Freehold, Leasehold, and Commonhold

Leasehold and Freehold are types of property ownerships in England and Wales. It goes without saying, it’s extremely important to know the differences between the two when buying property.

Most of you will be familiar with the terms freehold and leasehold (although you may not necessarily know what they mean). “Flying Freehold” and “Commonhold” are other types of ownerships which you may not be aware of. They’re not as common, but you do come across them now and then.

Freehold Property

When purchasing a “freehold” property, you are buying the outright ownership of the property and the land on which it stands, and the entitlement to permanent residence for as long you wish.

As the “Freeholder”, you are entitled to make moderations to the property within restrictions of the law and planning restrictions. You may need permission to make structural changes, particularly with listed buildings (old buildings).

Most houses in England and Wales are sold freehold. Flats can be sold freehold, but very rarely, they’re usually leasehold. However, flats are increasingly becoming freehold because of a legistration that is making it easier for leaseholders to buy the freehold.

Flying Freehold
You may have heard of “flying freehold”, but never really known it’s meaning. A flying Freehold is the part of the freehold property which overhangs land which does not form part of that property freehold.

A common example of a flying freehold is a room situated above a shared passageway in a semi-detached house, or a balcony which extends over a neighbouring property.

Flying freeholds are quite common, but not many homeowners even realise they have a one. They’re are a bit of a grey area in the eyes of the law; they’re viewed as a title defect. Reason being, they typically don’t have rights of access to make repairs. For example, a balcony that overhangs onto someone else’s land may need some repair work, but in order to make the repairs, you may need position from the freeholder in order to get underneath the balcony and onto his/her land to make the necessary repairs.

For these reasons, it’s become notoriously difficult to get mortgage lenders to finance the purchase of a property that comprises a flying freehold situation.

Leasehold Property

If you buy a leasehold, you are actually buying the property for a set period of time, hence the “lease” Unlike a freehold, you won’t own the grounds the property stands on.

Most flats in England and Wales are leasehold. Most leasehold properties are subject to ground rent, which is payable to the freeholder. The ground rent will cover the costs for communal maintenance repairs.

The lease should stipulate how the service charge is worked out, and how it is divided between the other leaseholders. It’s important to calculate all these costs before committing to a leasehold property, as you may not have budgeted for the additional costs.

Once the set period in the lease expires, the ownership of the property is given back to the freeholder. Most leases are approximately 99 years. However, leases may be extended by agreement with the Freeholder at a specified cost. Leases of 999 years are becoming more and more common.

Commonhold Property

Commonhold is a relatively new idea; it was introduced at the end of 2004. Like leasehold properties, they’re typically found with flats and units.

Commonhold is pretty self-explanatory. A group of people mutually own, for example, a block of flats. There is no overall landlord. However, there is a freehold owner, and that is a company called a commonhold association. The owner of each flat is a member of the association (i.e if you buy a commonhold flat, you will be part of the association). The commonhold association is responsible for maintaining the communal areas of the building.

The advantages of commonhold are as follows: there is no set period of time to when you have to leave- you are one of the freeholders. All decisions regarding the building are made jointly by the property owners. There will be a standardisation of documentation which is the same throughout all commonhold properties- there will be no input from a dodgy landlord. And what appeals to people the most is that with commonhold, the property won’t lose value, unlike with leasehold properties that lose value as the period of the lease gets closer to its expiry date.

Leaseholders can convert to commonhold, but every leaseholder will have to buy the freehold together, and everyone in the building must agree to convert to commonhold.

Most strikingly, commonhold eradicates the concept of a lease and having a landlord. That’s what most appeals to buyers, and why it is favoured over leasehold.

56 Comments- join the conversation...

Showing 6 - 56 comments (out of 56)
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Lisa 23rd January, 2009 @ 18:57

My partner owns a leasehold flat and I am thinking of starting up my own catering business, using the kitchen in the flat to prepare buffets to be delivered to other locations. Would this type of business be acceptable on a leasehold?
Many thanks

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Richard 2nd February, 2009 @ 18:30

We own a chalet which is on a leasehod arrangement. However, it is a rolling one year lease. The Chalet field has been insitu for around 100 years without any issue. However, the landowner, a company, has decided to start closing down the renewal in favour of building new chalet in the next field... Is there anything that can be done to fight the owner and retain our chalet. (chalets in the field sell for £50k, so a massive investment is to be lost by the 50 or so chalet owners if this goes ahead - council planning are meeting on 4/2/09 anfd the planning officer is supporting the application.)
Hope you can help, thanks

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san 14th February, 2009 @ 11:35

I and my friend are going to buy a flat in London. Our solicitor recently found out the leaseholder is living/owing the ground floor flat. Our flat is 1st floor with loft conversion, but local council never issued a completion certificate. This is repossession property and the previous owner is a relative of leaseholder. My question is should we go ahead or is there any other issue we should know. Many thanks

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Ellie Blatchley 15th February, 2009 @ 15:53

I am in the process of buying a flat at the moment. We have been told by our solicitor that we have share of freehold AND a lease which we need to extend as it is only 80 years...
How does that work?

Thanks
Ellie, london

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derek 5th April, 2009 @ 20:15

i bought my flat just over 5 yrs ago and a friend told me i could buy the leas of my landlord whao can not refuse me is it possible for u to help me out on this question as i am intrested due to my new landlord trying to push this yrs price for the service charge up by almost 78%and i think i am beig ripped off by them

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peter mancini 14th April, 2009 @ 11:15

14th April 2009
Dear sir/madam

I live +21 others in freehold (Houses & Bungalows) properties on leasehold land.

Can we(all owners, 21),insist legally on purchasing the land our properties are on?

We currently pay the leasehold about £360 each for what is called the (Ground Rent Equivalent)

The small estate was built by Taylor-Woodrow about 1999/2000 for the elderly..on person at least must be 60years old..there is also a limtation on the 2nd person.

I trust you can assist

Yours sincerely
Peter Mancini

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Jane Ross 14th June, 2009 @ 21:45

Im about to buy a house cash but have just discovered it has a flying freehold. Does anyone know the implications of this why dont lenders like to lend on these properties? will it make it difficult to sell if the buyer needs a mortgage? Thankyou.

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Adrian Lucas 29th June, 2009 @ 17:15

I own a leasehold property (over 950 years left on the lease) and the leaseholder has offered to sell me the freehold. It's is a semi-detatched house, no maintainance agreement and an annual ground rent of £35. What sort of figure would be expected for such a freehold ? Any ideas apreciated :-}

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Jools 30th June, 2009 @ 11:30

Nominal sum - £300. Such a long time left on the lease not worth any more. Not going to be any issue for selling.

Jools

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Ann 2nd August, 2009 @ 17:28

We are putting an offer in to a terraced house (Freehold) - unknown to us before the viewing, there is a basement flat (Leasehold). Does anybody know whether the communal area (i.e. front gate) has to be maintained by the Freeholder, using the ground rent?
How about the outside stairs leading to the basement flat? Appreciate if somebody could explain these things - we are first time buyer and would like to avoid possible complication. Thanks!

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steve 8th August, 2009 @ 15:20

My freehold house has an entryway between myself and my neighbour,with a flying freehold over the top. My house has a bedroom over the rear of the entryway and my neighbour has a bedroom over the front of the entryway. There are gates at the front of the entry,opening onto the street. My neighbour insists that he owns the gates (we have identical rights of way over the entry itself, subject to each paying half for repairs) His deeds do not say that he owns the gates. I think that because he has the room at the front, over the gates, he assumes they are his. Would this be correct? Has anyone else had this experience?

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Alex 28th August, 2009 @ 14:26

Hi,

My mother lives in a house where the lease has expired. The solicitors who originally dealt with the lease no longer exist, and the person mentioned in the agreement can no longer be found, also she cannot remember ever paying anyone money for ground rent, which is just as well because she has paid all the maintenance fees for the 35+ years. Any advice would be greatly appreciated.

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Cynthia 29th August, 2009 @ 09:25

We are buying our property through the Social HomeBuy Scheme. We are purchasing 100% which has been approved by our Registered Social Landlord (RSL). We live in a 2 bed mid terraced house.

We have now been informed by our RSL that our purchase will be Leasehold and NOT FREEHOLD. Can they do this? This is not a flat, it is a house! We don't have any ground maintenance or service charges.

Any advice would be appreciated.

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Martin 2nd September, 2009 @ 12:49

Hi
We own a ground floor leasehold flat, which is slightly different from all the other flats in the estate as its one of the two that hasn't got a bay window. Now I decided to change my windows to double glazing but forgot to check with the management company if it was ok to change the design of the windows, as all the other bay windows have got fan lights (quarter openners) on either side of the bay. But as I don't have a bay window don't have any quarter opener, and this has led to poor ventilation in my flat. There's always condensation on the window especially during Winter. Anyway I got my windows changed in that the middle part of it which should be a full fixed glass, now has a top end that opens, and I have been told by the management company that i have to replace it. My lease aggrement does say that if i need to make any structural changes ( which to be honest I didn't think a window was really) i had to inform the directors and as long as it is reasonable they can't turn me down. Please can you advise me on what to do.

Thank you very much

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Jools 2nd September, 2009 @ 13:41

Did you check with the planning consent department/building control as well - probably not given that you did not check with the management company. Need permission to replace windows and you must have a FENSA certificate if you want to sell in the future.

Options are: replace windows or speak with management company and write a long Mea Culpa and see what they say.

Jools

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R I Horwell 19th October, 2009 @ 16:56

We are thinking of buying the Freehold of our property one of eight flats Six of which are owned privately two being rented by the present Freeholder we have along lease 188 years unlike the other owners who average approx 80 years what are the possible cost that will be incurred through Solicitors and Land Registry ? Would really appreciate Advice Etc

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geoff 8th December, 2009 @ 22:38

i bought a flat in 2007 with a absent free holder. in oct 2009 i was asked by the new free holder to pay my ground rent, but he has also demanded the ground rent for the two years prior to him taking over the free hold under the principle of "privity of contract" do i have to pay this ?

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Tanya Wolsey 4th January, 2010 @ 12:58

Hi there, I own the freehold to a house that is split into two flats,the tenant in the above flat is meant to pay me ground rent but has moved out years ago and has since made 2 attempts to rent out the flat. i have a new tenant above us who at first seemed ok but recently started becoming unsavoury, my freehold states that the "demise is not to be used as a means of business, only to be used as a private dwelling" do i have any grounds to have this new tenant removed?

many thanks

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kelvin 12th January, 2010 @ 19:21

i have bou0ght an house 10 years ago lease is 28 quid a year 70 year left on lease how much would it be to buy the lease thanks

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Citizenz 18th February, 2010 @ 12:32

I own two houses which have about 790 years left on 999 year leases. The freeholders have disappeared and no ground rent (38p per week) has been paid for years. I certainly have never paid any. My solicitor was unable to trace the freeholders when I purchased the properties. Can I apply after 10 years to become the freeholder?

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Anda Evans 18th February, 2010 @ 17:36

Tanya Wolsey

If you request CORRECTLY the payment of ground rent but the leaseholder fails to pay it, this could even lead to repossession.

Notice for payment of ground rent

The leaseholder is not liable to pay the ground rent unless the landlord has demanded it. The demand must be in the prescribed form and must specify:

* the amount of the rent due;
* the date on which the leaseholder is liable to pay it, or if the demand is sent after the due date, the date on which it would have been payable under the terms of the lease.

The date specified for payment must not be less than 30 days or more than 60 days after date of service of the Notice, or before it is meant to be paid in accordance with the lease. It may be sent by post to the address of the house or flat to which it relates, unless the leaseholder has previously notified the landlord of an alternative address.

The Notice of Demand must also include:

* the name of the leaseholder to whom the notice is given;
* the period for which the rent demanded relates;
* the name and address of the person or company to whom the payment is to be made;
* the name and address of the landlord (or agent if applicable) by whom the notice is given;
* certain supporting information, provided as notes to the Notice.

The landlord cannot begin any legal steps for recovery of the rent, including action for forfeiture and possession, unless he has previously served the demand in the correct format, given the correct period of notice, and the leaseholder has failed to respond.

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Citizenz 22nd February, 2010 @ 18:40

No ground rent has been requested and I have made enquiries about buying the freeholds. The lack of the whereabouts of the freeholder is preventing my right to buy the freeholds. I am hoping after 10 years to claim the freehold.

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JURATE 4th March, 2010 @ 13:55

I am a freeholder and my neighbours who are a leesholders and live upsters wanted to extend the flat by doing the room on the loft. Did they need my permission? did they need planning permission?

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Anders 17th March, 2010 @ 23:38

I have a leasehold flat with 75 years remaining on the leasehold. I pay a yearly ground rent of 50 pounds. I am thinking of buying the freehold or extending the leasehold. However, I have heard that it can be very expensive extending the leasehold, i.e. might even be cheaper to buy the freehold. Any thoughts on how much I should pay for the freehold if I was to buy it, might it be as easy as calculate the ground rent x 20 years e.g. freehold would be valued at 1,000 pounds?

Replies are much appreciated.

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Jon 1st April, 2010 @ 15:36

I am looking to but a 1st Floor freehold flat. I understand that it is very difficult to obtain a mortgage on a freehold flat, and as a result, very difficult to sell. Is it possible to buy it freehold, then sell the flat leasehold, keeping the freehold for myself? Is this a simple process?
Many thanks.

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Dgaidge 2nd April, 2010 @ 10:13

Hello

I own a leasehold flat and I am renting it. The lease holder of the building is not looking after the building at all and hasn't been for years. No maintenance, no management agency.

The gutters have been filled for years and I have told the landlords that it is causing mould in the flat (which had to be redecorated and will need to be redecorated again now, 2 years later).

I have had some water damage caused by a tenant which I have tried to claim on the building insurance, without any result.

I have contacted the landlord through his solicitor, in vain. I have sent a letter, I have employed a solicitor to communicate with the landlord. Nothing has succeded and I am still owed money and the building is not looked after which is very worrying.

I don't have the money to get a solicitor to pursue it. What are my options?! I heard sometimes the council looks after properties that are not looked after by their leaseholder, and then charge them.... is that the case?

Many thanks for your help.

D

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Hicks 25th April, 2010 @ 17:58

Hi,
i Have a property which I want to split and sell one of then as lease, do i need to inform my morgage company? Can I keepmy existing morgage? do you have any info that would help me on this.
Many Thanks

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Madeleine McDonald 28th April, 2010 @ 19:17

I have just put a offer in on a 3 bed house, just received memorandum from Estate agents to find out it is lease hold for 99 years, can anyone give me some advice on this. We love the house and still want it.

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Melvin 12th May, 2010 @ 08:40

I have been renting my apartment now for 8 years and have just been told by the freeholder that I need to pay £65 to get formal consent. I had getting approval from the Mortgage company on the basis I had to rent as I moved overseas. Do the freeholders always need to give consent ?

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Steve 25th May, 2010 @ 11:12

I too am having problems selling my flat which is an upstairs flat and freehold, Can I sell it as leasehold and remain the freeholder? It is not a flying freehold and we have a lease with the tenants downstairs. Is it easy to convert to commonhold?

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sammie82 27th July, 2010 @ 13:16

We have a 1900's converted house, into 2 flats, which me and the ground floor owner share the freehold of. The downstairs owner leases his flat and lives away from the area. His new tenants are very unsavory, inconsiderate and a right nuisence. I wonder if I have any rights over the eviction of this tenant? I would like to find out first before I call the other leasholder to make a complaint.

Many Thanks,
Sam

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Gemma 9th August, 2010 @ 17:49

re: jeff wrote this on 2009-01-22 18:54:44

This is a reply to Jeff who wants to buy the council flat and has tenant who is barely there...

I am in the same position- did you get a reply or find anyhing out?

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Alison 15th September, 2010 @ 15:36

My husband and I bought a Basement share freehold flat in March 2010, we just had a sharehold meeting and found out the existing fire escape stairs had been seriously damage and it need to be replaced with a new one. The total cost of installing a new fire escape stairs is about £40k, the cost will be spilt equally between six of the share freehold owners. Also, we will have to raise fund to repair the roof means we will have to pay £80 extra on top of the monthly management fee. We feel like we have walked into a trap and feel unfair of not knowing the fact for this high maintence cost for the building before we bought the flat. We don't even use the fire escape , its just too mucy for us to pay. Is there anything we can do to avoid the cost, please could you advice? Thank you! Alison

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Pat 30th September, 2010 @ 16:07

I live in a block of 55 leasehold apartments which are about 2 years old and have over 100 years left on the lease. The builder is the current freeholder and one of his employees is acting as the managing agent. The builder wants to sell the freehold and some of the residents are considering buying it. If we bought the freehold would we own the building as well as the grounds? Also would you recommend us to do so or is it better to set up an RTM? What would be a reasonable price for the freehold? As you can guess we are learners at this game and would be grateful for any advice that you can provide.

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Mark 8th December, 2010 @ 17:19

Hi, We own a flat (with a buy to let mortgage) and have 68 years left on the lease. The flat is worth approx £170,000 and rental value is £750 per month - we want to extend the lease but have been told we need to pay £650 for a valuation from the freeholders management ? They wont give me a very approximate idea of how much it will cost to extend the lease or an idea of the calculation so we can get an idea if its affordable - is this right ? The flat is half a house, I wondered if we get together with the flat upstairs do we have a right to buy the freehold. - Many thanks for any advice!

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jenni 22nd January, 2011 @ 22:13

i've paid my mortgage off on a leasehold property, and it now shows on the deed as changed to freehold. But i've just looked on the form and it's on the leasehold list. What does that mean ? Does it mean that I don't own the land and it's still classed as leasehold ? i;m very confused....

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Julie 1st February, 2011 @ 16:31

We live in a ground floor Victorian house that has been split into two flats. We have a lease for our property and we have also brought a share of the freehold. Who would be responsible for the maintenance of the roof? Our lease said we are not, but the other owners are saying we are both responsible as we are part freeholders. Can you please help?

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ujjwal 2nd February, 2011 @ 08:23

i want to do the property the freehold what document will required it

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david 25th March, 2011 @ 19:48

I am in the process of buying a detatched property which was listed as freehold.But to discover it is leasehold,the property has a lease of 950 years left and a ground rent of £17.50 per year.Can anyone tell me the price to buy the freehold.

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rahul gujral 26th April, 2011 @ 16:21

we live in an independent flat in malviya nagar area in new delhi there are 5 floor in the building and ours is first floor, the whole building is a leasehold property i want to convert my first floor to freehold so that i can sell it easily but i have heard that flat wise freehold cannot be done it will be applied only to the whole building? is it true or what can i do as i dont think my other flat owners in the building will contribute to get the whole building to freehold..please help

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rasopariso 1st May, 2011 @ 17:41

i want to ask here.
what is the restriction of freehold and leasehold property?
hope anybody can answer it.

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Elaine 25th May, 2011 @ 18:41

We live in a leasehold flat and our landlord has written to us asking if we are interested in taking over the lease and I assume the property becoming a freehold.

They have offered £15,000 but have stipulated that the agreement means that any arrears on the rent of the property and associated interest would need to be split between the tenants.

Logic would suggest that if we wanted to buy the lease out it would cost us. There are 24 flats so I'm not sure of the £15,000 is split or for each flat.

Any guidance and advice would be greatly appreciated.

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totaleclipse. 13th July, 2011 @ 21:17

help,I have a ground floor leasehold flat, and the freeholder wants £7,500.00 for mine and upstairs I can not afford both but we are willing to go halves so we can keep it between us, is this a good idea, We have 75yrs left on lease, but im not sure whether to borrow the money or let someone else buy it, i thought freehold properties were easier to sell but reading on line im not so sure now, please advise me. thankyou.

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Emily 19th July, 2011 @ 01:56

Can you buy a freehold for a nominal fee? I have agreed a purchase of a flat which include the freehold of the entire building. I have been advised that the best course of action is to by the flat on leasehold and the freehold seperately. Can the freehold be sold on a nominal fee or does it have to be linked to marker value?

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David 14th August, 2011 @ 02:11

We have a leasehold property on the Ground floor. We want to build a basement underneath and extend our flat. Does the freeholder own the land underneath our flat. Can he stop the basement extension, even though the local authority planners have agreed in principal

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Antonello Romano 29th August, 2011 @ 15:30

Hi,

I live in a block of 53 flats and 52 of us purchased the freehold together. Is there any legal way of obliging the only leaseholder to purchase his share. Collecting the ground rent from just one person is such a problem. Plus we feel like he's taking advantage of us owning the freehold. We can save money by selecting a competitive managing agent and he is taking all the ebnefit without having to pay for his share.

Many thanks,

Antonello

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tim 5th April, 2012 @ 16:23

Hi

i have been trying to find a straight forwad answer, i own 2 maisonette flats, one above the other, freehold... adjoining are 2 the same.... free hold which i dont own, i would like to turn my flats to a leasehold.... is this possible? thanks tim

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Aileen 21st April, 2012 @ 17:28

Hi we are considering buying a flat in a old villa that's been made into several flats, the one we are interested in is a ground floor re tenure the estate agents info states ..we are advised that the tenure of this flat is freehold subject to responsibilities relating to the other flats and shared areas.Please note that there is currently no agreement with other owners to convert the property to leasehold units.
So are we basically responsible for pretty much any problems from roof to electricals ? Also noticed cracks in outside Walls if this turned out to be serious structural issue would we be responsible to put right for all the properties? What do you think?
Thanks

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Jesus 2nd September, 2012 @ 13:58

I am wanting to know how to jump head first into the real estate market and get my feet wet while still making money. I do not have any experience what so ever, just a real urge to get into this market! I want to take classes but, I really don't know what I need to take 1st and I want to start on my associates degree as a at-home work study but, I'm not sure what employers are looking for as far as education in the real estate world other than Business Admin. I hope there are some real estate guru's on here to help a sista out! Thank you in advance!.

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Kevin 6th September, 2014 @ 15:13

I am interested in buying a flat (maisonette) from an auction.I will be refurbishing the flat and putting it back on the market after 4-6 weeks. How does the lease transfer work? Are there extra charges when the lease is transferred twice in the space of a few weeks? Are these any other pitfalls to watch out?

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