LEASEHOLD TENURE OF THE APARTMENTS

The apartments are offered for sale on 140 year leases. Leasehold is the preferred tenure for developments such as this, where property management services are provided and restrictions on occupation apply - which in this case require that all residents must be aged 55 or over.

An advantage of leases in Guernsey is that no Conveyancing Court formalities apply and so no Stamp Duty is payable on the original lease or any subsequent assignment. Long term leases are not widely utilised in Guernsey because leasehold property cannot be offered as mortgage security, so their use is generally restricted to older people’s housing.

BASIS OF LEASE

The fundamental provisions of the lease are as follows:

Residents must be at least 55 years old (other than guests – see below);

The lease is assignable;

The apartment can be sub-let provided the occupiers are aged 55+;

A monthly service charge is payable to cover the actual costs of running and maintaining the development (see below for items included in the service charge)

A sinking fund will be maintained to spread the cost of major repairs;

The service charge expenditure will be independently audited and the service charge funds held in a designated bank account with any interest earned being applied to reduce the service charge costs;

A rent of £59.60 per month is payable to the company to contribute to its office/administration costs involved in running and maintaining the development, which are not included in the service charge;

Owners are responsible for the internal maintenance and decoration of their apartment;

Owners pay for their own electricity, water and waste water disposal charges, telephone, television licence, Sky subscription, contents insurance and any other outgoings not specified in the service charge;

The lease includes the right to exclusive use of one or two car parking spaces;

An annual Owners’ meeting is held to discuss the service charge expenditure and any other matters arising.

The development has been designed and constructed to exceed the latest Building Regulation standards. In order to protect the integrity of the buildings - especially with regards to acoustic, thermal and fire insulation - the lease defines the apartment as only extending to the plaster skim and decoration on the walls and ceilings and the floor coverings. This has been done in the best interests of the development and should be beneficial to occupiers over time; it should not restrict the use or enjoyment of the apartments. The company can authorise works to the structure surrounding apartments.

SERVICE CHARGE & MONTHLY COSTS

The service charge is calculated on the actual costs incurred for each calendar year, which can only be determined once the year has ended. A monthly payment on account is made based on the estimated costs and, if there are major unforeseen variations, a balancing charge will be made or refund given once the actual figures have been determined. In practice, the difference between the estimated and actual costs should normally only be small in which case the amount provided for future major repairs through the sinking fund will be adjusted up or down to offset this difference, and so usually there will not be any balancing charge or refund.

The standard service charge is £265.00.

A further rent of £59.60 per month is payable to the company to contribute to its office/administration costs involved in running and maintaining the development, which are not included in the service charge.

OVERNIGHT GUESTS

In order to avoid potential undermining of the minimum age and occupation criteria, the following restrictions apply for guests staying overnight in an apartment:

No guest may stay for more than 14 consecutive nights;

No more than 28 nights in aggregate for any one guest in any calendar year; and

No more than 100 nights in aggregate for all guests in any calendar year.

This is intended to strike a reasonable balance for most circumstances, but the company is able to give permission for additional nights where appropriate.

These notes have been prepared for the assistance of prospective owners for the Braye Gardens development. They have been prepared carefully and are believed to be accurate. Opinions expressed on legal matters are based on the developers understanding of current Guernsey Law, but intending owners should seek independent legal advice if they are in doubt on any matter. This document does not form any part of an offer or contract.