With leasehold, the buyer owns the bricks and mortar of a property, but they rent the land it is built on for a set period — usually between 125 and 999 years. Property companies including Barratt and Redrow are locking homeowners into restrictive contracts when they purchase the freehold on their properties. The new rules will mean that if a property is sold to an investor who has not bought it outright, then all of its existing owners must agree to terms which restrict them from selling or renting it. However, several property companies are offering to sell the freehold only on condition that the terms of restrictive covenants in their leases remain in force, which, among other things force homeowners to seek consent to make alterations and to pay maintenance charges. Lawyers have warned the contracts could be enforced indefinitely.
Property companies including Barratt and Redrow are locking homeowners into restrictive contracts when they purchase the freehold on their properties. The new rules will mean that if a property is sold to an investor who has not bought it outright, then all of its existing owners must agree to terms which restrict them from selling or renting it. However, several property companies are offering to sell the freehold only on condition that the terms of restrictive covenants in their leases remain in force, which, among other things force homeowners to seek consent to make alterations and to pay maintenance charges. Lawyers have warned the contracts could be enforced indefinitely.