What does 'Freeholder' mean when buying a property?
Find out what Freeholder means when you are buying a property. 'What does Freeholder mean?' plus over 150 other property related terms and jargon in plain English
A person who owns a building and the ground on which it sits is a freeholder. Most house owners (but not all) are freeholders while most apartment owners are leaseholders.
Where there is both a freeholder and leaseholders the freeholder has sold the leaseholders a "lease". This is a right to live in a property for a certain number of years (known as the Lease Length) for a one off payment.
If you see a property advertised as "Leasehold flat with 144 year lease of r £X" you are effectively buying the rights to live in that apartment for the next 144 years after which, theoretically, you must give it back to the freeholder. It never actually comes to this though because you have rights under law to purchase a lease extension.
The freeholder is usually obliged to maintain the building in a good state of repair while leaseholders are obliged to pay the freeholder an annual sum of money to cover these costs - this is known as the Service Charge.
The freeholder can be anything from a person to a foreign bank as freeholds can be bought and sold on the open market.
Freeholders are therefore often more investors rather than building maintenance orientated and so they will contract out many of their obligations to a Managing Agent.
To find out more about the role of the Freeholder, because one will be involved in your property purchase, pick up a copy of my ebook How to Really Buy a Property.