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Freehold or Leasehold?

Freehold or Leasehold?

There are two ways in which a property can be owned, either with a Freehold Title or a Leasehold Title.  These are two very different types of Tenure of land and the fundamental difference is whether you will own the land outright or not.


Where a property is registered with a Freehold Title, the property will be owned by the most complete form of ownership.  You will own both the building and the land that the building is built on and you will own them completely, without any time restrictions or need to pay any rent to anyone.  When buying a property, a freehold property is usually the preferred option for most purchasers as the whole of the title will be owned and there will be no third parties involved.


Where a property is registered with a Leasehold Title, the owner of the property does not own the land and building, and in fact only has a right to occupy the property for a period of time subject to paying a rent and possibly other costs such as service charges.  The property will be subject to a formal document known as a ‘Lease’ which although it grants an exclusive right for the owner to occupy the property for a fixed term, e.g. 99, 125 or even 999 years, it also contains a number of specific rights and restrictions that must be observed and performed during a person’s period of ownership.

If a person holds a Freehold interest in a property, they have the option to grant a Leasehold interest to another person thereby creating a Landlord and Tenant relationship.    The owner of the Leasehold Title will be known as the ‘Tenant’ and the owner of the Freehold title, will be known as the Landlord.  As a Tenant, you will not own the land that the property stands upon and as such will be required to pay ground rent – essentially to rent the ground upon which the building is situated.

For further advice in relation to Freehold and Leasehold properties, contact our experienced team at any of our Leicester offices.

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