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Freehold = license to print money
Maexchen
Posts: 10 Forumite
Sorry, not 100% money related but this forum seems to be full of knowledge. As a disclaimer: I grew up in Germany so I’m not fully familiar with the UK market.
My question is: what are the financial obligations of a freeholder? It seems like he is “organising” a lot of things but not actually paying for anything, am I wrong? I.e. it his responsibility to keep the general structure in good shape but he can reclaim all the costs from the leaseholders. And then gets a nice sum of money when they extend the lease. Does he have to pay a share of the repairs or can he really claim 100% back from the leaseholders?
My question is: what are the financial obligations of a freeholder? It seems like he is “organising” a lot of things but not actually paying for anything, am I wrong? I.e. it his responsibility to keep the general structure in good shape but he can reclaim all the costs from the leaseholders. And then gets a nice sum of money when they extend the lease. Does he have to pay a share of the repairs or can he really claim 100% back from the leaseholders?
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Comments
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What do the terms of your lease state?0
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I don’t have a lease (yet) I’m asking more general. I0
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The freeholder owns the land on which a leasehold property is built.
The lease determines the rights and obligations of both the freeholder and the leaseholder.
Being realistic, the freeholder should/is never going to own the property on their land; so their income from their land is restricted to ground rent and lease extensions.
Should the freeholder pay for the upkeep of a leasehold building from which they derive no benefit? Maybe yes, maybe no. Your call...!I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Th extremes here are a 999 year lease granted on a house in 1910 with a non-increasing ground rent of £15pa and a 99 year lease on a flat with escalators built-in to the ground rent and service charges.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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