Understanding Freehold and Leasehold
There are three ways you can own your property:
- Leasehold with a share of the freehold
A freeholder owns the property outright. There is no lease, no landlord and no need to pay ground rent or service charges.
Leaseholders with a share of the freehold, take on certain financial and property maintenance responsibilities. They need to set up a resident management company (RMC). They own the property and the land it is built on for the length of the lease.
When buying a leasehold property, you will be required to pay service charges, management fees, ground rents, and related costs to a Managing Agent like Parallel Property Management in return for arranging essential services and maintenance contracts for the property and equipment within the property.
What is the difference between a Landlord and a Managing Agent?
In simple terms, Landlords own property while a Managing Agent or Property Manager is instructed by a property owner to supervise and manage properties.
- Your Landlord (Freeholder) owns the land that your property sits on. This could be an individual or a company.
- The Landlord is responsible for maintaining the communal areas. They normally instruct a Managing Agent to do this on their behalf.
- Your Managing Agent is instructed through a formal arrangement known as a Management Agreement.
LEASE (The Leasehold Advisory Service)
We recommend The Leasehold Advisory Service if you are looking for FREE consumer advice on the law affecting residential leasehold and common hold property in England and Wales. It is totally independent and is funded by the Government.