Site Map | Feedback | કી શૉર્ટકટ્સ | મદદ
5 Buying and Selling Property
8. Leasehold, freehold and commonhold properties
If you buy the freehold of a property, you own both your home and the ground it stands on. Most flats and some houses are sold leasehold. This means you own your home for the period of the lease, and you have to pay ground rent to the freeholder (or their managing agent). The freeholder is often called the landlord. The lease may be as long as 99 years or even 999 years to begin with. But it reduces over time, and may be much less at the time you are buying or selling (see 'When the lease runs out').
The lease lists the rights and responsibilities of you and the freeholder. Often a lease is a complicated document and you should get your solicitor to explain it. With leashold properties, for example, often you have to get the freeholder's consent before you can extend the property or change the fencing.
You could lose your home or have to pay compensation if you break the terms of the lease, but the freeholder must give you written notice and time to put things right before they can go to court to enforce this. In the same way, a leaseholder can take legal action against the freeholder if they break the terms of the lease, for example by not maintaining common parts of the property properly (see 'Management and service charges' below). The lease may also include a third party who is appointed manager of the premises. This can sometimes be a resident management company, run by the tenants. If the lease includes a third-party manager, they will also be able to take action against you if you break the terms of the lease.
There is a new alternative to leasehold, called commonhold, under which all the owners of a block of flats, for example, are joint owners of the building, and there is no overall landlord. For more about this, see ‘What is commonhold?’.
Management and service charges
As a leaseholder, you will pay a service charge to get repairs done. The lease should say how the service charge is worked out, and how it's divided between all the leaseholders. The charge may vary from year to year, depending on what is done. You may also have to pay a fixed amount into a reserve or 'sinking' fund each year to cover the cost of major repairs, such as replacing the roof. The freeholder must consult the leaseholder before doing major work.
Common service-charge problems include:
In cases like these, you should try to sort out the problem with the freeholder first. If that doesn't work, you may need to take legal action to sort out the problem.
You can apply to a leasehold valuation tribunal (LVT) to deal with certain problems. These include cases where:
You can also apply to an LVT if you think that the price the freeholder wants you to pay for a new lease or to buy the freehold is unreasonable. Other problems, such as enforcing the landlord's obligations under the terms of the lease, may mean you have to go to court. The Leasehold Advisory Service can give you more information about your rights as a leaseholder, and put you in touch with your local leasehold valuation tribunal (see 'Further help' for details).
Whatever your problem, don't withhold service charges or ground rent without first getting advice.
Residents and tenants associations
When the lease runs out
Extending the lease on a house
Renewing the lease on a flat
Buying the freehold
If you are a leaseholder (or you are buying a leasehold property), you may have the right to buy the freehold of your property. This is called 'enfranchisement', and it can be a good idea, particularly if the existing freeholder doesn't maintain the building properly. The rules are different for houses and flats.
Buying the freehold of a house
You must give the current freeholder written notice that you want to buy. You should also get legal advice.
You will pay the price of the freehold and the landlord's costs. You may also need to pay a share of what is called the 'marriage value' (the increase in value from joining the leasehold and freehold interests).
You may need to apply to a leasehold valuation tribunal or the court if you cannot agree terms. The Leasehold Advisory Service can give you more information on how to do this (see 'Further help').
Buying the freehold of a flat
If other leaseholders buy the freehold of your building but you do not join them in the purchase, your rights and responsibilities as a leaseholder do not change - it's just that your freeholder will be the group of neighbours who have joined.
You can get more information about buying a freehold from the Leasehold Advisory Service (see 'Further help'). However, the actual process of valuing and buying a joint freehold is long and complicated. You will need expert help from a valuer and a solicitor. The valuation will be based on not just on the open market value but the 'marriage value'.
There are other ways to obtain the freehold of your building. In most cases, a freeholder who wants to sell the freehold of a block of flats must first offer the leaseholders the chance to buy it before offering it to anyone else. Leaseholders may also have the legal right to buy a freehold when the landlord has a poor record of carrying out their role, for example, in maintaining the property.
freeholdAnother option is to convert from leasehold to commonhold, which is a new system of joint ownership. See ‘What is commonhold?’, below, for more about this.
What is commonhold?
Commonhold was introduced in September 2017 as a new way of owning property. It is meant to be better than leasehold for some types of property, particularly blocks of flats.
Under commonhold, a block of flats, for example, is owned jointly by all the owners of the flats. Unlike leasehold, there is no overall landlord. The freehold is owned by a company called a commonhold association, and the owner of each flat is a member of this association. The commonhold association is responsible for maintaining the common areas of the building. All the members must sign a statement, called a commonhold agreement, agreeing to keep to certain terms and conditions. The terms are similar to those in a lease; for example, agreeing not to cause a nuisance to other residents.
Commonhold has several advantages over leasehold:
The main potential disadvantage of commonhold is that the members of the commonhold association must enforce the rules in the commonhold agreement, which might cause tension between members (neighbours in the same building).
How can I buy a commonhold property?
Most commonhold developments are likely to be new ones built after September 2017, when commonhold started. Property developers can choose whether a development will be leasehold or commonhold. There are unlikely to be many commonhold developments to begin with, because developers will want to be sure that there are no problems with the system.
Can I convert my leasehold to commonhold?
You may be able to convert to commonhold, but you and the other property owners in your building will first have to buy the freehold, and every property owner in the building will have to agree to convert to commonhold.
Converting to commonhold can be complicated and expensive. It is probably most suitable for people who live in large blocks of flats where there is also commercial property, such as offices. If you live in a small block, simply buying the freehold may be cheaper and easier.
If you do want to convert to commonhold, you will need help from a solicitor with expertise in this. For more information about commonhold, contact the Leasehold Advisory Service (see ‘Further help’).
This leaflet was written by the Legal Services Commission (LSC). It was written in association with Shelter.
Leaflet Version: April 2019
સાઈટમાં વિષયોનું માર્ગદર્શન: CLS વિશે | કાનૂની સહાય | હોમ | કી શૉર્ટકટ્સ | મદદ
યોગદાન આપનારાઓનાં નામો | નિયમો અને શરતો
સેક્શનમાં વિષયોનું માર્ગદર્શન: CLSનું ભંડોળ અને ખર્ચના દર
CLS Legal Info Leaflets
29 I am in arrears with my rent. What are my rights?
(Legal Information Leaflets)