parts (entrances, lifts, car- parks, gardens as well as the main structure of the building itself) for the general benefit of the leaseholders. The full responsibilities of any management company will be set out in its Memorandum and Articles of Association, as well as being contained within the tripartite leases themselves. Tripartite leases are now commonly used by developers in new-build blocks. It is also now more usual for leaseholders, by virtue of being a lessee in the block, to have a share or membership in the management company – more commonly known as “resident management companies” or “RMC’s”. By creating RMC’s, in theory, leaseholders were effectively. “put in charge of their estate”. But did this happen in practice?
To read the article in full, please click on the link below:
http://www.newsontheblock.com/news-and-opinion/20207/what-are-tripartite-leases.thtml
