Shared freehold: What does it mean for you and your property?

You may have found your dream home, but it’s important to understand exactly what you own. If a flat is marketed as having a “share of the freehold,” this does not mean you are buying a freehold property only.

In most cases, you will be buying a leasehold property, alongside a share in the freehold title. That share may be held through a company that owns the freehold, or in your personal capacity with the other flat owners. Which arrangement applies will only become clear once the sales pack is reviewed, so it’s essential not to make assumptions based on the marketing description alone.

Owning a share rather than all of a property’s freehold can affect your legal rights, maintenance costs, DIY projects and even your pets! But what does a share of the freehold actually mean, and does it matter? The residential property team at Attwaters have put together this guide to help you.

Are you a freeholder, a leaseholder or both?

There are two main different types of property ownership in the UK. As a leaseholder, you own your property for a set length of time but not the land or the building where it’s situated. This form of ownership normally applies to flats – there are around 3.5 million leasehold flats in England.

As a leaseholder, you might be subject to additional service charges and covenants imposed by the landlord, such as a ban on pets or hardwood floors. When the lease ends, ownership of the property transfers back to the freeholder. If you are a leaseholder, the landlord is usually the person who owns the freehold (i.e. the building in which the flat is situated).

Buying a freehold title (the most common example being a house) means that you own both the property and the land on which it is situated. There is no time limit on your ownership. You decide how to maintain the property and whether to invest in repairs – although you might have to fulfil specific legal obligations.

Freehold titles are not always held by a single individual – they can be shared between multiple people or owned by a company. Confused? You’re not alone. We are increasingly seeing clients who only realise, when instructing us, that they’ve offered to buy a leasehold property with a share of the freehold title – having assumed they were purchasing a freehold property outright.

The pros and cons of shared freehold ownership

When you own a share of the freehold title, you hold your leasehold property together with a share in the freehold title for the building and the land on which it stands, alongside the other titleholders. In many cases, the freehold title is owned by a company, and your “share of the freehold” is held through membership of that company. As a member, you will be required to comply not only with the terms of your lease, but also with the company’s rules and obligations, which may include participation in management decisions and adherence to company requirements.

Let’s look at an example. Sharon is planning to buy a flat in a large Victorian house that is marketed as having a “share of the freehold.” The building contains six flats in total, and the freehold title of the property is owned by a limited company in which each flat owner holds a share.

When Sharon completes her purchase, she will own a leasehold interest in her flat for a fixed term. Separately, she will also become a shareholder or member of the company that owns the freehold title. This means Sharon does not personally own the freehold of the building; instead, she has an indirect interest in it through the company, alongside the other flat owners.

As collective freeholders, Sharon and the other members of the company can make decisions about the management of the building and the land, such as agreeing to carry out major works or improvements like replacing windows to improve energy efficiency.

One potential advantage of this arrangement is that extending the lease can be more straightforward and cost-effective, depending on the terms of the lease and the company’s articles, as there is no external landlord to negotiate with. This can be particularly important, as a short lease may deter buyers and affect mortgage availability.

However, shared freehold arrangements also come with additional responsibilities. The freehold-owning company must ensure the building complies with health and safety and other legal requirements, and decisions must be made collectively. This can sometimes lead to disagreements or deadlock – for example, if a leaking roof affects only one flat, the other members may be reluctant to contribute to the cost of repairs.

Crucially, owning a share of the freehold does not replace or override the lease. Sharon’s lease remains legally significant, and in practice she wears two hats: one as the leaseholder of her flat, and another as a member of the company that owns the freehold and is responsible for the wider building.

Final thoughts

Buying or owning a property with a share of the freehold can offer advantages, but it also comes with legal complexity that is not always obvious from marketing particulars. Understanding whether you are a leaseholder or a freeholder – and what that means in practice – is essential before you commit to a purchase or make decisions about your property.

Whether you are in the process of buying a property, joining a freehold-owning company or considering collective management responsibilities, taking early legal advice can help you avoid costly surprises and disputes later on.

If you are buying, selling or already own a property with a share of the freehold and would like clear, practical advice, our team would be happy to help. Contact our Residential Property team on 0330 221 8855 or residentialpropertydepartmentemail@attwaters.co.uk to find out how we can help you.