Do you know the difference between Freehold and Leasehold? Does it matter?

What is freehold?

If you own the freehold, it means that you own the building and the land it stands on. A freehold estate in land (as opposed to a leasehold) is where the owner of the land has no time limit to his period of ownership. You won’t have to pay annual ground rent.

By owning the freehold of a property, you have the sole responsibility for maintaining the fabric of the building – the roof and the outside walls.

Houses are generally sold as freehold. However, please note flying-freeholds.

Service charges are not generally payable with freehold properties. However, take note that developers are now requiring owners of new build properties to contribute towards the maintenance of shared driveways and communal/estate landscaping. Check before you buy.

Generally, the only ways in which you can lose a freehold property is either by repossession by your lender due to non-payment of your mortgage or compulsory purchase.

 What is leasehold?

Leasehold means that you own a property (usually a flat) for a fixed term but not the land in which it stands on.  There is an agreement between you the Leaseholder and the Freeholder, the party who owns the land in which the entire block is situated. This document is a called the ‘Lease’.

The lease is usually long term, often 99 years, sometimes as high as 999 years. The lease also sets down the legal rights and responsibilities of either side.

Possession of the property will be subject to the payment of an annual ground rent. In addition to ground rent leaseholders will usually also pay service charges and their share of the buildings insurance.

The Freeholder will normally be responsible for maintaining the common parts of the building, such as the entrance hall and staircase, as well as the exterior walls and roof. However, other leaseholders might have claimed their “right to manage”, in which case it is their responsibility.

When the lease expires, ownership of the property reverts back to the freeholder.

A major consideration is, if you as leaseholder do not fulfil the terms of the lease; for example, by not paying the ground rent/service charges or breached a term of the lease then the lease can be forfeited, and you will have to give up possession of your property.

Taking the above into account, Freehold is generally the preferred option.

If you would like further information in respect of the above, please do not hesitate to contact one of our friendly team on 01279 466910 or send us an email to

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Quick Tips for Private Landlords and Tenants

It is not uncommon for property to be used as an investment. To gain an income from that investment, it is often let to a tenant. As a private landlord you need to protect yourself.

For starters do you have a Tenancy Agreement? This is often in the form of an Assured Shorthold Tenancy (AST) and usually for a fixed term. When that fixed term expires the terms of the AST remain in place but becomes a periodic tenancy. This then effects how the tenancy can be brought to an end.

One of the most important elements is whether the tenant’s deposit has been protected. Since 6 April 2007, all deposits taken by landlords and letting agents for ASTlandlord_keys’s must be protected by a tenancy deposit protection scheme. If the landlord fails to comply, an application can be made to the court and possession can be barred. Furthermore the landlord is likely to be requested to return the deposit or place it in an appropriate scheme, if the tenancy is continuing and be liable for a penalty of up to three times the amount of the deposit.

The next difficulty comes when you require possession of the property. This could be for a variety of reasons such as, but not limited to, you requiring it for personal occupation, the tenant’s failure to pay rent or breach of another term of the AST, or even if the tenant has been convicted of a criminal offence.

To obtain possession the first stage is to issue either a section 8 or section 21 Eviction_Noticenotice. Dependant on the grounds, the tenant will be given between two weeks and two months to vacate, failing which possession proceedings can be issued.

There are two types of proceedings. The quickest and the simplest route is the Accelerated Procedure. This is in essence a paper exercise and can only be used if you do not wish to seek any other orders, such as judgment for rent arrears. The other option is the Standard Procedure which can include additional claims for rent arrears, damage to property etc. This route requires a Court hearing.

Once a Possession Order has been ordered, the tenants will typically be given 14 or 28 days to leave the property. The Judge can give them up to 42 days if leaving sooner would cause exceptional hardship. If the tenants do not leave at this point, bailiffs can be instructed to enforce the Possession Order.

Whether you are a landlord or a tenant in any of the situations described above Watson Legal can help. We offer fixed fees for this type of work. Please call 01279 466910 to arrange a free 30 minute consultation.