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Leasehold

Leasehold is a form of property tenure that has existed for hundreds of years in England and Wales.

Simply put, leasehold ownership is a long tenancy with the right to occupation and use of the property for a long period – the “term” of the lease. This is commonly for either 99 or 125 years and the tenancy can be bought and sold during that term. The term is fixed at the beginning and, therefore, decreases in length year by year.

Leaseholders in blocks of flats own the right to live there, but the management of the block, including maintenance and insurance, normally remains in the hands of the person who owns the property out right, the “freeholder”. The lease usually makes provision for the costs of the freeholder, or their agent, in discharging these duties to be met in full by the leaseholders. These payments are known as service charges.

Leasehold has been subject to criticism over the years and a number of pieces of legislation have been introduced to give leaseholders certain rights. Outside of the legislation, the lease itself primarily sets out the contractual obligations and conditions of the two parties.