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Buying freehold on a long lease.

My parents own a property with a very long lease - 950 years remaining. They pay a peppercorn rent of £3pa. Is there any value at all in buying the freehold?

Asked on Jan 27 2013, General in Manchester | Report content

Answers (1)

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  • Probably not, if it is even possible for them to buy the Freehold, a leasehold is an estate in land and makes the Property as much theirs (in ownership terms) as holding the Freehold does. The reason Properties are sold as a long leasehold (usually 250 or 999 years) is to place certain obligations (covenants) on the leaseholder to perform certain obligations (pay service charge, not to short term sub lease etc) and are typically (but not exclusively) used in apartment buildings or where there are multiple dwellings in a single buildings. In either of those scenarios, your parents will not be able to purchase the freehold as the freehold covers the entire premises (and will probably be owned by am SPV controlled by a residents committee). Notwithstanding the above, should your parents own the leasehold to a property that is exclusively theirs, you may be able to purchase it and merge the two titles (you would determine (surrender) the leasehold title). You may have to consider the registration of any easements affecting the leasehold title which you may want to continue to benefit from (although they are still enforceable even if unregistered). All in all, it seems a lot of unnecessary work for no real benefit.

    Answered on Jun 22 2013, Report content

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