Freeholders can take many forms; then can be individuals, different types of companies such as finance companies, mixed use companies (owning both commercial and residential properties in the same development) and ground rent investors. There can also be leasehold resident management companies which are often marketed as ‘share of the freehold’.

A block of flats can also have more than one freeholder if the freeholder who owns the ‘superior’ lease sells what is known as an ‘intermediate’ lease to another party. That party becomes the ‘head lessor’ who can then grant ‘under leases’ to the leaseholders of each flat, making the head lessor their landlord.

This then results in 3 different levels of ownership in the building:

  1. The freeholder who has the highest level of overall ownership;
  2. The head lessor (also called the head lessee) who is directly responsible to the leaseholders;
  3. The leaseholder.

Some freeholders self-manage their blocks but most use the services of a managing agent.

Note: Freeholders are also known as landlords in common law but this is not to be confused by a landlord subletting a property.

The greatest power freeholders have over leaseholders is the use of forfeiture (taking away the lease and therefore the property) when leaseholders have breached their covenants.

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