Leasehold and freehold, forms of property ownership
Owning a property is a cherished dream for most Zimbabweans. The property purchase process which involves selecting the right location, the right property and the right price also involves a critical aspect of selecting the appropriate ownership structure. Property can be owned primarily in two forms, leasehold and freehold with several other derivations from these two ownership structures. The main difference between these primary ownership options is the legal ownership of the property and to some extent the initial property investment required. Freehold ownership is the outright ownership of land and buildings. This is commonly known as having title deeds over the land and immovable property. This means there is perpetual land ownership; whereby the owner of the land has no time limit to property ownership. The owner with freehold thus does not pay property rent to anyone. This method of ownership is preferred mainly by mortgage lenders due to its perpetual ownership attraction. Freehold ownership is more attractive in times when property prices are falling coupled with low mortgage interest rates which create an enabling environment to own property. The option also allows future generations to enjoy the benefits of a property in perpetuity through inheritance. The freehold owner is also at liberty to let his property or refurbish it without seeking prior approval from anyone besides the city council or town planner when it comes to structural refurbishments. On the other hand, with leasehold, a person has the right to use buildings or land for a set period of time, usually in return for a ground rent or normal rent but does not ultimately own the land or buildings. At the end of a specified time, the property will be handed back to the freehold owner. This is common with residential flats, commercial buildings as well as farms. Most leasehold arrangements have clauses which allow leaseholders to either...
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