Freehold and leasehold property

If you are looking to buy, sell or rent out a property it is important to know whether the property is freehold or leasehold.

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What is the type of property?

Residential or commercial property can be either freehold or leasehold.

It is important to know the type of property so you know what you can do with the property and whether any other party must be notified. 

Freehold

If you own a property or are looking to buy a property that is freehold this means that you own the whole property and the land it is built on.  You have no time limit to ownership.

Owning a freehold property means that subject to laws and planning, you have the right to deal with the land as you wish. 

Leasehold

Leasehold property is leased from the freehold owner and is the ownership of the property (but not the land) for a fixed term.  A flat is usually leasehold with the building remaining with the landlord.

If you have a leasehold property you only own it for a certain number of years.  For commercial property this may be for a short period of between 2-6 years or for residential property it may be for longer, either 99 years or 125 years.

The agreement between you and the freehold owner is the lease that contains details of the rent to be paid for the property and your obligations.

It is usual for a lease to contain a requirement that the landlord’s consent is required to let or sell the property and you will be responsible for the landlord’s costs for obtaining the required consent.

It is sometimes possible for the length of a lease to be extended or for a part of the freehold to be purchased.

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