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Freehold and Leasehold

Whether you are selling or buying a property, it is important to know whether it is a freehold or leasehold. This article looks at each in turn, and explores the differences between the two.

Freehold

If you purchase a freehold property, then you have total ownership of the building and the land it is built on. This means no one else has any claim over the land, and you can reside there for as long as you wish. Furthermore, a freehold permits you to make changes, alteration and modifications to your property as long as they fall within the restrictions of the law. This may include gaining planning permission or obtaining consent for structural changes (particularly where listed buildings are concerned).

A freehold therefore has many advantages, as having exclusive rights to your property gives you a certain freedom over your own home and land upon which it sits. The main disadvantage, however, is that all responsibility lies with you. This means that the owner of the freehold must cover any costs that are incurred or carry out any repairs that are legally required.

Flying Freehold

A flying freehold is where an area of a freehold property covers part of another freehold property. This is not an unusual occurrence, and can include examples such as when a balcony overhangs a neighbouring garden, or when an attic extends over the top of an adjoining property.

Leasehold

In contrast to a freehold, if you buy a leasehold property then you are only purchasing the right to live in a property. You will not own the property or the land it is built upon, and you are only allowed to stay there for a set amount of time.

 

Within the terms of the lease there will also be an obligation to pay ground rent to the freeholder. The majority of leaseholds are flats, and the payment of ground rent should cover any maintenance costs, such as upkeep of communal areas and any repair work that may arise. How this service charge is calculated should be divulged in the lease, and if there are other leaseholders then details of how the costs are shared should also be provided.

Most leaseholds last for up to 99 years. Once this set period expires or if you decide to move, then a property is given back to the land owner. If buying a leasehold property, it is important to research the terms and condition of the lease, as those buying leases shorter than 75 years often encounter difficulties when trying to secure a mortgage.

Summary

If you require more information or if you have any other queries regarding the sale or purchase of a property, be sure to seek expert legal advice. A solicitor will be able to help you with all the complexities of conveyancing law and provide professional advice.

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