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What is a leaseholder?

When a tenant purchases their flat or maisonette for the first time, they will enter into a lease for a term of 125 years for their property. This is because the freehold element of the building in which the property is located, and land on which the building stands, is owned by Merthyr Valleys Homes, as the landlord. The leaseholder owns the property within the building.

The Lease 

The lease is the legally binding document that sets out the responsibilities of both landlord and leaseholder, and includes such information as;

  • States the term of the lease, commencement date and purchasers details.
  • Defines the extent of the property purchased
  • States the requirement to pay a service charge, and;
  • Lists the items that are  rechargeable by the landlord
  • States the method to be used for calculation of the service charge and requirement to pay for future works

Service Charges

Leasehold service charges are set up by us to recover the costs we incur in maintaining and providing services and repairs to the block and related area in which you live.  Your lease also allows us to include a charge for future works and renewal of capital items where the monies received are held separately in a sinking fund.

Your service charges consist of a number of elements, such as;

 – Ground rent

This is an annual charge of £10, fixed by your lease and paid to Merthyr Valleys Homes who own the freehold of the land and block in which you live. This charge is paid separately to the main service charges.

 – Main Service Charges

The main components that make up your service charge are for;

  • Maintenance and repairs to the structure, common parts and related land and boundaries.
  • Block insurance to cover rebuilding costs and insured perils such as fire and storm damage.
  • Caretaker cleaning of the communal parts of the building.
  • Provision of communal electricity.
  • Cost for service contracts such as lift and fire equipment maintenance.
  • Contributions to a sinking fund which is set up to assist leaseholders to pay towards future works such as re roofing.
  • A management fee to cover the staff costs for dealing with all leasehold matters.

 – Sinking Fund

Your lease allows us to establish a sinking fund, where charges are included for the renewal and replacement of capital items such as re roofing, new windows, redecoration, lift renewal, aerial renewal.

The monies that you pay are added to your fund each year with a statement sent to you within the first 2 months of the new financial year that shows the following headings:

  • How much you had in your fund brought forward from the previous year.
  • How much we have charged for annual repairs and major works.
  • How much you have paid in during the year.
  • Interest added.
  • The balance of your fund at year end.

Service Charge Demands

Demands for the annual service charges are sent out by our Finance Department early in April of each financial year. Leaseholders are then able to contact us and make an agreement to spread their payments over a longer period if they wish.

Summary of Rights and Responsibilities for Leaseholders

To comply with legislation we have to include a copy of document, ‘Service Charges – Summary of tenant’s rights and responsibilities’, each time we make a demand for a service charge payment.

Maintenance, Repairs and Major or Planned Works

Merthyr Valleys Homes are responsible for the maintenance and repair to the structure and common parts of the building in which you live. Works are completed throughout the year to ensure that all parts are maintained to a high standard of repair.

From time to time we have to carry out works to replace capital items such as re roofing, windows, main entrance doors, and lifts, when they reach their estimated life expectancy. We also carry out re decoration of internal communal areas. All works are normally carried out on either a major or planned, programme of works.


Where a charge to leaseholders will exceed either £100 for services provided, or, £250 for works, Merthyr Valleys Homes must formally consult with leaseholders if we wish to recover the charge for these works or services. The consultation process is called ‘Section 20 Consultation’, the format of which varies in accordance with the type of works and contract being carried out.

If we do not consult then we are limited to charging the minimum amount and a Section 20 Policy has been produced to provide information on this process.

Service Standards

Merthyr Valleys Homes has developed service standards to explain the level of service you can expect to receive and allows you to monitor whether we are delivering this level of service.

Our booklet ‘Housing Service Standards’ includes a section on leaseholders.

Commercial Properties

Merthyr Valleys Homes owns 26 commercial units, situated throughout the borough, and trading as a variety of businesses.

We maintain a waiting list of interested parties for the eventuality of a unit becoming vacant. If you wish to be added to the list or have any queries on the commercial units, please contact us on 0800 085 7843 or 01685 727772

Garages (Ground Rent)

Merthyr Valleys Homes manages the tenancies of 223 garage plots, where the plot is owned and provided by Merthyr Valleys Homes for the tenant to erect their own garage and pays a ground rent to us as the freeholder of the land.

Tenants are able sell their garage to a new owner but must inform Merthyr Valleys Homes of any proposed new tenant.

If you have any queries on this or require any further information, please contact us on either 0800 085 7843 or 01685 727772.

Land Queries 

If you have any queries on the ownership of land, boundaries, or if you are interested in purchasing a parcel of land near your property, then please contact us on either 0800 085 7843 or 01685 727772.