What does owning a share of freehold entail?

These are some of the problems which are regularly encountered by share of freehold owner:

  • Owning a share of freehold property is often cheaper than owning a leasehold property. It is unusual to have to pay ground rent and lease extensions are often cheaper. Many share of freeholders appreciate being able to control where communal funds are spent and savings can be made when employing cleaners, gardeners, contractors etc.

  • In owning a flat with a ‘share of the freehold’ you still have a leasehold flat, but you will also either;

    • own the freehold jointly with the owners of the other flats in the building – this is common when there are no more than four flats in a block, or

    • be a member or shareholder of a company which owns the freehold title – this is usual where there are more than four flats in a block.

  • There will be a separate leasehold title for the flat, so your Conveyancing Solicitor will have to complete the transfer of the leasehold title as well as a transfer of the freehold title or a transfer of a share in the company.

  • You have to pay service charges such as heating and lighting of shared entrances and stairways. Flat-owners may elect to appoint a professional management company to provide day-to-day management of the building, and they will collect service charges in the same way as for a commercially managed building. However having a share should give a leaseholder a greater say in how the management is carried out.

  • With smaller buildings, where each flat-owner has a share in the freehold title, it can be difficult to get necessary building repairs carried out.

  • Buildings insurance should preferably be arranged on the block as a whole, with each owner paying a share of the premium. If this is not done it can lead to each owner making their own arrangements (or not) – a recipe for disaster if the building is severely damaged and requires major repairs or rebuilding.

  • If the freehold title is in the joint names of the seller and the other flat-owners, the seller will have to get all those owners to sign a transfer deed. This is necessary so that the change in ownership can be registered at the land registry. You will have the same problem when you want to sell.

  • If your lease term is less than 70 years, you will still need to arrange for a lease extension – although you normally do not have to pay any premium you will still have to get the other owners to agree to sign the necessary documents, and pay legal costs.


If you are considering buying a share of freehold property, get in touch with us to discuss any issues or concerns or for a quote for the legal work involved property@olaleslie.com or call 02071830084