Freehold or leasehold

Renno123

Currently looking at a property for sale which is listed as leasehold.
Is there anything to consider with leasehold as opposed to freehold?

The length of the leasehold. usually they are very long like 99 years or more, so wouldn't matter in that respect, downside is that you may own the house but you don't own the land it is built on, when I was buying my house, I would only consider freehold, but that's just me.

Samuel T. Cogley

Is it easily converted to freehold? If it's on an ex local authority estate it usually will be, converted mine for less than €200 all in.

I'm assuming it's not an apartment, almost all of which are leasehold.

Renno123

No, not an apartment.
How did u go about converting to a freehold?

Samuel T. Cogley

Renno123 wrote: »

No, not an apartment.
How did u go about converting to a freehold?

There is legislation to allow for it, at least when it comes to local authority housing. You just phone up the council and they do the rest, takes a while and costs around €200 but it's easy done.

L1011

Assuming the leasehold is sensible, e.g. hundreds of years remaining from a 999 year lease, it won't cause any issues in purchasing.

Private leaseholds can be bought out also, generally slightly dearer than local authority ones as the ground rent was usually higher.

whatever76

yea I recently purchased and only copped house was leasehold at solicitor/contract phase ( I didn't ask about this during viewing so heads up for those buying second hand house to check this out just not to be surprised - I didnt even know it was a thing ) . Its a 500 yr lease in which the house is nearing 50 years into it so its not going to be a problem in my lifetime anyway ( worst case scenario is someone comes knocking for me to start paying the lease) … the lease is something like 12 PUNTS a year and according to previous owners who owned house 30+ years it was never looked for or paid … discussed with Solicitor and not out of the norm and with lease this length he didn't see it as much of an issue and was really up to myself if want to pursue to convert to freehold - it could be costly if there is hassle getting records and trying to find out who owned the leases etc …. I was a bit " hmm so the land is not mine . " which I didnt expect .. if it was a 100 year lease and potential to be issue in my lifetime I more than likely would go about converting to freehold in next year or so but as he said the "lease" of the land is mine and over 400 years left in it you are covered as such. I may just leave it as is but Ill see in next few years on how life is and have no plans is selling up and I get that irish yearning to own "land" kicks in

Dolbhad

A lease needs to be at least 70 years to be “good marketable title”. If it’s less than that banks won’t lend on it and can be an issue to buy/sale.

You usually have the entitlement to buy out the freehold (unless it’s an apartment) but will incur legal fees so provided you have a long lease, there is no issue with leaving it as it is.

If you are looking at properties on landdirect.ie you know it’s leasehold when it’s hatch in green lines.

Claw Hammer

Samuel T. Cogley wrote: »

There is legislation to allow for it, at least when it comes to local authority housing. You just phone up the council and they do the rest, takes a while and costs around €200 but it's easy done.

The usual charge is some multiple of the ground rent. At one time it was 17 times the annual ground rent. It will also trigger a first registration which will be far more costly.
There is no need to know who the owner is as it can be done by arbitration.

Samuel T. Cogley

Claw Hammer wrote: »

The usual charge is some multiple of the ground rent. At one time it was 17 times the annual ground rent. It will also trigger a first registration which will be far more costly.
There is no need to know who the owner is as it can be done by arbitration.

Wasnt more than €200 in my case and that included all the fees and multiple of the ground rent.

partyguinness

Everything else being equal stay away from leasehold if you can help it.

Dolbhad

Fees depend on how long is left on the lease, how much the ground rent is in the lease and who owns the freehold.

The council are the cheapest and easiest to buy from. The ground rent in minimal and then council can do it all in-house so just charge you an administrative fee to get it signed off on. You will have your own legal fees and outlays for the
Registration.

Buying off someone else is a different matter. The shorter the lease, the more expensive it is to buy out esp when you get to 100 years and less. So freehold owner can charge, if they want to, a hefty fee plus their legal costs. It’s not as easy as getting on to land registry and buying it out. Seems to be different rules and need to meet certain requirements so not one rule fits all.

So buying freehold is best. Ideally if leasehold you want to have a few hundred years on the lease so you or the next few generations of your family don’t need to deal with it. And also that nothing unusual in the lease restriction wise. That’s why usually leasehold was sold instead of freehold so conditions could be put into the lease.

Claw Hammer

Samuel T. Cogley wrote: »

Wasnt more than €200 in my case and that included all the fees and multiple of the ground rent.

Was that before compulsory registration or as it a council house?

Samuel T. Cogley

Claw Hammer wrote: »

Was that before compulsory registration or as it a council house?

Built in 2002 on an existing plot - so local authority aye.

Renno123

The one I'm looking at is around 150 years old

L1011

Renno123 wrote: »

The one I'm looking at is around 150 years old

It probably has ~850 left from a 999 year lease then but you definitely need to get that checked as 999 is just the norm, not compulsory.

Claw Hammer

L1011 wrote: »

It probably has ~850 left from a 999 year lease then but you definitely need to get that checked as 999 is just the norm, not compulsory.

Some of the are a lot shorter. I was offered the balance of a 99 year one in Phibsboro once. There are Some in Rathmines which were 150 years originally.

Claw Hammer

Samuel T. Cogley wrote: »

Built in 2002 on an existing plot - so local authority aye.

Much different and less costly than with a private owner. Compulsory registration has also come in. Land Reg fees have increased a lot since 2002.

Samuel T. Cogley

Claw Hammer wrote: »

Much different and less costly than with a private owner. Compulsory registration has also come in. Land Reg fees have increased a lot since 2002.

Should clarify I bought in in 2019 but I take you point on private being different.