Define: Freehold

Freehold is a type of property ownership that grants the owner indefinite, unrestricted rights to use, possess, and dispose of the property for an indefinite period. Unlike leasehold, where ownership is limited by a specific lease term, freehold ownership is perpetual and typically includes both the land and any structures or improvements on it. Freehold owners have the right to sell, transfer, or bequeath their property to heirs without time restrictions, subject only to applicable laws, regulations, and property taxes. This form of ownership provides the highest degree of control and autonomy over the property and is common for single-family homes, land parcels, and certain types of real estate.

A form of Estate in land that is characterised as not being derived from, or conditional on, the estate of another. Historically a key feature of freehold ownership was the ability to extract Rent from one’s tenants (see: Tenancy). Although historically there were multiple forms of freehold, since the Law Of Property Act (1925) there has been only one: the Fee simple absolute in possession. These days the two terms are synonymous, and the other forms of freehold are obsolete.

It is not the freedom from rent that technically distinguishes a freehold interest from a lesser form of estate, such as a Tenancy, nor the right to enjoyment in perpetuity (because this was not a feature of, for example, a freehold Life estate). One has to ask, then, what real difference existed between, say, the purchase of a life estate and a long Lease established by a fine (see: Fine land and property) The strict distinction seems to be that a lease must be for a specified maximum duration, while the life estate was for life — an uncertain duration. This relatively small technical distinction made one form of occupation freehold and the other leasehold, subject to entirely different sets of obligations and rights. It is for reasons like this that the 1925 legislation rationalized the nature of freehold and leasehold interests.

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This glossary post was last updated: 29th March 2024.