Advantages and disadvantages of owning leasehold property

There are many reasons people choose to sell their house in leasehold, as opposed to freehold. This article provides information on benefits over and drawbacks for leaseholds.

One reason could be the fact that there is an large market for leasehold property as there are many individuals seeking properties for lease on a short-term basis. Additionally, when a property is part of a larger building or property that is part of a larger building, every unit within the building is owned under lease instead of freehold. This is applicable to commercial as well as residential buildings like offices, office suites and so on. In certain areas that are located in Wales and England and Wales, particularly those with a lengthy time of history It is typical for residential properties to be sold under leasehold instead of a freehold.


The main benefit in leasing property is the fact that it offers the opportunity to have a home for those with need of a short-term residence. While the conditions that the lease is set however, the duration of the lease is flexible and be for any duration. It is often mutually beneficial for both parties, the lessor and the lessor. For the landlord, he is not restricted to a steady stream of income of the house, but also an interest in the property. He can also sell any freehold stake in the house that is distinct from that of the leasehold interests.

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Another advantage of choosing to lease property is the ease to enforce covenants in the context of leasehold versus the freehold situation. For freehold property, covenants that are positive are not enforceable directly against next owners. However, in the instance of leasehold property the covenants, regardless of whether they are either positive or negative and are valid against any future successors to title.

In situations in which the enforcement of both covenants that are both positive and negative is essential leases are utilized. This is particularly true when it comes to households that are located in a single building. This is where landlords are able to let their units rather than sell, and thus ensuring that every tenant is able to take care of repairs to their own properties. This is also beneficial to of tenants as they are guaranteed that the common parts kept by the landlord will be maintained by the landlord. In most cases the landlord is responsible for maintenance for the common parts, however, he will pay for the expenses that is incurred through a’service charge’. This service charge can be considered an implied covenant. The enforcement of these covenants could cause huge issues for freehold property.


Leases can be detrimental to the tenant, not the landlord. Because the lease is for a set duration the lease will eventually expire and the tenant must once more approach the landlord to request an extension of lease. The landlord could choose to agree or not renew. If the lease is of worth, the lease is an asset to be discarded that the tenant holds. Certain tenants have a legal right to extend or renew the duration of their leases in certain conditions. However, if this right isn’t guaranteed and is not guaranteed, it can be a huge issue to the tenants.

Another challenge faced by tenants is the problem of covenants. Leases place a significant obligations on tenants because of covenants to fix and maintain common elements of the building, impose restrictions regarding the use of the property and so on. The landlord is provided with a range of options to ensure that he is in compliance with the covenants. He may also decide to cancel the lease and put it in place. This is a challenge for tenants, especially if the lease is capital-value since the value could be lost if the lease was terminated.

If you take the viewpoint of the landlord leases may be disadvantageous because the landlord is accountable for ongoing obligations like repairs, insurance, etc. The obligations might have been eliminated in the event that he had decided to dispose of the house. The obligation is, however, contingent on the rent received from the property as well as the covenants that were agreed to be fulfilled through the tenants.

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