When purchasing property in the US real estate sector, it is important to know about leasehold vs freehold property. The definitions state the type of ownership you have on a property and can have a major impact on your responsibilities, rights, and long-term investment. We help clients navigate property ownership decisions at Najla Law Firm. Below is the process.
What is Freehold Property?
Freehold title is the most prevalent form of property ownership employed in the US. Under freehold property ownership, you own the ground and buildings placed thereon forever. You are vested with the privilege of using, modifying, or selling the land as one would wish under freehold ownership subject to local laws and regulations. Freehold real property is purchased for its dependability and lack of periodic lease rent.
What is Leasehold Property?
Leasehold property, however, signifies the right to occupy a property for some period of time, as mentioned under a lease agreement between you and the freeholder (property owner). Leasehold is applicable in urban centers, e.g., condominiums or apartments. Although you possess the right to occupy the property for the lease duration, you are not the landowner. Upon lease termination, freehold typically returns to the freeholder unless the lease is extended.
Most important differences and issues
- Ownership Period: Freehold is for all time but leasehold is temporary and subject to terms of the lease.
- Cost Implications: Freehold property would cost more to buy but cheaper to maintain in the long run since it does not entail yearly ground rent and maintenance charges.
- Control and Flexibility: Freehold property owners are in complete control of their property, while leasehold owners can be restricted by the freeholder.
- Resale Value: Freehold properties will always retain more resale value because of their permanent nature, while leasehold properties will depreciate in value as the remaining term on the lease decreases.
Why Legal Advice Is Important
Priorities that your obligation and rights regarding the property take priority in what needs to be understood at Najla Law Firm are. The sale of the freehold or leasehold, our specialists will help you go over contracts thoroughly, negotiate and protect your investment.
For even more expert assistance regarding real property law, call on Najla Law Firm now. We are here to guide you through to make the proper decisions for property ownership.
