You might not think it too important when buying your new home, but you should really give it some thought as to why it is important to own the Freehold of your house.
There are two fundamentally different forms of legal ownership: Freehold and Leasehold. And the difference can be between a home that is worth buying and one that isn’t.
Many people who don’t sort this out when they buy a home end up regretting it – getting it wrong can be hugely expensive.
Freehold vs Leasehold
Very briefly, it makes the difference between owning your own home outright or having the equivalent of a landlord.
Freehold means that you own the building and the land it stands on outright (in perpetuity). With a freehold property your name is on the land registry as Freeholder, owning the “title absolute”.
Leasehold means that you just have a lease from the freeholder (sometimes called the landlord) to use the home for a number of years. The leases are usually long term – often 90 or 120 years but can be as high as 999 years. Normally you will find that flats are being sold Leasehold.
A leaseholder has a contract with the freeholder, which sets down the legal rights and responsibilities of either side and normally pays an annual “Ground Rent” to the freeholder.
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.
You might find this article published in The Gurardian on Saturday, 29th October 2016 an interesting read.
In any case, ensure that you know what you are buying before you sign on the dotted line.
By the by, CB Homes’ houses are always sold Freehold.