Freehold
You own the property and land outright
If you live in the property yourself, you'll be responsible for its upkeep. If you lease it out however, your freeholder responsibilities may include (but not be limited to);
Maintenance for structural aspects of the building
Upkeep of any communal areas
Managing pest control if necessary
Managing utility supplies (power etc) of any communal areas
Depending on the context, you may need provision for insurance of the building
Collecting any fees agreed with leaseholders (ground rent, service charges)
Leasehold
You own the property for a set period, but not the land it's built on
Your responsibilities as a leaseholder will be outlined in your lease agreement. They may include (but not be limited to);
Your responsibilities for upkeep of the property
Any costs you'll need to pay the freeholder, such as ground rent and service charge
Any specific rules, such as no pets or not being allowed to rent out the property
There may be terms that don’t allow structural changes, such as extensions
You'll be responsible for insuring the contents of your property (if you choose to)
Leaseholds in Scotland
Leaseholds are rare in Scotland and flats are usually sold on a similar basis to commonhold properties in the UK. A flat owner owns their own freehold but the communal areas are looked after by a 'factor' – a company to which flat owners pay a fee.
How does a leasehold work?
With a leasehold property, you’re purchasing the lease of the property from the freeholder. This gives the purchaser the right to live in the property for a set number of years.
Share of freehold is a shared ownership of the freehold title. There are two types of share of freehold:
Up to 4 owners can share the freehold in their personal names.
A company is set up and owns the freehold but allows flat owners to own a share in the company. This can also be known as a membership.
What is a flying freehold?
This is where part of the property overhangs or lies beneath another person’s property. Some examples include balconies overhanging neighbours, basements that sit underneath a neighbour’s property or passageways.
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