Share of freehold
“Don’t put off until tomorrow what you can do today.” – Benjamin Franklin
If the flats in your building each benefit from a share in the company that holds the freehold, it is often said that the Property is “share of freehold” as opposed to leasehold or freehold. However, this is just a term used to describe a leasehold property that also includes a share in the company that owns the freehold.
It is important to realise that a share of freehold in this sense is not the same as owning the freehold of your own house.
You must remember that at all times, as a tenant, you are bound by the terms and conditions of the Lease.
Short lease still needs to be extended even if you have share of freehold
Similarly, it is important to ensure that the lease length remains attractive to the market. The fact that you own a share in the freehold company will not compensate for the fact of a short lease. You must be particularly wary of this in circumstances where all of the tenants are given the opportunity to extend their leases, but you turn this opportunity down.
Generally, a share in the freehold is considered to be a positive asset to a leasehold property. However, it is very important that all the leaseholders know that it is the combination of the extension of the lease to 999 years and the issue of the share which is typically referred to as having a ‘share of freehold’. The lease extension is, however, the main factor, as this retains the value of your flat.
If you need advice on share of freehold or lease extension issues, please do get in contact.