What does 'share of freehold' mean?

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Buying and Selling Property » Frequently Asked Questions » What does 'share of freehold' mean?

Frequently Asked Question - What does 'share of freehold' mean?

A lot of flats are promoted as having a 'share of freehold'. This doesn't usually signify that the flat itself has freehold title; there will still be a rent and the covenants contained in it will have to be adhering to. Actually what it will perhaps mean is that the freehold on which the block stands is owned by a limited company and the shareholders of that limited company are the owners of the flats in the block. If you see that that is the reason and it's reasonably common that the purchaser must make sure that the vendor transfers his share in the limited company to the purchaser on completion of the sale of the property.

Leaseholders who own the freehold of the block through the means of a limited company have more autonomy to come to an agreement with the flat because if they don't like the lease, they have the option to modify it. Even though the flat you are thinking of buying does come with share of freehold, changing the lease may not be very easy because you will not be able to take action alone and agreement with your new neighbours would still be a requisite.


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