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Homebuyer occupation rights

This content applies to England & Wales

A person buying a home will acquire one of three types of occupation right. There are advantages and disadvantages to each. 


There is no higher interest in land than freehold and it equates to outright ownership. A freehold lasts forever and the right to occupy can only be affected in limited circumstances, such as compulsory purchase or repossession by a lender or creditor who has secured a loan on the premises. A freeholder may sell her/his interest or may grant lesser interests, such a long lease or a tenancy, to others. See the rest of this section for the practicalities of buying a freehold property. The sections Compulsory purchase orders, Mortgage arrears: payment problems, and Mortgage arrears: court action may also be useful.


Leasehold is an interest in property held by a tenant from a landlord for a time limited period on payment of rent or a lump sum. The terms tenancy and lease have the same legal meaning, but the term tenancy is usually reserved for short leases. A person with a long lease, normally one that is for more than 21 years, may grant shorter sub-leases or may assign the remaining period of the lease to someone else. In addition, a long leaseholder may have the right to purchase the freehold, or a share in the freehold where the premises is a flat. At the end of the period of the lease the property reverts to the landlord. The rights and obligations of the landlord (or lessor) and tenant (lessee) are contained in the lease, as well as in statute. See the section Leasehold property for details.


Commonhold is an interest created by statute, which is designed to overcome the situation that can arise with leasehold ownership where one person owns the lease and another owns the freehold. In commonhold, there is no overall landlord, and ownership of the entire property, including the shared parts, is by the owners of the each unit (usually a flat) in the building, through a commonhold association. Commonhold is not found very often in England and Wales. See the section Commonhold for details.

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