Freehold property and leasehold property are terms used to describe different types of property ownership of real estate. These terms refer to the rights and duration of ownership that an individual or entity holds over a property. Here’s a brief explanation of each:
Freehold Property:
Freehold property refers to property ownership in which the owner has complete. Also, Freehold property has indefinite ownership rights over both the land and any buildings or structures on it. In a Freehold property arrangement, the owner has the right to use, occupy, sell, and lease. Also, transfer the property as they see fit, subject to any local laws or regulations. Essentially, the owner has full control and ownership rights without a predetermined expiration date.
Leasehold Property:
Leasehold property, on the other hand, involves the ownership of a property for a specified period of time, as outlined in a lease agreement. In a leasehold arrangement, the owner of the property grants another party the right to use and occupy the property for a set duration, which can vary from a few years to several decades.
Leasehold ownership typically involves payment of a periodic rent to the lessor. At the end of the lease term, ownership of the property reverts back to the lessor, unless the lease is renewed or extended. Leasehold properties are often subject to certain terms and conditions outlined in the lease agreement, including restrictions on modifications and usage.
In many cases, leasehold properties can be bought or sold, with the new buyer assuming the remaining lease term. However, potential buyers should carefully review the terms of the lease and understand the implications of leasehold ownership before making a purchase.
The distinction between freehold and leasehold ownership is important when considering real estate transactions, as it affects the rights, responsibilities, and duration of ownership associated with a property.
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