When you buy a property/Land in Nigeria, it will be either a freehold or leasehold. In this article, we look at the differences between freeholds and leaseholds, explaining the whole thing you need to know about the two.
What is a freehold?
If you acquire a freehold land/Property, you will own the estate in its entirety. This includes the buildings, the land, and everything else found on the land. You will for that reason have the right to live there as long as you choose, and you have the right to making any alteration and modification you desire, as long as they conform to planning and building regulations.
Nevertheless, when you own a freehold, you are also bestowed with some responsibilities. For instance, you will have to carry out any repairs or maintenance work that is necessary. Although you may think this is something that is up to your own judgment, you will be accountable for the health and safety of people who are permitted entry into your estate. If you fail to carry out a repair and a visitor is injured, you could be held liable.
There is also such as thing as a 'flying freehold'. This is when part of a property overhangs somebody else's land/property. A common example of a flying freehold is when a balcony overhangs a garden that is not included in the property freehold. While a flying freehold is not common, it can be serious in the eyes of the law, so it is best to seek expert and legal advice if you wish to carry out any modifications.
What is leasehold?
If you purchase leasehold, you are actually buying a right to live in the property or use the property for a specified amount of time; you do not own the property. Instead, the freeholder who owns the property and the land will grant you the right to reside in the property, the terms of which will be laid out in the lease. This will stipulate how long the lease will last (usually 99 years), how much ground rent you must pay a year (to cover the cost of communal maintenance repairs) and how ground rent is split amongst other leaseholders. It is usually possible to extend the lease after it has expired; otherwise, the property will return to the freeholder. The freeholder here may refer to the original owner or the government or any legal entity who sold the land to you.
Purchasing a property
Whether you are purchasing a freehold or a leasehold, you need to instruct a lawyer who specialises in conveyance law. This will make it so much easier, as having a legal professional on your side will guarantee you avoid any pitfalls in the contract, helping your contract run as efficiently as possible.
Ownership Tenure between Leasehold & Freehold Land
- Freehold – Ownership tenure is for life
- Leasehold – Ownership tenure depends on the government which usually span around 30, 60, and 99 years