To understand housing law better we thought we’d shed some light on the most important legislation and clarify some of the jargon used in property and housing laws.
Commonhold – a recent change in the law has created a new category of property ownership different from both leasehold and freehold. Commonhold is being used mainly for blocks of flats and other buildings with multiple homes which would have been leasehold in the past. When a house is owned with common hold the owner of the property has complete freehold ownership of their own property and becomes a member of the buildings commonhold association, which is responsible for the ownership and maintenance of the communal areas, roofing, shared doorways etc. It is hoped this new project will reduce the problems which occur when there is a dispute between freeholders and leaseholders.
Freehold – for most people freehold ownership is the ideal circumstances, they have complete ownership of the land on which their property is built and can do with the property as they like. This is quite an attractive proposition to most people as it has the most flexibility though can often be more expensive than other options.
Leasehold – this is the most common type of ownership arrangement in blocks of flats and converted houses. If you are a leaseholder someone else owns the freehold to your flat, this means they are entitled to, and usually do, charge an ongoing ground rent as well as service charges. Leases also have a set length after which the ownership of the property reverts to the freeholder. These leases are usually decades old and there are legal rights ensuring leaseholders have the ability to extend their lease.
Enfranchisement – there are rights guaranteed in the Leasehold Reform Housing and Urban Development Act 1993 and the Commonhold and Leasehold Reform Act 2002, which gives leaseholders the right to extend the lease by ninety laws and if all leaseholders are in agreement the right to organise a commonhold agreement.
Right to Buy – this scheme allows council tenants in certain circumstances to purchase their council house at a discounted rate. You need to be a secure tenant and need to have lived in the flat for five years if you moved in after 2005 and two years if you moved in before. The discount can be up to 35% of the market value though each local area has an upper limit of the discount.
Housing Act 2004 – this is a new law which has been guaranteed a number of new rights for home owners including specifically legislation on houses in multiple occupations.