Freehold AS WELL AS Leasehold

[lorla]

I'm in the process of buying my first home and am confused about the freehold and leasehold. I was told I would have the opportunity of taking on a share of the freehold as the guy I'm buying from had a share. But I also have a lease for the property of 74 years. How and why do I have the freehold as well as the leasehold - surely you only have one or the other?

[Diamondson]

It's not complicated really. Leasehold is when the land built on remains in the ownership of the developer or original landowner and YOU pay an annual ground rent. Freehold means that YOU own both the dwelling and the land on which it stands. Around twenty or so years ago the law was changed so that the a Leasholder was given the legal right to buy the Freehold. As far as I can remember the fee was set at about ten years ground rent. What I don't fully understand is how you can own only part of the Freehold. If the previous owner HAS bought part of the Freehold then surely that should be passed on to you as he owns it along with the dwelling.You really need to check it out with your solicitor. If you intend to stay in your new home for a long time why not buy the Freehold outright and then YOU will own the the Whole thing? It will also simplyfy things when you eventually sell the property.

[buildersmate]

I wondered about the 'part freehold' bit as well. Could be part of an equity (freehold) share arrangement - as promoted by Government to help people get onto the property ladder?

[123paul]

It is highly doubtful that you will own a 'part' of the freehold. If its leasehold enfranchisement you will probably find the freehold is held by a management company & you will own a share in that.

[123paul]

In fact you are right, a concurrent interest under a leasehold (i.e., immediate right under the leasehold at the asme time as the right under the freehold) cannot be held by the same person as the interest under the freehold as in law they merge.

[Golden Shred]

The first answer by 123paul is correct. You will find that there is a management company which owns the freehold and your share of the freehold will be by way of a share in the management company. The management company grants leases and the lease is your right to occupy the specified part of the freehold (not the share, which is separate and entirely different). You will be expected to attend management company meetings the business of which will be the running, maintainance, insurance and general upkeep of the entire freehold. You will be obliged to make payments to the management company from time to time as your share of general repairs, improvements, running costs, etc. Your lease of 74 years is getting a bit short and when it reaches 70 years it will be time for the management company to issue a new 99 year lease.

[123paul]

So is the second answer !