Buying a Flat: The Complete UK Glossary and Checks (2026)

TL;DR: Buying a flat in the UK means navigating leasehold ownership, service charges, ground rent, cladding checks, and a stack of jargon that house buyers never encounter. This glossary covers every key term, explains why each one matters to your purchase, and includes the actual numbers and thresholds you need. Bookmark it and come back whenever a solicitor, estate agent, or mortgage broker throws a term at you that doesn’t make sense.

Why Buying a Flat Needs Its Own Vocabulary

Buying a flat is not the same as buying a house. Most flats in England and Wales are leasehold, which means you don’t own the building or the land underneath it. You own the right to live there for a fixed number of years, and that right comes wrapped in a legal document full of obligations, charges, and risks that can cost you tens of thousands of pounds if you miss them.

The problem is that most of the information out there is either narrowly focused on one issue (usually cladding) or hopelessly outdated. There’s no single reference that walks you through the full vocabulary of buying a flat from start to finish. That’s what this page is for.

If you want an independent, plain-English assessment of a specific flat before you make an offer, BackStory produces reports that pull together lease, cladding, planning, flood, and pricing data into a scored verdict within 24 hours for £30.

Property Types

Flat

A self-contained residential unit within a larger building. It has its own front door, kitchen, bathroom, and at least one room for sleeping and living. In the UK, “flat” and “apartment” mean the same thing in legal terms, though “apartment” tends to appear in marketing for newer, higher-specification developments.

Maisonette

A flat that spans two floors and typically has its own private entrance from outside the building. Maisonettes feel more like small houses and usually command a slight premium because of the extra privacy and the separate front door.

Purpose-Built Flat vs Converted Flat

A purpose-built flat was designed as a flat from the start, usually in a block with shared corridors and communal areas. A converted flat started life as something else, often a Victorian or Edwardian house that was later divided into separate units.

Converted flats can be charming, but they carry specific risks: thinner walls, shared drainage, and sometimes unusual legal histories when the original building was converted from commercial use under permitted development rights. Insurance can also be more expensive.

Ex-Local-Authority Flat

A flat originally built by a local council and later sold under Right to Buy. These are often cheaper per square foot than private equivalents, but they come with different dynamics. Service charges may be set by the council, major works bills can be large and non-negotiable, and some lenders apply stricter criteria (higher deposits, lower LTV limits).

Studio Flat

A single open-plan room combining bedroom, kitchen, and living space, plus a separate bathroom. Studios are the most affordable entry point for buying a flat, but resale can be slower because the buyer pool is smaller. Some lenders won’t lend on studios below a certain floor area (typically 30 square metres).

New Build vs Resale

New builds usually come with long leases (often 999 years), NHBC or similar warranty cover, and peppercorn ground rent under the Ground Rent Act 2022. The trade-off is a new-build premium of 10-15% over comparable resale flats, plus the risk of snagging defects.

Resale flats are priced by the market but may come with a depleting lease, older building fabric, and legacy ground rent clauses. The risk profile is different, not necessarily worse, but it demands more due diligence.

Ownership and Tenure

Leasehold

The dominant form of ownership for UK flats. You own the right to occupy the property for a fixed term, typically 99 to 999 years from when the lease was first granted. You do not own the building structure or the land.

Why it matters: everything that makes buying a flat complicated flows from leasehold. The length of your lease, the ground rent you pay, the service charges you owe, the restrictions on what you can do with your flat, and who manages the building are all dictated by the terms of your lease.

Freehold

Outright ownership of a property and the land it sits on, with no time limit. Freehold is the standard for houses but rare for flats, except in small conversions where one flat owner might also own the building.

Share of Freehold

When leaseholders collectively own the freehold of their building, usually through a company in which each flat owner holds a share. Common in converted houses split into two or three flats.

Share of freehold is widely considered the best form of leasehold ownership. It gives you control over the building, the ability to extend your lease cheaply (since you’re effectively negotiating with yourself), and a say in how the building is managed. When buying a flat, this is a genuine plus.

Commonhold

A form of ownership where you own your flat outright (freehold) within a development managed collectively by all unit owners. Commonhold has existed in English law since 2002 but is extremely rare in practice. The Leasehold Reform Act 2024 is intended to encourage wider adoption, though take-up remains minimal.

Freeholder (Landlord)

The person or company that owns the freehold of the building. The freeholder grants leases, collects ground rent, and has ultimate responsibility for the building’s structure (though this is usually delegated to a managing agent).

Some freeholders are individuals, some are residents’ companies, and some are large corporate landlords. Practitioners on Reddit frequently warn that the identity and track record of the freeholder can make or break the experience of living in a leasehold flat.

Leaseholder (Lessee)

You, the flat buyer. Once you complete, you become the leaseholder and inherit all the rights and obligations written into the lease.

Demise

The exact physical space covered by your lease. This sounds straightforward, but it varies. Some leases include the internal surfaces of walls and windows; others don’t. The demise determines what you’re responsible for maintaining and what falls to the freeholder or the building’s common fund. Your solicitor should clarify this before exchange.

Lease Terms and Risks

Lease Length (Unexpired Term)

The number of years remaining on the lease from the date you complete your purchase. This is the single most important number when buying a flat.

As a rough guide, look for at least 100 years remaining. Many lenders will not lend on a lease with fewer than 80 years left, or will impose stricter conditions. The official copy of the register from HM Land Registry costs £7 and shows the original term and start date. Subtract the years already elapsed, then subtract your mortgage term. If the result falls below 30 years, most lenders will refuse.

Short Lease

Generally defined as a lease with fewer than 80 years remaining. A short lease significantly reduces a flat’s value and makes it harder to mortgage. Below 80 years, the cost of extending the lease used to include something called marriage value (see below), which made extensions dramatically more expensive.

If you see a flat at a suspiciously low price, check the lease length. A bargain often isn’t one once you add the cost of an extension. You can see how lease length affects a real buying decision in practice.

Lease Extension

The legal process of adding years to your lease in exchange for a payment to the freeholder. Under the Leasehold Reform Act 2024, leaseholders can now extend their lease immediately after purchase rather than waiting the previous two-year qualifying period. Extensions typically add the lease back up to 990 years with ground rent reduced to zero (a peppercorn).

The cost of extending depends on the flat’s value, the years remaining, and the ground rent payable. Getting a lease extension quote from a specialist surveyor before you offer on a short-lease flat is essential.

Marriage Value

The increase in property value that results from merging a short lease with the freehold interest. Historically, leaseholders with fewer than 80 years remaining had to pay 50% of this marriage value to the freeholder when extending, which could add tens of thousands of pounds to the cost.

The Leasehold Reform Act 2024 abolished marriage value for most lease extensions. This is a significant change that makes extending short leases considerably cheaper than before.

Ground Rent

An annual payment from the leaseholder to the freeholder for the land the property sits on. Ground rent is separate from service charges and buys you nothing in terms of building maintenance or services.

What matters is not the current amount but how it changes over time. A fixed ground rent of, say, £200 per year is manageable. A ground rent that doubles every 10 or 15 years is dangerous.

Escalating (Doubling) Ground Rent

A ground rent clause that increases the amount payable at set intervals. The worst offenders are doubling clauses: £250 in year one becomes £500 in year 10, £1,000 in year 20, £2,000 in year 30, and so on.

Here’s the trap most people miss: a doubling clause that pushes ground rent past £1,000 per year can trigger assured tenancy rules under the Housing Act 1988. At that point, most lenders will refuse the property outright, which means you can’t sell it to anyone who needs a mortgage. Posts in HousingUK Reddit threads consistently cite escalating ground rent as one of the most common reasons flats become unmortgageable.

Ground Rent Act 2022

The Leasehold Reform (Ground Rent) Act 2022 capped ground rent on new leases (granted from 30 June 2022 onward) at a peppercorn, which is effectively zero. But if you’re buying a flat built before 2022, the ground rent clause in the original lease still applies unless the lease is extended. This distinction is critical: the Act protects future buyers of new-build flats but does nothing for the millions of existing leases already in force.

Forfeiture

The freeholder’s legal right to reclaim your flat if you breach the lease, most commonly by failing to pay ground rent. Forfeiture is the nuclear option and courts are reluctant to enforce it for small amounts, but the right itself can cause problems with mortgage lenders. Your solicitor should confirm the forfeiture provisions in any lease before you commit.

Restrictive Covenants

Rules written into the lease that limit what you can do with your flat. Common restrictions include keeping pets, running a business, subletting, making structural alterations, or installing hard flooring (to protect the flat below from noise). Breaching a covenant can give the freeholder grounds to take action against you, including forfeiture in extreme cases.

Costs of Flat Ownership

Service Charge

A regular payment (usually quarterly or annually) covering the cost of maintaining the building: cleaning communal areas, buildings insurance, lift maintenance, gardening, management fees, and contributions to a reserve fund.

Service charges vary enormously. Outside London, £1,000 to £3,000 per year is a typical range. In premium London blocks, charges can exceed £10,000. You can see how high service charges affect a buying decision in a real report example.

Always request the last three years of service charge accounts and the current reserve fund balance before making an offer. A pattern of rising charges with no clear explanation is a warning sign.

Reserve Fund (Sinking Fund)

Money set aside by leaseholders over time to cover major future works like a new roof, lift replacement, or external redecoration. A healthy reserve fund means you’re less likely to be hit with a large one-off bill. An empty reserve fund after a building has been standing for 20 years is a red flag.

Section 20 Notice (Major Works)

When the freeholder or managing agent plans building works that will cost any individual leaseholder more than £250, they must follow a formal consultation process under Section 20 of the Landlord and Tenant Act 1985. This gives leaseholders the right to be notified, to nominate alternative contractors, and to see the estimates.

Section 20 bills can be substantial. Reddit forums are full of leaseholders reporting unexpected demands of £10,000 to £30,000 or more for major works. Ask the managing agent directly whether any major works are planned or under consultation before buying a flat in any block.

Administration Charge

A fee charged by the freeholder or managing agent for lease-related paperwork: granting consent for alterations, registering a subletting, or providing information to your solicitor during the purchase. These can range from £50 to several hundred pounds per request.

Council Tax

A local tax based on the value band of your property, set by your local authority. Bands range from A (lowest) to H (highest). You can check the band of any property for free on the Valuation Office Agency website. Council tax is separate from service charges and ground rent.

Buildings Insurance

Usually arranged by the freeholder and recharged to leaseholders through the service charge. You have no say in who provides the cover, which has historically led to complaints about inflated premiums and undisclosed commissions. The Building Safety Act 2022 introduced some transparency requirements, but this remains a sore point for many leaseholders.

You are responsible for arranging your own contents insurance separately.

Building Safety and Cladding

EWS1 Form

The External Wall System fire-safety assessment form. If you’re buying a flat in a building with potentially combustible cladding or external wall materials, this form is evidence that a qualified assessor has inspected the building and graded its safety.

Grades range from A1 (no combustible materials, no concerns) through to B2 (combustible materials present that need remediation). An A1 or A2 rating generally means the building is mortgageable. A B1 or B2 rating can make lending difficult or impossible until remediation is complete.

Cladding and ACM Cladding

External wall materials applied to buildings for insulation or aesthetic purposes. Following the Grenfell Tower fire in 2017, aluminium composite material (ACM) cladding and other combustible materials were identified as serious fire risks. Thousands of buildings across the UK are affected, and remediation has been slow.

If a building has unresolved cladding issues, the flat inside it can be effectively unsellable to mortgage-dependent buyers. You can see a real cladding scenario in a sample BackStory report on a flat in Acton with live remediation.

Building Safety Act 2022

Landmark legislation that established protections for leaseholders in buildings over 11 metres tall. It created the Building Safety Fund, set up a new regulator, and placed remediation costs on developers and building owners rather than leaseholders in qualifying buildings. The Act also introduced the concept of a “responsible person” with legal accountability for building safety.

11-Metre and 18-Metre Thresholds

Building height matters for safety regulation and mortgage lending. Buildings over 11 metres (roughly four storeys) face stricter fire-safety scrutiny. Buildings over 18 metres (roughly six storeys) are subject to the most intense regulatory and lending requirements, including mandatory EWS1 assessments by most lenders.

If you’re buying a flat in a building near either threshold, check whether the building’s height has been officially measured. Some buildings that appear to be under 18 metres are technically over it when measured correctly, which changes the entire risk picture.

Fire Risk Assessment (FRA)

A legal requirement for all buildings with shared areas. The FRA is separate from the EWS1 form and covers general fire safety: escape routes, fire doors, alarm systems, and emergency procedures. You can request a copy of the most recent FRA from the building’s managing agent or freeholder.

Mortgages and Finance

Mortgageability

Whether a lender will actually provide a mortgage on a given flat. This is the hidden gating factor that catches many buyers off guard. A flat can be structurally sound, beautifully presented, and fairly priced, but if lenders won’t lend on it, only cash buyers can purchase it, and resale value drops accordingly.

Common mortgageability killers include short leases (under 80 years), escalating ground rent, unresolved cladding issues, non-standard construction (concrete frame, timber frame, certain types of cladding), and properties above commercial premises. Most lenders want at least 30 to 40 years remaining on the lease at the end of your mortgage term. A 79-year lease with a 25-year mortgage is borderline.

Loan-to-Value (LTV)

The percentage of the property’s value that the lender will provide as a mortgage. If you buy a £300,000 flat with a £30,000 deposit, your LTV is 90%. Flats, particularly ex-local-authority flats and high-rise buildings, sometimes require lower LTV ratios (meaning higher deposits) than equivalent houses.

Stamp Duty Land Tax (SDLT)

A tax paid on property purchases in England and Northern Ireland. First-time buyers pay nothing on the first £300,000 and 5% on the portion between £300,000 and £500,000, provided the total price does not exceed £500,000 and everyone named on the purchase is a first-time buyer. Scotland has Land and Buildings Transaction Tax (LBTT) and Wales has Land Transaction Tax (LTT), each with different bands and rates.

If you’re buying an additional property (a second home or buy-to-let), you pay a 3% surcharge on top of the standard rates.

Agreement in Principle (AIP)

A statement from a mortgage lender confirming how much they would, in principle, be willing to lend you. An AIP is based on a credit check and basic income information but is not a formal mortgage offer. Having one before viewing flats shows sellers and agents you’re serious. It typically lasts 60 to 90 days.

Valuation vs Survey

When you apply for a mortgage, the lender will arrange a valuation to confirm the property is worth what you’re paying. This is for the lender’s benefit, not yours, and it won’t tell you about defects.

For your own protection, you can commission a homebuyer report (suitable for most standard flats in reasonable condition) or a full building survey (advisable for older, converted, or unusual properties). Neither is compulsory, but skipping them to save a few hundred pounds is a false economy if the flat has hidden problems.

The Buying Process

Conveyancing

The legal process of transferring property ownership from the seller to you. For flats, conveyancing is more complex than for houses because your solicitor must review the lease, check the freeholder’s compliance with various obligations, and request a leasehold information pack.

Typical flat conveyancing costs range from £1,200 to £2,000, depending on the solicitor and the complexity of the lease.

Leasehold Information Pack (LPE1)

A standard form your solicitor requests from the managing agent or freeholder. It details the current service charge, ground rent, reserve fund balance, any planned major works, building insurance details, and known disputes. This document is one of the most important things your solicitor will review.

The LPE1 can take weeks to arrive and the managing agent will charge for it (typically £200 to £400). Delays in obtaining it are one of the most common causes of slow flat purchases.

Searches

Enquiries your solicitor makes with various bodies before you exchange contracts. The main searches are:

• Local authority search: planning decisions, road schemes, contaminated land, conservation areas
• Water and drainage search: connections to mains water and sewerage
• Environmental search: flood risk, ground stability, contamination
• Chancel repair search: historic liability to contribute to church repairs (rare but real)

Searches typically cost £250 to £400 in total and take one to three weeks.

Exchange of Contracts

The moment your purchase becomes legally binding. Before exchange, either side can walk away without penalty. At exchange, you pay a deposit (usually 10% of the purchase price), and both parties are committed to completing on the agreed date. If you pull out after exchange, you lose your deposit.

Completion

The day ownership transfers and you collect the keys. The remaining purchase funds are sent to the seller’s solicitor, the transfer deed is registered, and the property is yours. Completion usually happens one to four weeks after exchange, though the two can happen on the same day.

Chain

A sequence of linked property transactions where each sale depends on another. If the person selling you a flat also needs to buy somewhere, and that seller is also buying, you’re in a chain. Chains are fragile: if any transaction fails, the whole chain collapses. Flats often involve shorter chains than houses, particularly in new-build developments and when sellers are investors.

Gazumping

When a seller accepts your offer but then accepts a higher offer from someone else before exchange. Legal in England and Wales (not in Scotland). You lose your survey and legal costs. There’s no reliable defence against gazumping, though moving quickly to exchange reduces your exposure.

Gazundering

The opposite: you reduce your offer just before exchange, when the seller is committed and under pressure to complete. Ethically questionable but not illegal. It most commonly happens in falling markets or when a survey reveals problems.

Risk and Due Diligence

Due Diligence

The umbrella term for all the checks you carry out before committing to a purchase. For flats, due diligence extends well beyond the standard survey and searches. It includes reviewing the lease, checking the freeholder’s track record, examining service charge history, confirming cladding status, and assessing flood, planning, and environmental risks.

BackStory compiles these checks into a single scored report with a clear verdict, delivered within 24 hours.

EPC (Energy Performance Certificate)

A rating from A (most efficient) to G (least efficient) showing how energy-efficient the property is. All properties marketed for sale or rent must have a valid EPC.

If you’re considering buying a flat to let out, note that Minimum Energy Efficiency Standards (MEES) already require a rating of E or above for rental properties. Proposed tightening to a C rating by 2030 could mean expensive upgrades for lower-rated flats. Check the EPC before assuming rental income will cover your costs.

Flood Risk

Surface water, river, and coastal flooding can all affect flats, even those above ground level (access disruption, communal area damage, insurance costs). Your solicitor’s environmental search will flag flood risk, but you can also check for free on the Environment Agency’s flood map.

Flood risk affects insurance premiums and, in severe cases, lending decisions. A ground-floor flat in a high-risk area may struggle with both.

Planning History

What has been built near the property, what applications are pending, and what permissions have been granted. A new tower block approved next door will change your view, your light, and your flat’s value. Check the local authority’s planning portal and ask your solicitor to review recent applications.

You can see how planning risks surface in a real BackStory sample report.

Article 4 Direction

A local planning restriction that removes permitted development rights in a specific area. This matters if you plan to alter the flat or if the building could be affected by neighbouring conversions. In areas without Article 4 protection, offices and shops can be converted to flats without full planning permission, sometimes resulting in poor-quality developments nearby.

Comparables (Comps)

Recently sold prices of similar flats in the same area. Comps are the most reliable way to assess whether you’re paying a fair price. Land Registry data is public and free, though it runs a few months behind actual completions. Your mortgage lender’s valuer will use comps, and so should you.

Days on Market

How long a flat has been listed for sale. A flat that’s been sitting for six months when similar properties sell in six weeks is telling you something: the price is too high, there’s a problem the market has spotted, or the seller is unrealistic. It’s not always a dealbreaker, but it warrants investigation.

Managing the Building

Managing Agent

The company hired to run the building day to day: arranging repairs, collecting service charges, managing communal areas, and liaising with leaseholders. The quality of the managing agent has an enormous impact on your daily life and your costs.

Reddit discussions about buying a flat consistently highlight managing agent quality as a top concern. Inflated fees, slow repairs, and poor communication are common complaints. Before you offer, find out who manages the building and search for reviews or complaints online.

Residents’ Management Company (RMC)

A company owned by the leaseholders that manages the building, either directly or by appointing a managing agent. An RMC gives residents more control over costs and decisions than relying on a freeholder-appointed agent. If the building has an RMC, check whether it’s well-run by reviewing its accounts at Companies House.

Right to Manage (RTM)

A legal right for leaseholders in qualifying buildings to take over management from the freeholder without having to prove fault or buy the freehold. RTM requires participation from at least half the flats in the building. It gives leaseholders control over the managing agent appointment and service charge spending.

Collective Enfranchisement

The process by which leaseholders in a building collectively purchase the freehold from the current freeholder. This is the most permanent solution to freeholder problems but requires agreement and funding from at least half the qualifying leaseholders, plus payment of a price determined by a statutory formula (or negotiation, or tribunal).

Owner-Occupier vs Investor/Renter Mix

The proportion of flats in a building occupied by their owners versus rented out. A high percentage of owner-occupiers generally means better-maintained communal areas, more engagement with building management, and a stronger sense of community. A predominantly rented building isn’t necessarily bad, but it can mean higher turnover, less accountability, and sometimes lower maintenance standards.

Practical Checks Most Buyers Forget

Noise

If you can hear a television or a washing machine during a 20-minute viewing, you will hear it every evening for years. Visit the flat at least twice, ideally once in the evening or at a weekend when neighbours are home. Ask the seller directly about disputes with neighbours. Known disputes must be declared on a form during the legal process, but sellers sometimes downplay them.

Storage

According to estate agent checklists, storage is the thing flat owners complain about most. During viewings, look for a dedicated cupboard, a loft hatch, a bike store, anything. If there’s nowhere obvious for a vacuum cleaner and a suitcase, the flat will feel smaller within a month.

Resale Risk

Flats can rise in value but often appreciate more slowly than houses, partly because lease terms erode over time. Before buying a flat, think about who your future buyer will be. If lenders won’t lend because of a short lease, cladding issue, or non-standard construction, your resale pool shrinks to cash buyers, and the price drops accordingly.

Quick-Reference Checklist Before You Offer

Before putting in an offer on any flat, confirm or investigate:

1. Lease length: At least 100 years remaining. Subtract your mortgage term and confirm 30+ years remain at the end.
2. Ground rent: Fixed and under £250 per year. No doubling clauses. No RPI-linked escalation.
3. Service charge: Request three years of accounts and the current reserve fund balance.
4. Major works: Ask the managing agent about any planned or in-progress Section 20 works.
5. Building management: Who runs the building? Freeholder, managing agent, RMC?
6. Cladding and fire safety: For buildings over 11 metres, confirm EWS1 status and any ongoing remediation.
7. Flood risk: Check the Environment Agency flood map for your specific address.
8. Planning: Search the local authority planning portal for nearby applications.
9. EPC: Check the current rating and consider implications if you plan to let.
10. Comparables: Review Land Registry sold prices to assess whether the asking price is fair.

Covering all of this yourself takes time and expertise. BackStory pulls these checks together into a single report for £30, delivered within 24 hours, so you can make a confident decision before you commit.

Frequently Asked Questions

What is the difference between buying a flat and buying a house?

The biggest difference is tenure. Most houses in England and Wales are freehold, meaning you own the property and land outright. Most flats are leasehold, meaning you own the right to live there for a fixed number of years and must deal with ground rent, service charges, a freeholder, and a managing agent. Buying a flat involves a longer list of checks specific to the lease and the building.

How many years should be left on a lease when buying a flat?

Aim for at least 100 years. Most lenders require a minimum of 80 years remaining, and many want 30 to 40 years left at the end of your mortgage term. A lease with fewer than 80 years should be treated as a negotiation point, factoring in the cost of a lease extension.

What is a good service charge for a flat?

Outside London, £1,000 to £3,000 per year is a typical range. In premium London buildings, charges can exceed £10,000. The number alone doesn’t tell you much. What matters is whether it’s reasonable for the services provided, whether it’s been rising sharply, and whether the reserve fund is adequately funded.

Do I need an EWS1 form when buying a flat?

Not always, but if the building is over 11 metres tall or has any form of cladding, most mortgage lenders will require one. Without a satisfactory EWS1 rating, lending can be refused. Ask the estate agent about the building’s EWS1 status before you invest in surveys or legal fees.

Can I extend a short lease immediately after buying a flat?

Yes. The Leasehold Reform Act 2024 removed the previous requirement to own the flat for two years before applying for a statutory lease extension. You can now begin the process immediately after completion, which significantly reduces the risk of buying a flat with a shorter lease.

What should I check about ground rent before buying a flat?

Check the current amount, how often it increases, and by how much. Fixed ground rent under £250 per year is generally fine. Any clause that doubles the rent at regular intervals, or links increases to RPI or a percentage of property value, is a red flag. Ground rent clauses that push the annual amount above £1,000 can trigger assured tenancy provisions and make the flat unmortgageable.

How much does conveyancing cost when buying a flat?

Typical flat conveyancing costs range from £1,200 to £2,000. Flats are more expensive to convey than houses because the solicitor must review the lease, requisition a leasehold information pack, and check additional matters like ground rent provisions, service charge compliance, and building safety. Budget for the higher end if the lease is complex.

Is buying a flat a good investment?

Flats can be sound purchases, but they generally appreciate more slowly than houses over the long term. The key is buying well: a flat with a long lease, reasonable service charges, good building management, and no cladding or structural issues is a solid asset. A flat with a short lease, escalating ground rent, or unresolved safety problems is a liability. The difference comes down to due diligence, and getting the right information before you commit.