The problem(s) with leaseholdPosted: April 13, 2017 Filed under: Home ownership, Housebuilding, Leasehold, Legal | Tags: Commonhold Leave a comment
Originally published on April 13 on my blog for Inside Housing.
Question: When is a home owner not really a home owner? Answer: When they are a leaseholder.
Leaseholders have the responsibilities of being an owner without having all of the rights. They own the bricks and mortar* of the homes they are living in – but only for the length of their lease – and they do not own the land it is built on.
They pay a mortgage but they also pay ground rent to the freeholder and a service charge for maintenance carried out by companies over whom they may have no control. They may see themselves as owners but in the eyes of the law they are tenants.
The issue has come to a head recently with the scandal of developers selling leasehold new houses and then selling on the freehold for a profit. Unwitting buyers have found themselves facing bills for ground rent that double every 10 years and an escalating bill for buying the freehold.