Do you already own a leasehold property or are you thinking about buying one? You might be wondering what happens when the leasehold expires on a property.
Do you already own a leasehold property or are you thinking about buying one? You might be wondering what happens when the leasehold expires on a property. It’s important to be aware of the difference between leasehold and freehold property, and the advantages and pitfalls of each so that you can make an informed decision about your purchase.
In this guide we’ve answered all your questions about what happens when a leasehold expires. We’ll explain what a leasehold is, and how to find out how long is remaining on your lease. We talk about what happens when your leasehold expires, and how you can extend it to prevent that from happening. We’ll also talk about the cost of leasehold extension. Finally we’ll walk you through the advantages and disadvantages of leasehold property and talk about some of the ways that you can sell a property with a short lease.
Looking for the answer to something specific, like how you can extend your leasehold? Or what happens if a leasehold expires? Use the menu below to navigate through the article quickly. If you want to become a leasehold expert though, read on for our entire guide!
There are many types of UK property. Properties in the UK are either leasehold or freehold.
In short, a freehold property is one where the ‘freeholder’ owns both the land that a property is built on, and the property itself. A leasehold property is one where the ‘leaseholder’ owns only the property that the land is built on. They don’t own the title that the property is built on, and they essentially rent this from the freeholder.
So, by having a leasehold property you essentially still have a landlord. You will likely pay what is known as ‘ground rent’ as the lease on the land that the property is built on. It’s also possible that you will pay a ‘service charge’, which is basically a maintenance charge to ensure the good upkeep of the building.
This confuses some people because of the fact that they have a mortgage on a leasehold property. Your house repayments for your mortgage are in addition to the charges you may pay for ground rent and service charges, and not part of them. It’s no wonder that so many people find themselves wondering what exactly will happen if the leasehold expires.
In the UK, the general rule is that flats are leasehold properties and houses tend to be freehold properties. Flats tend to be leaseholds because they formalise an arrangement between many residents on a shared piece of land. They help to divide the responsibility for the good upkeep and repair of the property between many residents. Typically the freeholder is a management company who charges the leaseholders a service charge and takes responsibility for this upkeep.
If you own a leasehold property you might be concerned about the length of the lease remaining. There are a few different ways to find out how long is left on a leasehold. The first port of call is the Land Registry. For a small fee (£7) you can download a copy of the Title Deeds. This gives a clear indication of how long is left on the lease.
If you’re thinking about buying a leasehold property the process is even more straightforward. The estate agent will typically advertise the property on online portals such as Rightmove and Zoopla with the remaining lease clearly displayed. If it’s not, they’ll be able to answer questions you have about the amount of time left on the lease if you enquire directly. The length of time remaining on the lease will also come up during the conveyancing process. So there are a number of ways you can find out how long is left on the lease, both as a buyer and an owner/seller of leasehold property.
Leaseholds rarely expire. But when a leasehold does expire then the property and the land it is built on reverts to the freeholder. This means that you no longer have the right to live in the leasehold property, and the lease and freehold become one, instead of separate interests in land.
If the freeholder wishes to serve you notice to vacate the property then they can. You must follow the terms of this notice as it is a legal requirement. If they decide not to serve you notice to vacate the property, then you may wish to extend your leasehold to continue living there.
Remember, it’s possible for your leasehold to expire even if you have finished repaying mortgage payments on a leasehold property. This is why it’s so crucial to stay on top of the amount of lease remaining on your property, and extend it as early as possible so that you don’t lose legal claim to the property.
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