Explanation of a typical lease – Hythe Marina Association

This is an attempt to describe a typical underlease used for the majority of residential properties in Hythe Marina Village in “plain English”. The lease is a long and complex document however, so hopefully this is more readable and understandable, but it is still quite long!

It is important to understand that the lease is a legal contract between you as the leaseholder and HMVL as the Landlord. The contract places obligations on both parties which must be complied with. This is very different to a freehold property. If the parties don’t comply with the obligations in the lease then they would be in breach of contract – the lease sets out what happens in those circumstances as well.

Leases for flats, apartments will vary slightly, and clauses relating to individual pontoons, attached to properties or remote also vary for some properties.

Your actual lease is obviously the governing document. Nothing here is legal advice.

A common key question is who is responsible for what!

If a question ever arises about who is responsible for what, or who pays for what, six clauses in the the lease do most of the work.

1.3 and 1.13 together draw the boundary between an individual property and the estate. 1.3 pulls additions and improvements into the demised premises; 1.13 pushes shared infrastructure into the Village but carves out access ways exclusively serving a single lettable unit.
8.1 obliges the landlord to repair, renew and rebuild the Village but excluding the lettable units.
8.12 lets the landlord do anything it considers necessary or advisable for the safety and amenity of the Village in its absolute discretion, and 9.4.1 makes clause 8 expenditure recoverable through the service charge. Together these are the route by which discretionary works become chargeable.
6.4.1 and 6.4.2 prohibit the leaseholder from making additions to the property or altering its exterior or external appearance.
6.5.1 places repair of the property itself on the leaseholder, and 6.13.2 lets the landlord serve notice, do the work on default, and recharge with interest.
6.15 requires compliance with all statutes and the requirements of any competent authority relating to the property, which is often where safety-related arguments are anchored.

Two things this lease does not contain, because it predates them: any procedure for consulting leaseholders before major works, and any cap on what may be recovered (The Section 20 notices and prcedures). Those come from statute rather than from the lease, and they operate on top of it rather than being displaced by it.

Key elements of the lease.

Type	Underlease, that is a lease granted out of a longer head lease rather than out of the freehold
Landlord	Hythe Marina Village Limited, called “the Reversioner” throughout
Leaseholder	Called “the Owner” throughout
Demised property	The dwellinghouse, premises and garage of a numbered plot, edged red on Plan 2 of that lease
Also included	One mooring berth (pink on Plan 2) and one car parking space (green on Plan 2)
Term	999 years less 10 days calculated from 25 March 1984, so expiring 15 March 2983
Ground rent	A peppercorn, so effectively nothing
What is actually paid	Estate rentcharges: £1 a year plus the service charge
Landlord’s own title	HP273036, held under a Head Lease from New Forest District Council dated 26 September 1984

Within the lease document there appears to be an almost complete repetition, it is important to understand this duplication.

The first part is the lease proper: clauses 1 to 11, plus a First, Second and Third Schedule. This is the contract between the landlord and you as the individual leaseholder.

The Fourth Schedule is something different. It is a copy of a completely separate deed, the Management Agreement, made between Hythe Marina Limited (the company holding the commercial side of the estate, called “the Company”) and Hythe Marina Village Limited (the company holding the residential side, called “HMV” – our landlord). It governs how the whole estate is run and how the total estate cost is divided between the two halves before any of it reaches an individual home. The original split of costs was 17/37ths commercial, 20/37ths residential but this was revised to the current ~65%/35% split in around 2015.

So the sequence is: the estate spends money, the Management Agreement divides that spend 65% to 35%, and the lease then divides the residential 65% between the individual homes. Clauses 8 and 9 of the lease are near word for word copies of clauses 3 and 4 of the Management Agreement, because the residential company is promising each leaseholder the same things it has already promised the commercial company. That is the source of nearly all the repetition.

Clause 1: Definitions

Twenty-five definitions. Most are routine machinery, but several are important later in the document and are worth reading properly.

1.3, “the demised premises.” This is what the leaseholder holds. It expressly includes the roof, the main and other walls enclosing the premises, the foundations, the piling if any, the ground floor screed, and any additions and improvements. It expressly excludes the face of the Marina wall, which stays with the landlord. Note the phrase “where the context so admits”, which means this extended definition applies in covenants and provisos rather than defining the registered extent of the title.

1.5, “the Village.” Hythe Marina Village, the extent shown edged red on Plan 1, subject to such variations or extensions as shall from time to time be notified by the Reversioner. In other words the landlord can extend or vary what counts as the Village by notice, and clause 7.3 obliges it to tell leaseholders when it does so substantially.

1.13, the extended meaning of “the Village.” In any covenant or proviso, the Village includes gas and electrical installations, plant, machinery, firefighting equipment, walls and structures, fences, drains, cables, conduits, roads, walkways, footpaths and access ways other than those exclusively serving a lettable unit. That final exclusion is the dividing line between shared estate infrastructure and something that belongs to one home alone.

1.6, “lettable units.” The individual residential or commercial premises intended for separate letting. Mooring berths and car parking spaces are deliberately excluded from this definition, which matters because clause 8.1 excludes lettable units from the landlord’s repairing obligation, and berths therefore fall inside it.

1.7, “the Marina.” The water areas, moorings, berths, pontoons, docks, promenades, landscaped areas, bunds, harbour walls, access roads and the lock control building, coloured blue on Plan 1.

1.15 and 1.16, the Surveyor and the Accountant. Both are defined so as to permit an employee of the landlord or of a group company to fill the role. The Surveyor’s decisions are made final on matters of fact in a couple of places (6.13.2, 10.6.2), and the Accountant certifies the service charge accounts under 9.5.2. It is worth being conscious that neither is required by the lease to be independent.

1.17, “the Residents Association.” Any company or unincorporated association formed by and representing the tenants of the lettable units within the Residential Premises, holding leases on similar terms.

1.18, interest. Four per cent above NatWest base rate, running from the due date until payment, before and after judgment.

1.20. Any right exercisable by the landlord may also be exercised by any superior landlord and by anyone they authorise.

1.22. Any covenant not to do something also means not to permit or suffer it to be done. So a leaseholder can breach a negative covenant by allowing someone else to do the thing.

1.24, “the insured risks.” The list the leaseholder must insure against: fire, earthquake, subterranean fire, burst or overflowing water apparatus, riot, civil commotion, strikes, labour or political disturbance, malicious persons, explosion, lightning, thunderbolt, storm, tempest, flood, impact by vehicle, boat, aircraft or falling articles, and accidental damage to underground pipes and cables.

1.25. Any requirement to obtain the landlord’s consent means the consent of both the landlord and all superior landlords.

Clause 2: The demise (what the lease grants you)

The operative grant. In consideration of the purchase price and of the rent, rentcharges and covenants, the landlord demises the dwellinghouse, premises and garage of the plot, edged red on Plan 2, to the leaseholder (you).

The recital immediately before it confirms the landlord is registered at HM Land Registry under title HP273036 with title absolute for the residue of the term granted by the Head Lease. This is why the document is an underlease: the landlord holds a long leasehold interest from New Forest District Council and is carving individual leases out of it.

Clause 3: What comes with the property, and what is held back

3.1 Rights granted to the leaseholder

3.1.1 The exclusive right to use the mooring berth edged red and coloured pink on Plan 2, solely for berthing a motor or other marine craft owned by the leaseholder, of an overall length not exceeding the length of the berth.

3.1.2 The exclusive right to use the car parking space coloured green on Plan 2, for one private motor vehicle owned by the leaseholder.

3.1.3 Rights held in common with the landlord and everyone else entitled:

free passage of water, gas and electricity through pipes, sewers, conduits and wires anywhere in the Village, now or within the perpetuity period;
rights of way over all roads, walkways and footpaths in the Village, but over walkways and footpaths on foot only;
rights of way for navigation of craft within the channels, canals and locks, including through the lock gates, subject to the landlord’s reasonable regulations;
support and shelter from adjoining or neighbouring premises;
the right to enter the adjoining land coloured brown on Plan 2 for all purposes connected with using the mooring berth;
the right to keep and maintain eaves, gutters, spouts, drainpipes, chimney cappings, foundations and similar structures (defined as “the Projections”) where they overhang or protrude beneath adjoining land;
3.1.3.7 a right of access at reasonable times in daylight, on reasonable notice except in an emergency, with or without workmen, plant and equipment, onto adjoining Village land so far as necessary to repair the boundary walls of the property and to repair, maintain, clean, replace and renew the Projections, exercised reasonably, causing as little damage as possible and making good afterwards.

3.1.4 A further access right on three days’ written notice, or at any time in an emergency.

3.2 Rights excepted and reserved to the landlord

The mirror image, and noticeably wider than the rights granted. In summary:

3.2.1 Free passage of water, soil, gas and electricity to and from any other part of the Village through pipes and wires in, on or under the property, whether existing or installed later in the perpetuity period.
3.2.2 All rights of light, air, support and shelter for neighbouring premises. The practical effect is that a leaseholder cannot object to neighbouring development on the grounds of lost light or air. Clause 10.3 says the same thing again from the other direction.
3.2.3 The right to enter the part of the property coloured pink hatched blue on Plan 2 for all purposes connected with the neighbouring mooring berths.
3.2.4 The right to erect scaffolding to build, repair or clean the exterior of adjoining or neighbouring buildings, notwithstanding that it may temporarily interfere with access to or enjoyment of the property.
3.2.5 A broad right of entry at all reasonable times for the landlord, its agents, servants, workmen and others to inspect, repair, replace or alter the pipes, sewers, conduits, wires, the marina wall and the sheet steel piling forming the face of the marina wall, and to carry out all other repairs, alterations or renovations in performance of the landlord’s own covenants, and to work on neighbouring premises. Exercisable reasonably, and all damage to be made good without undue delay.
3.2.6 The right to erect and maintain name plates, directional signs, lighting and ancillary cabling on the property.
3.2.7 The right to keep the landlord’s own Projections where they overhang or protrude beneath the property.
3.2.8 A right of access at reasonable times in daylight on reasonable notice, or immediately in an emergency, with workmen, plant and equipment, to repair the boundary walls of the Village and to maintain, clean, replace and renew the Projections, again exercised reasonably and making good.

3.3 and 3.4

The estate rentcharges set out in the First Schedule are reserved out of the property for the whole 999 year term. The lease also takes effect subject to the rights, easements, exceptions and reservations in the Property Register of title HP273036, and to the covenants and rights in entries 1 to 4 of that title’s Charges Register so far as they affect the property.

Clauses 4 and 5: Term and rent

The term is 999 years less 10 days calculated from 25 March 1984, giving every lease on the estate the same expiry of 15 March 2983 regardless of when it was actually granted.

The rent is a peppercorn payable on 25 March each year if demanded. The rent clause is therefore of no practical significance. The money in this lease flows through the estate rentcharges in the First Schedule and the service charge in clause 9.

Clause 6: The leaseholder’s obligations

This clause lists what you are obliged to do as a leaseholder. It is the longest clause in the lease, with twenty-three separate covenants. They group into five themes.

Money and insurance (6.1, 6.2, 6.3, 6.19, 6.20, 6.21)

6.1 Pay the rent and estate rentcharges when due.

6.2 Indemnify the landlord against existing and future rates, taxes and outgoings on the property, the berth and the parking space. Notify the landlord of the rateable value as soon as it is received, and of any later variation and the date it takes effect. This second obligation exists because the service charge apportionment in 9.4.4 is calculated from rateable values.

6.3.1 Insure the property yourself, for full reinstatement cost together with architects’, surveyors’ and other professional fees, against the insured risks in 1.24, with insurers of repute, in the joint names of the Superior Landlord, the Reversioner and the Owner, and produce evidence whenever required. If the leaseholder fails to insure or to produce evidence, the landlord may insure instead and recover the cost on demand with interest.

6.3.2 If the property is damaged or destroyed, rebuild or reinstate it to plans and specifications approved in advance by the Superior Landlord and the landlord, such approval not to be unreasonably withheld.

6.3.3 Maintain public liability and third party cover of at least £1M, or such higher figure as the landlord reasonably requires in line with the Port Authority, Trinity House or other competent authority, for claims arising from the leaseholder’s boat.

6.3.4 Do nothing that would make any of these policies void or voidable.

6.19, 6.20, 6.21 Pay VAT on any taxable supply. Pay interest on anything unpaid more than fourteen days after the due date, if required. And a broad indemnity, covered below.

The insurance structure is worth pausing on. The leaseholder insures their own house; the landlord insures the estate under 8.7. That is the opposite of the usual arrangement in a block of flats, and it follows from these being individual houses rather than units in a shared structure.

The building itself (6.4, 6.5, 6.6, 6.7)

6.4.1 Commit no waste and make no addition to the demised premises.

6.4.2 Make no alteration to the exterior of the demised premises or to its external appearance.

6.4.3 Do not unite the property with any adjoining premises without written consent.

6.4.4 Do not close, block up or obstruct any road, pavement, waterway or channel under or adjoining the property.

6.5.1 Keep the property clean, tidy, clear of rubbish and in good and substantial repair.

6.5.2 Indemnify the landlord against damage caused to any part of the Village by the act, neglect, default or omission of the leaseholder, their servants or agents.

6.6 Decorate the outside every fifth year calculated from 25 March 1984, with at least two coats of good quality paint applied in a proper and workmanlike manner, in the same colours and style as at the date of the lease. This is the clause behind the estate’s uniform external appearance.

6.7 At the end of the term, yield up the property with vacant possession, clean, in repair and decorated. Given the term length this is theoretical.

Read together, 6.4.1, 6.4.2 and 6.5.1 mean that the leaseholder is responsible for keeping their own property in repair but is not free to change it: repair and redecoration in the existing style are obligations, while additions and external alterations are prohibited outright, with no consent mechanism written into 6.4.1 or 6.4.2 at all. Consent for those has to be sought as a variation or waiver rather than under the clause – hence the alterations policy.

How the property may be used (6.8, 6.9)

6.8.1 Use as a private residential dwellinghouse only, for the sole occupation of one family. No trade, business, profession or occupation.

6.8.2 Do nothing that may be a nuisance or annoyance, or cause danger, injury or damage to the Village, the landlord, its tenants or any neighbour.

6.8.3 No illegal or immoral use, no public exhibition or show, no political meeting, no catering, no auctions, and nothing dangerous, offensive, combustible, inflammable, radioactive or explosive kept on the property.

6.8.4 No obstruction outside the property, and nothing hung from the windows.

6.8.5 No machine that can be heard outside or that creates electrical disturbance outside.

6.8.6 Nothing corrosive or harmful discharged into the Marina, drains or sewers; reasonable precautions to keep the water free of flotsam and jetsam; best endeavours to prevent oil, grease or other deleterious matter escaping into the water.

6.8.7 Do not obstruct others lawfully using shared parts of the Village, and use them reasonably in accordance with any reasonable regulations made by the landlord.

6.8.8 Observe the marina regulations. The initial set is in the Second Schedule, but the landlord may alter them or make new ones whenever it considers it necessary, and the changes bind the leaseholder immediately on written notification being delivered to the property. This is a significant unilateral power: a substantial part of the day to day rules can be rewritten without agreement.

6.9 No flagpole, and no outside television or radio aerial.

Selling, letting and registration (6.10, 6.11)

6.10.1 No assignment, transfer, underletting, parting with or sharing possession of part only of the property.

6.10.2 Before any assignment, transfer or underletting of the whole for more than twelve months, obtain from the incoming party a direct covenant with the landlord in the form of the Third Schedule Deed of Covenant, promising to observe the lease covenants and, on an assignment or transfer, to pay the rent, rentcharges and other money.

6.10.3 Underletting the whole also needs the landlord’s prior written consent, not to be unreasonably withheld.

6.11 Within one month of any assignment, transfer, underletting, transmission or other devolution, leave two certified copies with the landlord’s solicitor and pay a registration fee, stated as £10 in the original leases or such larger sum as the solicitor reasonably requires, plus any superior landlord’s fee.

Access, enforcement, statute and indemnity (6.12 to 6.18, 6.22, 6.23)

6.12 Permit the landlord to enter, after prior written notice, in connection with development under clause 10.3.

6.13.1 Permit the landlord to inspect for any reasonable purpose on prior appointment, and immediately in an emergency.

6.13.2 This is the sharpest clause in the lease from a leaseholder’s point of view. Within two months of written notice, or immediately in an emergency, remedy any breach of covenant to the reasonable satisfaction of the Surveyor. For example if a property is not maintained in accordance with the lease the landlord may enter the property, remedy the breach itself, and recover all expenses with interest on demand. So the landlord has a self-help remedy that does not require going to court first, and the standard of satisfaction is set by a surveyor who, remember the definition above, may be its own employee.

6.14 Permit the landlord to enter, on prior written notice or at any time in an emergency, in connection with repair, maintenance, alteration or connection to the rest of the Village or anything serving it that runs through the property, or to comply with any requirement of a competent authority, without compensation, subject to reasonable conduct and making good without unreasonable delay.

6.15 Comply in all respects with all statutes in force and with any requirements of any competent authority relating to the property, do nothing that could expose the landlord to a levy, penalty, damages, compensation, costs or expenses, and indemnify the landlord so far as the law allows.

6.16 Pay all expenses of the landlord, any superior mortgagee and their professional advisers in connection with any notice requiring a breach to be remedied, anything connected with a breach, the preparation and service of a schedule of dilapidations during or after the term, and every consent applied for under the lease, including approval of drawings and specifications and inspection of the property.

In short, the leaseholder pays the landlord’s professional costs for asking permission as well as for getting things wrong.

6.17 Perform and observe the Planning Acts and indemnify the landlord.

6.18 Do nothing that would impose development land tax or a similar tax on the landlord, and indemnify against any such liability.

6.21 A broad indemnity covering all expense, loss and claims arising from any breach of covenant, from the use of the property, from any works carried out at any time during the term, from anything attached to or projecting from the property, or from any act, neglect or default of the leaseholder, their sub-tenants, servants, agents, or anyone on the property with their authority.

6.22 Perform and observe the lessee’s covenants and restrictions in the Head Lease so far as they relate to the property, notwithstanding any inconsistency between the underlease and the Head Lease. Worth knowing that obligations can therefore arrive from a document the leaseholder may never have seen.

6.23 Make no claim against the landlord for any temporary interruption or non-provision of marina services.

Clause 7: The landlord’s basic covenants

Only three, and they are noticeably much less than your obligations in clause 6.

7.1 Quiet enjoyment. The leaseholder shall have quiet enjoyment of the property against the landlord and all persons claiming title through it. This is the standard covenant and protects against interference by the landlord, not against third parties generally.

7.2 Enforcement against neighbours. If required by the leaseholder, the landlord will enforce covenants similar to clause 6 against the tenants of other lettable units. But this is conditional on the leaseholder indemnifying the landlord against all costs on a complete indemnity basis, and providing security or payments on account as the landlord reasonably requires. So the right exists, but the leaseholder funds it entirely and up front.

7.3 Notification of change. The landlord will notify the leaseholder of all substantial variations or extensions in the boundaries or constituent parts of the Village, and of all variations or amendments to the Management Agreement, unless they cannot affect the leaseholder’s interest.

Clause 8: What the landlord does for the money

This is the list of services and obligations that the service charge pays for. Note the opening words: the landlord’s covenants here are subject to and conditional upon the leaseholder paying the estate rentcharges at the right times.

8.1 Clean, repair, decorate and maintain in good and substantial repair and condition, and where necessary renew, rebuild, reinstate or replace, the Village, but excluding the lettable units. The named examples are the locks and ancillary equipment, the lock control building, the sea wall, the sheet face of the Marina wall, the piling, the sewage pumping system, the services and service conducting media, and the roads, walkways and footways.
8.2 Maintain, light and clean the landscaped and open areas not comprised in any lettable unit, and cultivate the trees, shrubs and plants there.
8.3 Maintain, cleanse and keep in good order and condition, including renewal, replacement and rebuilding, and where appropriate light and signpost, the roads, bridges, pontoons, mooring piles, car and boat parks, slipways, public conveniences, walkways and footways.
8.4 Provide, maintain and where necessary renew safety equipment in the Village, including firefighting and prevention equipment and life saving equipment.
8.5 Purchase such plant and equipment as the landlord considers proper to enable it to comply with its obligations, including repair, maintenance, insurance, renewal and replacement of that plant.
8.6 Maintain and dredge the boat channels within the Village and the navigation channel within Southampton Water, including channel markers, navigation equipment and waiting facilities.
8.7 Effect and maintain such insurance of the Village, other than the lettable units, as the landlord in its absolute discretion deems advisable or necessary.
8.8 Pay rates, taxes, duties, assessments, charges and outgoings imposed on the Village and its curtilage, as distinct from anything assessed on an individual unit, for example Crown Rent.
8.9 Employ, on whatever terms it thinks fit, one or more surveyors, builders, architects, engineers, tradesmen, accountants or other professionals, caretakers, porters, harbour masters, lock operators, maintenance staff, cleaners and anyone else the landlord in its absolute discretion considers necessary, including providing them with a flat or other accommodation free of rent, rates and outgoings.
8.10 Employ, at its discretion, a firm of managing agents, and pay all proper fees, salaries, charges and expenses to them or to whoever else manages the Village, including the landlord itself, plus the cost of computing, auditing and collecting the service charges.
8.11 Take all reasonable steps to enforce, where appropriate, the covenants in other leaseholders’ leases where those leaseholders have failed to observe them, again subject to being indemnified against costs.
8.12 The catch-all. Generally to do all such works, installations, acts, matters and things as in the absolute discretion of the Reversioner may be considered necessary or advisable for the proper maintenance, repair, renewal, rebuilding, safety, amenity and administration of the Village.
8.13 Operate a reserve fund, set aside in such sums and at such times as the landlord in its absolute discretion considers appropriate, against anticipated future costs, with a view to equalising the annual payments so far as practicable. The detailed rules:
- income of the fund must be applied within five years of receipt, and capital within eighty years of being set aside;
- the fund is wound up at the end of the term, on the determination of every lease of every lettable unit, or on service of a winding up notice signed by everyone entitled to participate in a distribution;
- on winding up, the fund pays accrued costs and the costs of winding up first, sets aside reasonable provision for the next sixty years of services second, and distributes the balance third, to every legal owner then obliged to pay a service charge, in the proportions their service charges bear to each other;
- the fund must be kept separate from the landlord’s own money, with proper books and records, and audited annually by the Accountant;
- the landlord may employ agents, nominees or trustees to hold or manage it, and there is no restriction on how it may invest or otherwise deal with the fund pending its application;
- the costs of managing and administering the fund, and all taxes on it, come out of the fund;
- all sums set aside into the reserve fund count as part of the total service charge expenditure for clause 9 purposes, so leaseholders pay when money is put by, not when it is spent.

Three features of clause 8 are worth carrying forward. First, 8.1 stops at the boundary of the lettable units: the landlord’s repairing obligation covers the estate, not the houses. Second, several of these obligations are framed around the landlord’s absolute discretion, most importantly 8.12, which is what makes discretionary works chargeable in principle. Third, everything in clause 8 feeds directly into clause 9.4.1 as recoverable expenditure.

Clause 9: The service charge

How it is calculated

The lease sets out three successive regimes.

The basic service charge: a flat annual figure stated in each lease, applying until the first 24 March after the grant.
The index linked service charge: from then until 24 March 1990, the basic figure uplifted by the general index of retail prices, using the January before the service charge year against the January 1986 base figure.
The certified service charge: for the entire remainder of the 999 year term. This is the regime that has applied since 1990 and is the one that matters.

The certified service charge is built in three steps.

Step one, the total service charge expenditure (9.4.1). The actual costs and expenses incurred by the landlord in that year providing the clause 8 services and otherwise complying with its clause 8 obligations, including any interest and fees on money borrowed to finance them, and including sums set aside into the reserve fund. It excludes anything paid out of the reserve fund itself and anything paid out of insurance money received under a clause 8.7 policy.

Step two, the Reversioner’s share (9.4.2). of that total, or such other proportion as may be allocated under the Management Agreement. The other share falls to the commercial side of the estate.

Step three, the specified proportion (9.4.4). Each leaseholder’s share of the Reversioner’s amount is the proportion which the aggregate rateable value of their property, mooring berth and parking space bears to the total aggregate rateable value of all residential lettable units in the Village on the first day of that service charge year.

How it is collected

9.1 Half yearly in advance on 25 March and 29 September, with the service charge year ending 24 March.

9.5.1 Before the start of a year, the landlord may serve a demand for an interim service charge, being a sum certified by it or its agents as a fair and reasonable estimate of the expected expenditure, payable in the same two instalments.

9.5.2 As soon as practicable after year end, the landlord prepares an account of total expenditure, and once certified by the Accountant that account is final and binding on the parties as to matters of fact. Note again that the Accountant may be the landlord’s own employee under 1.16.

9.5.3 Any excess over the interim charge is payable by leaseholders within fourteen days of demand. Any overpayment is credited against the next half yearly payment.

9.6 If a payment date arrives before the figure has been worked out, the leaseholder pays the same as the last ascertained payment, and it is squared up within fourteen days of ascertainment.

The landlord’s discretions

9.7.1 It may change the date to which the service charge year runs, making fair and reasonable apportionments.

9.7.2 It may make such fair and reasonable adjustments in the specified proportion as appear to be required by reason of any change in rateable values or any other change in circumstances.

One practical observation. Domestic rateable values were abolished in 1990, only a few years after these leases were granted, so the apportionment mechanism in 9.4.4 no longer has a live data source. The landlord has continued to use the last assessed rateable values since that time – and since leaseholders cannot modify their properties under the lease this is reasonable.

Clause 10: Provisos

Proviso’s qualify or limit what is said elsewhere in the lease. A good example is 10.1 below – earlier clauses say landlord can’t enter a demised property without notice. The proviso theortectically allows them to enter if a leaseholder does not pay the service charge – and the lease is terminated.

10.1 Proviso for re-entry. If any rent or estate rentcharge is unpaid for twenty-one days after becoming payable, whether formally demanded or not, or if there is any breach of any leaseholder covenant, the landlord may re-enter and the lease terminates, without prejudice to any other remedy including those under section 121 of the Law of Property Act 1925. Note: Statutory protections make forfeiture difficult to exercise against a long leaseholder in practice, and a court or tribunal determination of breach is generally required first, but this clause is what gives the rest of clause 6 its teeth.

10.2 Service of notices. Notices comply with section 196 of the Law of Property Act 1925, except that a notice which would ordinarily be delivered on a Saturday, Sunday, Christmas Day, Good Friday, bank holiday or public holiday is deemed served on the next working day.

10.3 Development of neighbouring premises. The landlord may carry out or permit development of the rest of the Village or any neighbouring premises, build on or into any boundary wall of the property, and re-route any services or access, without paying compensation for damage or otherwise, subject to exercising the right reasonably and making good, and notwithstanding any diminution of light or air. This is one of the widest clauses in the lease.

10.4 Damage from services. No liability to the leaseholder or anyone claiming through them for loss, damage or inconvenience caused by stoppage or defect of any plant, machinery or service in the property, the Village or neighbouring premises.

10.5 The landlord’s liability. Where the facts are or ought reasonably to be known to the leaseholder, the landlord is not liable for failing to perform any obligation unless and until the leaseholder has notified it of the facts and it has failed to remedy the matter within a reasonable time. The practical consequence is that complaints should be put in writing and dated, because the notification is what starts the clock on the landlord’s liability.

10.6 Party walls. Walls separating the property from any other part of the Village are party walls. The leaseholder maintains them as such and pays on demand a fair proportion of the cost of repairing, maintaining and rebuilding incurred by the adjoining occupier or by the landlord, that proportion determined by the parties or by the Surveyor, whose decision is final and binding on all matters of fact.

This impacts a number of items on the marina. For example walls/fences between two properties or between a demised area and the rest of the village. If between two neighbouring demised properties then repair is between the two leaseholders and not for the landlord. If between a demised property and the rest of the estate, then the cost is shared between the leaseholder and the estate (the estate cost covered by the service charge.)

10.7 Paragraph headings do not form part of the lease. Worth remembering when an argument rests on what a clause is called rather than what it says.

Clause 11: Residents Association

The landlord acknowledges that it is proposed that a Residents Association will be formed for the purpose, among others, of making representations to the landlord regarding the general management and upkeep of the Village including the Marina, and the landlord shall receive and consider the views and wishes of the Residents Association having regard to the principles of good estate management.

This is an obligation to receive and consider, not to agree, and it confers no veto. But it is a contractual obligation rather than a courtesy, and the reference to the principles of good estate management imports a recognised standard against which decisions can be measured. It is the Association’s formal hook into the management of the estate, and it sits alongside, not instead of, the statutory rights a recognised tenants’ association has.

The residents association is the Hythe Marina Association Limited. The landlords only legal obligation is to receive and consider (it doesn’t have to ask!) the views of the residents association. Importantly it doesn’t have to agree with the views of the association and the association has no ability to stop anything. The only means the association has to work with the landlord is therefore by agreement.

The First Schedule: Estate Rentcharges

Two rentcharges are reserved out of each property for the whole term:

a yearly rentcharge of £1, payable on 25 March, securing performance of the leaseholder’s obligations; and
the service charge itself, reserved as a yearly rentcharge as a contribution to the cost of the clause 8 services, payable at the times and in the manner set out in clause 9, with all remedies for non-payment applying.

Reserving the service charge as a rentcharge rather than treating it as a simple contractual debt gives the landlord the remedies attaching to rentcharges for non-payment. The schedule also confirms that acquiring the freehold before the end of the term would not extinguish these rentcharges.

This is important, even if we were able (and under current legislation it does not seem we can) obtain the freehold of our properties we would still have to pay the same service charge.

The Second Schedule: Marina Regulations

The rules governing use of the water and the marina facilities, alterable by the landlord at any time under clause 6.8.8. In outline:

Liability. The landlord and its employees accept no responsibility for loss, damage or delay from any cause whatsoever. All boats, craft and gear are kept and handled entirely at the owner’s risk, so owners must insure. Everyone using any part of the Marina does so at their own risk.

Lien. The landlord may exercise a general lien over any boat, its gear and equipment, while in the Marina, until any money owed is paid, whether for storage, berthing, mooring, work done or otherwise.

Navigation and the lock. All craft must be under power within the Marina, including the lock and entrance channel, and must not be sailed. The lock gates are operated only by the landlord’s employees, at times posted at the Marina Office, subject first to tidal conditions, with operation of the lock at the landlord’s absolute discretion, and second to the lock not having been rendered inoperative. Berthing and navigation outside the lock are subject to the harbour authority’s rules and bye-laws.

Conduct and environment. No dangerous, inflammable, poisonous or obnoxious substances except in properly secured leak-proof containers. No noisy or objectionable engines, radios or machinery causing nuisance, and halyards must be secured. No refuse thrown overboard or left on pontoons, jetties or car parks. No oil, petrol, tar, paint or noxious substance discharged. No chemical or sea toilet discharged within the Marina. Dogs on leads and not fouling the walkways.

Working on boats. No work causing nuisance or annoyance, with particular care to minimise dust when sanding. Rubbish and waste cleared daily, failing which the landlord may charge for removal and for making good. No boatbuilding or completion of a part-built craft anywhere in the Marina without prior written approval. The landlord accepts no responsibility for disturbance, noise or dust from building works at the Marina or in the Village.

Berthing and equipment. Dinghies, tenders and rafts stowed aboard unless a separate berth is provided. Nothing left on pontoons, jetties or car parks. At least one government or BSI approved fire extinguisher aboard, kept ready for use, and refuelling only at the designated points. The landlord may moor, re-berth, move, board or enter a craft and carry out emergency work where it considers this necessary for the safety of the craft or of the Marina, charging the owner reasonably for it. Craft berthed as the landlord requires, with the owner responsible for adequate warps and fenders. No rafting up without consent. No guarantee, condition, warranty or representation is given as to the suitability of any berth, structure, gear or facility.

Movements and keys. If a craft will be away for more than twenty-four hours, notify the landlord before departure with destination, estimated arrival and intended return. Leave a cabin entrance key and an engine key with the landlord so the craft can be moved in an emergency, though the landlord accepts no responsibility for their loss.

Living aboard. Nobody may live aboard any craft, afloat or ashore, except that the owner, crew and guests may live aboard when in commission for a continuous period not exceeding seventy-two hours on any one occasion.

Car parking. No vehicle may obstruct roadways, walkways, footpaths, slipways, the craneage platform or any working area, failing which the landlord may remove it by craneage or towing without responsibility for loss or damage and charge the cost. No tent, caravan or vehicle adapted for sleeping may remain on the Marina between midnight and 9am without written consent.

The Third Schedule: Deed of Covenant

The short form which every incoming buyer or long underlessee signs under clause 6.10.2. It is a direct covenant with the landlord, joint and several where there is more than one signatory, to pay the estate rentcharges and all other sums, and to observe and perform all the covenants, restrictions, stipulations and conditions in the lease, whether running with the lease or of a purely personal or collateral nature, to the same extent as if they were the original leaseholder. This is the mechanism by which the whole scheme keeps binding successive owners across a 999 year term.

The Fourth Schedule: the Management Agreement

The estate-level deed, made between Hythe Marina Limited (“the Company”, holding the Commercial Premises) and Hythe Marina Village Limited (“HMV”, holding the Residential Premises). Its structure closely mirrors the lease.

Clause 1 defines the same terms as clause 1 of the lease, applied at estate level.

Clause 2.2 records the development programme as 225 residential units with a mooring berth for each, together with a marina of 275 berths and associated commercial premises. This is the origin of the unit numbers used in estate-wide calculations.

Clause 3 is HMV’s services covenant, effectively identical to clause 8 of the lease, including the same reserve fund provisions. So HMV promises the commercial company exactly what it promises each leaseholder.

Clause 4 is the service charge machinery, mirroring clause 9. The estate-wide basic service charge was £75,000 a year until 24 March 1986, then index linked to 24 March 1990, then certified. The certified charge divides the total estate expenditure into the Company’s share and HMV’s share.

Clause 5 has no equivalent in the lease and is worth knowing about. If the number of lettable units or mooring berths in the Village ever changes, whether by extension of the boundaries, alteration of the programme in 2.2, or otherwise, the two companies must appoint an independent chartered surveyor to determine, acting as an expert and not an arbitrator, what change should be made to the proportions and from what date. If they cannot agree on the expert within fourteen days, the President of the RICS appoints one. The expert must have regard to the number of units and berths available to contribute to the service charge, and the decision is final and binding on matters of fact.

Clause 6 grants HMV rights of access over the Commercial Premises to carry out its obligations, and the estate rentcharges, with an obligation on the Company to preserve those rights in any onward dealing and to extend them to any additional land brought into the Village within eighty years.

Clauses 7 to 9 cover interest, VAT, and a limitation of liability: HMV is not liable for a failure until notified and given a reasonable time to remedy it, and in any event is not liable unless the failure is due to its own wilful act, neglect or default.