There are two types of legal estates in property law; Leasehold and Freehold. Many people are confused as to the distinction between the two and concerned that they will acquire less rights when buying a Leasehold property than they would acquire when buying a Freehold property.
When buying a Freehold estate you purchase that property outright. In other words, nobody except you has any rights to occupy or make use of that land. That property is yours until you formally transfer or sell the property to someone else.
When buying a Leasehold estate you are buying the property for a period of time and a landlord owns the freehold title. The lease term can vary from and can be for a very long term such as 999 years. During this term only you will have a right to occupy the property and make use of the property and it is yours until you formally transfer or sell to someone else. At the end of the term the leasehold ends and ownership of the property would revert to the Landlord.
Your rights in the property of a leasehold estate are broadly the same as the rights benefiting the purchaser of a freehold estate. However, the lease may impose more restrictive covenants than a freehold property. For instance, the leases of a block of flats are likely to impose restrictions to ensure property owners do not cause a nuisance to neighbours or affect the common areas of the block. Furthermore, if the remaining term of the lease is relatively short, it will be imperative to ensure the lease is extended prior to purchase. Leasehold properties with relatively short remaining terms left on the lease are less valuable than longer term leases.
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