Owns the land on which the building(s) is built. May also be the landlord. The freeholder is sometimes referred to as having a “reversionary interest”. This just means the freeholder has the right to take possession of the property on expiry of the lease term.

Freehold Company

A company that owns the freehold, the shares in which are usually owned by the leaseholders. Often described as ‘having a share of the freehold’


Either owns the building (as freeholder), has a long lease on it or is a 3rd party under the lease with obligations to manage the building and provide the services under the service charge. The 3rd party is most commonly a Residents’ Management Company.

Residents’ Management Company

A company set up to deliver the services on behalf of the landlord under the terms of the lease. The company is a party to the lease (as landlord) and all leaseholders are usually shareholders.

Head Lessor

the landlord may grant a lease of the whole building to a party (company or individual) who then grants ‘under leases’ to the leaseholders of individual flats. In this scenario, the Head Lessor becomes the landlord of the individual flats.


the person who has bought a lease which gives them the right to occupy the flat for a fixed number of years (“the term”), usually well in excess of 21 years and often as long as 999 years when originally granted. Can also be called ‘lessee’, ‘flat owner’, but usually referred to as ‘tenant’ in legislation.

What is leasehold?

In its simplest form, owning a leasehold flat is a long tenancy. You have the right to occupy and use the flat for a long period of time – the ‘term’ of the lease. This will usually be for 99 or 125 years.

As a leaseholder, you will normally own and be responsible for everything within the four walls of your flat. This will include the floorboards and plaster to the walls and ceiling. The structure, external walls and communal parts of the building, including the land it stands on, will usually be owned by the freeholder who is also the landlord.

The landlord can be a person or a company including a local authority or a housing association. It’s also quite common for leaseholders to collectively own the freehold through a residents’ management company, effectively becoming their own landlord. This is called collective enfranchisement.

Service charges

It will normally be the Management Company’s responsibility for managing, maintaining and repairing the communal areas of the property. They may also arrange for other services such as insurance for the building, provision of central heating, lifts, porterage, estate staff, lighting and cleaning of communal areas.

The leaseholders will pay service charges to the landlord for providing such services. Usually the charges will also include the costs of managing the building, either by the landlord or by a professional managing agent.

Details of what can and cannot be charged by the landlord and the proportion to be paid by the individual leaseholders will all be set out in the lease.

Know your lease

Your lease may be quite complicated but its fundamental role is simple. It’s a contract between you and the landlord giving you conditional ownership of your flat for a fixed period of time. It sets out your contractual obligations as a leaseholder and those of your landlord so it’s important you know and understand it. This will include payment of ground rent (if any) and contributions to the costs of maintaining and managing the building through service charges.

The lease will also place certain conditions on the use and occupation of the flat. It’s especially important to understand these before you purchase your flat. It’s not uncommon for someone to move into their new home only to discover a beloved pet can’t come with them because they are not allowed under the terms of the lease!


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