At Ross Williams, our expert conveyancing solicitors are experienced in leasehold transactions and can advise you whether you’re buying or selling a leasehold property. When you buy a leasehold property for example a house or flat, you are in effect buying the right to occupy the property the fixed term of the lease. In effect you do not own the land that the property is built on. This will remain the landlord’s ownership.
In spite of this, buying a leasehold property is the same as buying a freehold property, with the additional aspects of a lease between you and the landlord. The lease is a legal contract that outlines the responsibilities of the landlord to manage, maintain and repair the building structure, common areas and exterior. The lease will also specify your obligations as the purchaser, for example information relating to service charges and payment of ground rent
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What is a lease extension?
If your flat or property is leasehold then the lease gets shorter every year. This means that a lease is a diminishing asset and, if you let the length of your lease drop too low, there is a danger that it will affect the value of your property. If it becomes lower than 80 years, it could become difficult to sell or re-mortgage your property.
You may want to extend your lease to make your property easier to market and sell, or you may be the freeholder and have received a formal request for statutory lease extension. Either way you are going to need specialist legal advice. Ross Williams Solicitors are on hand to help with a dedicated property solicitor to guide you through the conveyancing process.
Our charges are transparent and we quote for all fees and disbursements up front, meaning that you’ll understand the full extent of your conveyancing charges from the very start.
What Is The Difference Between Freehold and Leasehold
Freehold and leasehold are both types of housing tenure. Housing tenure refers to the financial arrangements under which someone has the right to live in a house or apartment. The most frequent forms are a tenancy, in which rent is paid to a landlord, and an owner-occupancy. Mixed forms of tenure are also possible.
A freehold property; is a property where the ownership is outright of the property and the land which it stands
A leasehold property is a property where ownership of the property is for a fixed period of time (a lease) and is carved out of a freehold. When the fixed period expires then ownership of the property returns to the freeholder.
Terms of a lease:
A leaseholder has a contract with the freeholder, which sets down the legal rights and responsibilities of either side
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
- Leaseholders will have to pay maintenance fees, annual service charges and their share of the buildings insurance
- Leaseholders normally pay an annual “ground rent” to the freeholder.
- Leaseholders will have to obtain permission for any major works done to the property
- Leaseholders may face other restrictions, such as not owning pets or subletting
- If leaseholders don’t fulfil the terms of the lease – for example, by not paying the fees – then the lease can become forfeit
Lease lengths vary but most common leases are usually long term – often 90 years or 120 years and as high as 999 years – but can be short, such as 40 years. Mortgage lenders like there to be at least 50 years left at the end of a mortgage term (i.e. 75 years in total). It can be difficult to sell or remortgage your home if there are less than 80 years left on the lease. A series of Government acts have given leaseholders protection against short leases, by giving them the right to extend their lease or the right to buy the property – but this can be very expensive. You may want to extend your lease to make your property easier to market and sell, or you may be the freeholder and have received a formal request for a statutory lease extension. Either way, you are going to need specialist legal advice. Ross William Solicitors are on hand to help with a dedicated property solicitor to guide you through the process.
Whole houses are normally sold freehold – there is no reason for a standalone house to be leasehold though there is an increasing trend for leasehold houses, particularly with new build homes, so check before you buy. It will usually state quite clearly in the information if the property is freehold or leasehold but if it does not, this is something Ross Williams Solicitors will check for you.