A share of freehold is an arrangement where the freehold of a property is jointly owned by the owners or held by a company owned by the leaseholders. This means that the owners have more control over the property, including the maintenance charges and the lease extension. This can be a good option for those who want more control over the property and its communal responsibilities.
However, it is important to note that purchasing a share of the freehold does not give complete autonomy over the property or lease. Any changes or extensions must still be agreed upon with the other shareholders. This means that you will need to work with the other owners to make any changes, which can sometimes be time-consuming and difficult.
The concept of a share of freehold provides a clear definition of obligations between the leaseholder and the freeholder. This helps to ensure that all communal responsibilities are taken care of and that the property is maintained to a high standard. By having the responsibilities clearly defined, any property sale can proceed smoothly and without any issues.
One of the most significant benefits of owning a share of freehold is the greater control it gives you over the property. This means that you can have more say in the maintenance charges, for example, and ensure that the property is well looked after. Additionally, you can extend the lease at a lower cost, potentially saving you thousands of pounds in the long run.
However, there are also some disadvantages to owning a share of freehold. Obtaining signatures from all owners for a freehold transfer during a sale can be time-consuming and difficult. Additionally, owners must also handle the administration of the company holding the freehold, including tax returns and accounting, or face penalties and fines. Property insurance and the premium collected annually from each owner must also be in place.
In conclusion, a share of freehold can be a good option for those who want more control over their property and its communal responsibilities. However, it is important to weigh the advantages and disadvantages before making a decision and to make sure you understand what is involved in owning a share of freehold.