Flats and Houses
One of the things that you need to know when buying is whether a property is freehold or leasehold or more recently commonhold.
Most houses are sold on a freehold basis which means that when you buy it, you own the actual property and the ground that it stands on.
Flats and properties such as business premises are usually sold on a leasehold basis. The land and often the building itself is owned by a landlord who then leases it back for a period of anywhere up to 999 years in return for a payment of a Ground Rent which is not usually a huge amount.
Like any landlord and tenant relationship, each side has its own responsibilities. Lease holders must follow the terms of the lease and often seek the landlord’s permission before doing any alteration to the property. In the case of a flat, there is a service charge payable to cover communal costs and there are responsibilities in observing the terms of the lease. In return the landlord has to maintain the property in good order.
More recently commonhold has come into the equation. This is based on the same principle as leasehold except that the buyer owns part of the landlord company with other residents in the development or building, or as it is more commonly referred, the buyer has a share of the freehold.