Well, after 14 years as a Freehold Management Company Director for a block of central London flats, and since 2008, Ive also been a member of the association of residents/ condominium (conseil de coopropriété in French) for a block of flats in Paris, I am a bit of an old hat when it comes to European property ownership, both UK-specific and continental. For those unaware, registered land ownership only became available in England and Wales in the 20th century with the advent of the Land Registry Act 1925. Prior to this act, all land was unregistered - legal ownership recorded only by written [and sometimes verbal] deed. Those also fond of the much-acclaimed ITV, British upstairs-downstairs period drama series Downton Abbey will have noticed that several senior servants of the Grantham Estate are considering the purchase of a property to rent and obtain an additional income later in life (very meagre pensions were only introduced in England and Wales with the passing of the Old Age Pensions Act 1908). In the day, property ownership and social security benefits would have been something new to British great grandparents and grandparents alike, depending on when you were born of course. Property ownership in the United Kingdom is further complicated by its being divided into at least 4 possibilities in England and Wales, which owing to a Constitutional Monarchy means that the Crown/ Queen, as opposed to a State or Nation in a Republic, owns all of the land, thus complying with the principle of bona vacantia (Lat.) as was previously followed under the rules governing escheat (transfer of an aristocrats estate with no heir back to the Crown). Furthermore, land ownership in Northern Ireland, especially in Scotland, differs from that of England and Wales. For the latter, the 4 main property ownership possibilities are: Freehold; Leasehold; Leasehold with Share of Freehold; and Commonhold. (1) The first usually applies to freehold houses and maisonettes, with or without external space (gardens etc.), throughout England and Wales and individuals who own the Freehold outright own the land and everything attached to the land, and can make claims to certain items found below and above the land, e.g. trees, rights to air/ light etc. with dwellings close together, i.e. terraced housing; (2) Whereas Leasehold ownership is a remnant of feudal land ownership through landed-gentry (blue-blooded royalty or aristocracy lineage). Especially in London, where the Duke of Westminster owns an obscene amount of land in the most upmarket areas of central London, Any building built on his land, at whatever time, is subject to an annual ground rent, payable by the Leaseholder/ Lessee to the Freeholder/ Lessor. In addition, central London properties look immaculate because it is the Freeholder, or thanks to more recent legislation, the Right to Manage Association (Leaseholders that own their flats however do not own the freehold) for this reason they are still subject to the annual ground rent (fixed or escalating amount over the time/ tenure) of the Lease (purchase contract for ownership of a property/ flat within a London block of flats for a fixed number of years). It is also noteworthy that, via a surveyor, one can extend the Lease at any time through negotiation with the Freeholder or forced legal recourse, collective enfranchisement procedure; (3) Leasehold with a Share of Freehold: this type of ownership is effectively similar to basic Leaseholder however with one very important difference. The flat owners have either banded together and forced the Freeholder to sell the Freehold through arbitration or the courts or a property developer bought the Freehold and set up a Freehold Management Company to buy and manage the Freehold, i.e. land and all common areas on of the building on the land. This means that when an interested buyer purchases a Leasehold with Share of Freehold property, the individual is effectively purchasing 1 share in the Freehold Management Company (number of shares issued usually equivalent to number of flats) and is selling an equal share and thus ipso-facto becomes a shareholder in the company. This is the ideal scenario owing to the owners as a group having complete control over the entire Freehold and deciding as a whole how and when to best fund necessary upkeep, maintenance, management and works or indeed how to negotiate licences with interested parties looking to trespass on Freehold land (on, below or above the land) for refurbishment works etc. (4) Finally, as of the Leasehold and Commonhold Reform Act 2002, buildings and flats can now be owned similar to the rest of the world (condominium management scheme) however owing to typically-British idiosyncrasies, and some concern from institutional financial lenders, take up of this means of ownership has been extremely slow. Anyone interested in buying property in the UK or Continental Europe... my door is always open. :)
Posted on: Wed, 03 Dec 2014 11:16:37 +0000
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