Leasehold is essentially a long term rental agreement (the lease) - typically between 99 and 999 years. If the lease is not extended then it will ultimately expire.
Short leases, where the lease has not been extended, are not uncommon.
The conveyancing solicitor will investigate the terms of the lease during the conveyancing process.
The lease is issued by the freeholder (also referred to as the landlord) for the fixed period, after which the right to use the property reverts to the freeholder.
- The leaseholder will usually pay a service charge to the freeholder or the freeholder's managing agent. The service charge covers the upkeep and maintenance of the grounds and common parts e.g. communal hallways, lifts, roof etc.
- The leaseholder may also pay ground rent to the freeholder.
- The leaseholder does not actually own the property - only the right to use it.
- Under certain conditions leaseholders have various rights including the right to extend the lease or acquire the freehold.
- If the leaseholder does not abide by the terms of the lease, the lease could become forfeit and the leaseholder could be evicted.
- The leaseholder will usually have to obtain permission from the freeholder before making any alterations to the property,
The leaseholder may also have a share of freehold.
See also: Freehold
Gaynor Haliday, Legal researcher
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Gaynor Haliday is an experienced legal researcher and published author. She has had numerous articles published in the press and is a legal industry commentator.