What is a 'share of freehold'?
There are two basic set ups for the ownership of the freehold, the first is that the freehold is owned jointly by a number (up to four) of the flat owners in their personal names and the second is where a company is the owner of the freehold and each of the tenants hold a share or membership in that company. Therefore when you obtain a share in the freehold your name will either be noted on the title deeds or you will be issued a share in the company that owns the freehold. In either case, you will then own a share in the freehold.
What is freehold?
If you own the freehold, it means that you own the building and the land it stands on outright, in perpetuity. It is your name in the land registry as “freeholder”, owning the “title absolute”. Freehold is pretty much always the preferred option. You won’t have to pay annual ground rent. You don’t have a freeholder either failing to maintain the building. You have responsibility for maintaining the fabric of the building – the roof and the outside walls Whole houses are normally sold freehold.
What is leasehold?
Leasehold means that you just have a lease from the freeholder (sometimes called the landlord) to use the home for a number of years. The leases are usually long term – often 90 years or 120 years but as high as 999 years – but can be short, such as 40 years. A leaseholder has a contract with the freeholder, which sets down the legal rights and responsibilities of either side The freeholder will normally be responsible for maintaining the common parts of the building, such as the entrance hall and staircase, as well as the exterior walls and roof. However, other leaseholders might have claimed their “right to manage”, in which case it is their responsibility. Leaseholders will have to pay maintenance fees, annual service charges and their share of the buildings insurance. Leaseholders normally pay an annual “ground rent” to the freeholder. Leaseholders will have to obtain permission for any majors works done to the property. Leaseholders may face other restrictions, such as not owning pets or subletting. If leaseholders don’t fulfil the terms of the lease – for example, by not paying the fees – then the lease can become forfeit.
What are EPCs?
Much like the multi-coloured sticker on new appliances, EPCs tell you how energy efficient a building is and give it a rating from A (very efficient) to G (inefficient). EPCs let the person who will use the building know how costly it will be to heat and light, and what its carbon dioxide emissions are likely to be.
The EPC will also state what the energy-efficiency rating could be if improvements are made, and highlights cost-effective ways to achieve a better rating. Even if you rent your home, some improvements noted on the EPC may be worth implementing, such as switching to more energy-efficient light bulbs.
EPCs are valid for 10 years from when issued.