For Freeholders and Landlords

A freeholder is the owner of a property and the land it stands on. Unlike leaseholders, who own a property for a set number of years through a lease agreement, a freeholder has indefinite ownership rights. Freeholders are responsible for the maintenance of the building’s structure, roof, and communal areas, especially in multi-unit properties like apartment buildings. They may lease individual units to leaseholders for a specified period, commonly 99, 125, or 999 years. The freeholder’s obligations and rights, as well as the leaseholders’ rights, are usually detailed in the lease document.

Freeholders have certain rights over leaseholders, primarily tied to managing and maintaining the building. They can collect ground rent and service charges, enforce lease terms, and handle repairs and maintenance of shared areas. They may also have a say in structural changes a leaseholder wants to make. However, their rights are bound by the lease terms and legislation, such as the Leasehold Reform Act. Freeholders cannot impose unreasonable terms and must follow strict legal processes when dealing with leaseholders.

Yes, but only if the lease terms allow for it. Many leases include provisions for ground rent increases at specific intervals, often linked to inflation or a set percentage. Recent legislation, like the Leasehold Reform (Ground Rent) Act 2022, has limited ground rent on new leases to a nominal “peppercorn” amount, effectively banning significant rent increases on new long leases in England and Wales. Existing leases, however, may still be subject to increases unless renegotiated.

Freeholders cannot unilaterally change the terms of a lease. Lease alterations require the leaseholder’s agreement, and in some cases, a formal lease variation agreement. Major changes, especially those affecting costs or property use, may also require the approval of a tribunal. Leaseholders have protections under UK law to prevent unfair modifications, and any changes must be reasonable and in the leaseholder’s best interest.

Yes, freeholders can refuse to sell the freehold if they do not wish to or if no legal obligation exists to do so. However, leaseholders often have a right to collectively purchase the freehold under the Right to Enfranchise. This process allows qualifying leaseholders to force the freeholder to sell, but it involves a legal process and specific criteria, such as having at least 50% of leaseholders willing to buy.

Evicting a leaseholder is highly uncommon and requires a legal process known as “forfeiture,” which can only occur if the leaseholder severely breaches the lease terms, such as failing to pay ground rent or service charges or engaging in prohibited activities. Even then, the freeholder must go to court, and the court will usually allow the leaseholder a chance to rectify the breach before eviction. Leaseholders in the UK have strong legal protections, making forfeiture rare and challenging to enforce.