What does 'Leaseholder' mean when buying a property?

Find out what Leaseholder means when you are buying a property. 'What does Leaseholder mean?' plus over 150 other property related terms and jargon in plain English


A leaseholder is the person who owns a leasehold property.

This means you have a right to live in the property for a number of years specified in the lease but the land the property is built on and the building itself remain the property of the freeholder.

The freeholder is responsible for the upkeep of the building and communal services such as lighting in staircases, maintenance of lifts, etc.

To cover these costs leaseholders usually need to pay a service charge as well as a ground rent for the land which the building sits on.

If the freeholder does not want to get involved in the maintenance of the building he or she may well hire the services of a Managing Agent who will do this on their behalf.

To learn more about leasehold properties and the smart way to buy them pick up a copy of my ebook How to Really Buy a Property.

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How to Really Buy a Property

"... that you are not looking for your ideal property, you haven't got the deposit so by definition you cannot afford it. You are looking for a stepping stone to your ideal property. If you are also financially stretched, even if someone else would be happy to pay your deposit on that lovely Victorian flat, what happens when the roof needs to be replaced and each leaseholder has to find..."

"... a Freeholder: When the owner of a building sells off parts of that structure as leaseholds he is saying, "For this amount of money, you may use this part of the building for the next one hundred years. After that time you must give it back to me as I gave it to you." That is the basis of leasehold. The Freehold is a separate entity to the leasehold flats and can be sold with the leaseholders hardly noticing. As such the freeholder at the time you buy a property may be different a week later!..."
"... all the charges to pay and restrictions to adhere to on a leasehold property it is not surprising that many leaseholders decide that they would like to own the freehold of the building in which they live. Under certain conditions they have the right to buy the freehold from the freeholder at a "reasonable" price. It's a lengthy procedure but increasing in popularity, especially as it has a perception of adding value or desirability to a..."
"... buyer should be aware that just because one flat in a building is Share of Freehold, it does not follow that they all are. If you take a building with four flats - A, B, C and D. Flats A, B and C may decide they want to buy the freehold but Flat D wants nothing to do with it. Once A, B and C have successfully purchased the freehold Flat D will still be a leaseholder but will now have to pay charges to the other three flats...."
"... Shares: If you buy a Share of Freehold property you will also be buying shares in the freehold company, 25 Free Street Ltd in the example above. The shares will have been issued when the leaseholders bought out the freeholder. They may have simply split them equally (one third each in the example above) or unequally if there is a difference in floor space between the flats. To demonstrate this Flat A may be the top two floors at 25 Free Street while Flats B and C are only on one floor each. As such Flat A may get 50% of the shares and Flats B and C would get 25% each. While that is very nice for Flat A it would also mean that the owner would be responsible for 50% of the maintenance and repair..."
"... Length and Value: Despite being share of freehold the flats in the above example are still leaseholders. The difference is that they are leaseholders to a freehold company and each one of them owns a share of that company. This means that if the leases are starting to look short on years they can simply agree amongst themselves to grant each other a fifty year extension for say £1 each! As such lease length and value have little connection in a Share of Freehold..."
"... Changes to the Property: Many people confuse Share of Freehold with total freedom! Someone who owns a share of freehold is still a leaseholder and must get the permission of the "freeholder" before making any substantial or structural changes to their property. This means agreement from all those in the building who have a percentage stake in the freehold company. As such staying friendly with your neighbours is far more important in a share of freehold situation than if you are a leaseholder! Once again any agreed changes must be spelt out either in a new lease or in a deed of..."

"... was a structural part of the property. The Lease (Leasehold and Share of Freehold Only) - This comes from the vendor's solicitor and defines what the freeholder expects from you as a leaseholder. See Chapter 14: Viewing Properties and Making Offers Service Charge Accounts (Leasehold Only) -..."
"... to Assign (Leasehold Only) - for most purchases this is a formality. It is a document from the managing agents or freeholder saying they accept you as the new leaseholder. There are some blocks, however, where you will have to provide character references, proof of your financial status and sometimes even attend for an interview. They are rare and, more often than not, in the upmarket apartments of Mayfair and..."

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