Freehold, Leasehold, Commonhold—The Differences Explained

Freehold, Leasehold, Commonhold are all types of ownership and land tenure, which differ in the manner of how a property, land and or buildings, are owned, held, possessed, or used.

FREEHOLD is a type of ownership, where the freehold owner (freeholder) owns a real property, which comprises land, and (if) any immovable structures to it owned by the owner. These immobile structures can be buildings, machinery, infrastructure, and other man-made structures, as well as plantation. The freehold lasts indeterminately, and perpetually. The freeholder has a responsibility of maintaining the property, as well as the right to alter it. Freehold ownership is common for most houses.

LEASEHOLD is a type of ownership, where the leasehold owner (leaseholder) purchases the right to use the property, the land or the building/s, while the freehold owner (freeholder) retains ownership of the land. Therefore, the leaseholder is required to pay ground rent and service charges. The leasehold is a form of land or property tenure, and the leaseholder is a type of tenant. The leasehold lasts for a determined, fixed period of time. When the lease term expires, the ownership, or the right to use the property, is transferred back to the freeholder. The lease agreement is the legal document that sets the lenght of lease, the terms and conditions of leasehold, as well as the rights and responsibilities, incl. maintaining, of the freeholder and leaseholder. In order to alter the property, the leaseholder usually needs to acquire permission from the freeholder. Leasehold ownership is common for most flats.

COMMONHOLD is a type of ownership, where the commonhold owner (commonholder) owns, or has a freehold ownership of property as part of an estate. Thus, the owner owns the property itself, and can own the common parts within the estate. Each owner is responsible for maintaining their own propery, as well as the common part of the eastate, which usually is managed with the means of a commonhold association by the commonholders. The commonhold lasts indeterminately, as opposed to leasehold. It is a type of freehold with shared ownership of the common parts. Commonhold ownership is usual for flats, although it is not as widespread as leasehold.

Other types of ownership include/can be as follows.

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