It is vitally important when buying a property that you understand the difference between a Freehold and Leasehold title and you know what you are buying.
The official copies of the register entries supplied by the Land Registry clearly state in the Property Register whether the property is Freehold or Leasehold. Section 9 (2) of the Land Registration Act 2002 confirms the different title classes that can be registered.
Under a Freehold title you own the property and the land it rests upon, you do not have to pay a ground rent. You own the property in perpetuity and you are free to pass this interest on.
Under a Leasehold title you own the right to live in or use the property, be it house or flat but a Landlord or Freeholder own the fabric of the building. The Lease itself lays out the terms under which you can operate these rights. You usually have to pay a ground rent to the Freeholder (or their Managing Agent) and a contribution towards the upkeep of the building. Your right to live in or use the property only extend for as long as there is remaining on the term of the lease. You usually have to pay a fee to register your assignment of the lease when you purchase it. It is likely you will require permission for any works you wish to carry out to the property and you may face restrictions on the use of the property.
In most cases these are absolute titles of either the Freehold or Leasehold. This is the best class of title available. When purchasing an absolute title you are buying this subject to any easements or restrictions that already exist on the title. It is the job of your conveyancing solicitor to deduce the title from the information supplied by the seller and report this to you before you purchase the property.
If you are unsure the title under which you hold your property you are able to order a copy of the official register held at the Land Registry online for a small fee.
If you discover that your house is held on a long lease, you may be entitled to claim for the freehold or an extension to the lease term under the Leasehold Reform Act 1967 with the help of a lease extension solicitor.
Here at Hedges Law we take great pride in ensuring our clients understand exactly the title they are purchasing but if you are unsure you should ask for clarification before giving your authority to proceed.
If you are buying a leasehold property, its vital to check the years left remaining on the lease.
Anything around 80 years, think again - or ask the seller to factor in either the cost of a switch to freehold or an extension into their price.
Already own a leasehold house? You have a right to buy the freehold or extend the lease