Property rights in England

The procedure of accession to the real estate property differs much from that which we know in France. England knows no equivalent to our notarial system. Approximately 95% of sales are made by solicitors (customary law attorneys writing private deed) and the remainder by Licensed Conveyancers (real estate lawyers licensed to make sales). Sales are in the form of a contract and not an act of sale as we have in France and the formalism is much more flexible. In England, the notion of property is different from that on the continent.

It is necessary to make the difference between the Freehold Estate which corresponds to the free and perpetual property and the Leasehold Estate which corresponds to the free but temporary property.

These two terms describe an important difference in defining property in England. They come directly from the history of England. At the time, the King was the sole owner of all the lands. The majority of houses are sold in Freehold and the majority of apartments are sold in Leasehold.

The Freehold Estate

There are several types of Freehold but only one is generally applied, the others having fallen into disuse. By definition, this right is supposed to be the most absolute. It corresponds to the property of the building and the land on which it is built. Freehold is a perpetual right unlike leasehold. It will end only if there are no more heirs and no will has been considered. The property will then return to the Crown. The holder of the Freehold Estate is registered as a landowner in the land register.

Since 1993, the owners of Leasehold can buy the Freehold between them, which explains why more and more apartments are acquired with part of Freehold. If the owner of Freehold wishes to sell, he must give the choice to the Leasehold holder to buy first.

The Leasehold Estate

This is a mode of property ownership in England recognized since the Land of Property Law of 1925. Leasehold is a lower right than that granted by the Freehold and is a freehold property recognized as absolute but granted for a fixed term. The rights of possession enjoyed by the owner of the Leasehold are more limited than those enjoyed by the owner of the property in Freehold.

Three characteristic elements are essential to define Leasehold:

– Fixed term: The maximum duration must be fixed when the Leasehold is granted. There must also be a date of departure for the lease. The Leasehold can be fixed term (it is granted for a fixed term) or it can be periodic (it is fixed for a fixed term, for example weekly, monthly, annual … and is renewable with a fixed period of notice. It is this notice period which defines the duration of the Leasehold). It is possible for a Leasehold owner to sell his right at any time. When acquiring Leasehold, the remaining term of the lease must be taken into account. If there are less than 50 years, it will be difficult to find a loan (75 years being the minimum duration to be considered).

– Exclusive property: This is the possibility of excluding anyone from the property, including the owner of Freehold. It is possible for a Leasehold holder to mortgage his property and to rent it (No clause can prohibit renting).

– An annuity to pay: An annuity is generally payable to the Leasehold holder. The terms must be established when the Leasehold is fixed. Generally the Leaseholder must also pay an annual service to the Freeholder to cover the maintenance and repairs of the building and / or common areas where appropriate.

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