The tenure of a property relates to Land Laws and Land ownership. Simone Bayly is a Senior Paralegal in our Conveyancing Team. She has explained the different types of tenure and some of the considerations when buying a flat or house.
When you own a freehold property, it means that you have outright ownership of the property and also the land on which it stands. Most houses are freehold, but there are some houses, particularly estates built in the last decade, where houses are sold as leasehold properties.
This method of owning property usually applies to a flat or apartment. This means that you own the property which comprises your apartment but not the ground on which is stands (as this is shared with the other apartments). The land is leased from a freeholder for a fixed term.
Your possession of the property is bound by an annual payment to the freeholder, known as ground rent.
When the lease expires, ownership of the property reverts back to the freeholder. The lease length may be extended by agreement with the freeholder at a specified cost – this is known as lease extension.
Share of Freehold
This is when the freeholder divides up his responsibility and the leaseholders become directors of their leasehold company. This is quite common when a large house has been divided into flats.
Owning a share of the freehold means that it is fairly easy for you and the other property owners to extend the length of your lease and you have more control over your home and the costs that you will have to bear while you are the owner.
Commonhold is a type of freehold ownership. It is designed to help flat owners get full ownership of their property, instead of having it on a lease.
Everyone within a building or block of flats comes together to form a company, known as a Commonhold Association. That company then owns the freehold of the building.
More information on leasehold properties
- Lease lengths vary. It is common to start at 99 years or 125 years. It is possible to have 500 and 999 year leases and this is especially common for ex-local authority homes.
- Mortgage lenders usually require there to be a minimum of 50 years left on the lease at the end of a mortgage term (i.e. 75 years in total) although some lenders can be unwilling to lend even on leases of 90 years.
- Every lease includes enforcement covenants, rights of way and access, repairing and maintaining covenants, details of ground rent. Essentially, these are the “ground rules” and obligations for you as the property owner and the freeholder as the land owner.
- A service charge is common but is not essential, it is usual in larger blocks of flats or where there is a lift or other facilities to maintain.
- Some blocks have a separate managing agent employed by the freeholder.
Our Conveyancing Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. If you have any questions, you only have to ask us at Frettens. Please call 01202 499255 and Simone or her team, will be happy to chat about your situation and you particular requirements.