Do you want to invest in a particular property? If yes, what form of proprietorship is it under? In most cases, potential buyers don't have a clue of the type of arrangement pertaining to property ownership. However, a professional conveyancer can assist a property buyer understand the kind of property he or she intends to acquire. This article explains the various classifications of property ownership that buyers are subject to when they buy properties.
Freehold property is defined as a property which is free from hold of any individual or organization apart from the owner. Thus, the owner of such land or property enjoys free possession for permanence and may use the property for any activities however in accord with the local regulations. Ownership is transferred from one individual to another through exchange of legal documents, or by the laws governing intestate succession.
Leasehold means that a buyer acquires a lease from the owner of a freehold property, also known as the landlord to use the land or property for a given duration. Typically, the leaseholder enters into an agreement with the freeholder, agreeing on the legal rights and duties of either side. Leaseholders are expected to cater for maintenance costs, yearly service charges as well as their share of the property insurance. In case the leaseholder wishes to carry out major renovations or upgrades to the building, then they must obtain permission from the freeholder. In the event that the leaseholder fails to adhere to the terms of the lease, for example, failing to pay the fees, then the tenancy contract may become forfeit.
Tenancy in common
Tenancy in common permits two or more investors ownership interests in a particular property. Every owner is entitled to leave his or her share of the property to their chosen beneficiary upon their demise. Although tenants in common cannot claim ownership to a specific section of a property, each may have different ownership proportion. For instance, Debbie and Sarah may each own twenty five percent of a property, while David owns fifty percent.
This type of property ownership involves two or more individuals owning or leasing a property together, with each one of them having equivalent rights and obligations, until one owner passes away. Following an owner's demise, that owner's proportion in the property is passed on to the survivors which eliminates the need for the property to go through the probate process.
Often, many people don't understand the contrasts and ramifications of the different form of property ownership until it's very late. Consult a professional conveyancer to help you understand what you're getting yourself into beforehand.