Some flats offer a share of freehold. But what does this actually mean?
In this article, Leasehold and Freehold Property Specialist Kerry Martin explains the meaning of share of freehold…
What does share of freehold mean?
If you purchase a flat that has a ‘share of freehold’ it means that you will not only own your flat, but also a share of the freehold of the building.
This ownership of the freehold will be shared with other people that also own a share of the freehold.
Owning a share of freehold will generally give you more control over the block of flats and can allow you to have a say in how it’s being run.
This means that you won’t have a potentially exploitative landlord telling you what to do.
How does share of freehold work?
If you own a share in the freehold, you have a shared obligation (with your fellow freehold-shareholders) to undertake the responsibilities of the freeholder of the building (such as maintaining the condition of the building). Those obligations are set in both the flat leases themselves and in general laws relating to residential blocks/buildings containing flats.
Those who own the freehold, but don’t want to take on extra work can appoint a managing agent to deal with these responsibilities. Leases often provide that such managing agent costs are to be paid for by the owners between them.
Share of freehold vs leasehold
The difference between a share of freehold property and just a leasehold is that someone that owns just the leasehold (also known as the leaseholder) only leases their flat (for a fixed period of time) and has no say in relation to the building in general.
Whereas someone who also owns a share of the freehold not only leases their flat BUT ALSO has some outright shared-ownership of the building, over the property and its land.
If you own a share of the freehold, you have a say in how the property is managed. If you only own the leasehold, you don’t and answer to the landlord/freeholder.
Do I need to extend lease with a share of freehold?
If you own a share of the freehold, you will still own a leasehold flat – meaning you will still have to extend your lease in order to satisfy a future buyer or mortgage lender for when you want to sell or re-mortgage the flat.
Read more about lease extensions in our dedicated article here.
More on the share of freehold
To find out more about the share of the freehold, the value of it, the pros and cons and the fees involved, you can read our more in-depth guide here.
Or if you would like to speak to a solicitor, you can do so below.
Specialist share of freehold solicitors
If you’re looking to buy a flat that has a share of freehold or looking to acquire a share in the freehold on a property that you already own, we’d be happy to assist you (and field any questions).
Our specialist team are one of the largest in the area and have experience in all aspects of leasehold property including freehold purchase, enfranchisement, lease extensions and more.
Call us on 01202 499255, or fill out the form at the top of this page, for a free initial chat.
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