Our, “guest Blogger” this weekend David Barchan. David is a Property Lawyer with well over thirty years experience.

A question that crops up time and again in our respective industries, one that perhaps we professionals take for granted, is the, “whats the difference between a freehold and leashold”.

David explains….

“I just want to say a few words about a subject that does seem to cause some confusion from time to time.

In England there are two types of legal ownership of property:  Freehold when you own both the property and the ground on which it stands outright and leasehold where you own the property itself (everything within the four walls of your house or flat) but lease the land your house or block of flats is on.

What we are concerned about in this article, is called “share of Freehold” which means you own a share of the freehold of the grounds your leasehold house or flat is situated.

I occasionally come across clients who proudly say that they have put in an offer for a “freehold flat”.

Typically, I would explain to the client that the flat itself will be leasehold but that there will be a share of the freehold included in the purchase.

There is often a misconception here.

English Law does not recognise the concept of a “freehold flat” and therefore the nearest we get to that is, typically, a lease of a flat with anything up to 999 years which therefore changes hands as each owner from time to time sells on.

The freehold ownership, however, remains constant – i.e. owned by the management company. As each flat owner sells up he or she passes his or her share in the management company to the next owner who therefore owns a “share of the freehold” along with the other residents.

This is an ideal state of affairs for any flat owner because it means that he or she will have some say in the management of the property in his or her capacity as part owner (along with the other residents) of the freehold.

This situation can either be achieved, and often is achieved, by agreement with the original freeholder and sometimes by all the residents banding together and using the available legislation to claim the freehold. If for whatever reason all the residents of a block of flats do not wish to own the freehold or cannot claim it the next best step would be to extend the existing lease.

This is a very simple example of what happens with share of freehold in a block of flats as opposed to a converted house of 2 – 3 flats only which would be a good blog for another time.

I can provide advice both in relation to residents collectively buying the freehold (which is called “enfranchisement”) as well as lease extensions”.

David H. Barchan, LL. B.
Consultant
Yugin & Partners Solicitors
Regent House, 21 Church Road, Stanmore, Middx HA7 4AR

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Email: [email protected]

Web:  www.yuginlaw.com