When you are buying a second-hand property, one of the details your solicitor will ask the vendor's (seller's) solicitor is if the property is Leasehold or Freehold. But what's the difference and why do you need to know?
We'll get into more detail further down, but in a nutshell;
Freehold = The land the property is built on is owned by the property owner.
Leasehold = The land the property built on is owned by a "ground landlord" to who you will be liable to pay rent.
Who is a "Ground Landlord"
The ground landlord could be any number of people. A local authority, an absentee or foreign landlord, or if the property was built before 1978 a property developer.
They essentially own the land on which the property was built, but whoever built the property never purchased the land. Instead, anyone living in that property would pay annual rent to the Ground Landlord.
Most leaseholds are in place for hundreds of years and the annual rent can be as low as a few euro.
Can you buy a house with a leasehold?
Simply put, yes! In the vast majority of cases, there will be no issues when buying a home that is leasehold. In these cases, you will simply become the person liable to pay the ground landlord rent.
If there are less than 70 years left on the leasehold, some banks may not allow drawdown until the freehold is purchased by the existing owner. Your solicitor would look after this matter if it arose.
Can you buy the freehold on your house?
Yes! The Ground Rent Purchase Scheme facilitates the purchasing of freehold for home owners.
They charge a fee for handling the transaction.
I'm buying a property, how can I check the leasehold status?
It is the responsibility of your solicitor to do all due diligence relate leasehold status of the property. However, you can check this yourself easily by going to LandDirect.ie
What about Apartments?
All apartments are considered Leasehold.
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