Owning Property: Leasehold vs Freehold

 In Belize Real Estate, Investing In Belize

When investing in a foreign market it is important to know the ownership rights.

When you buy property, the term on your document will determine whether you own the property or properties in perpetuity or for a predetermined period of time. The terms should specify what and how much to pay and determines what you can do and cannot do with the title document you hold with regards to the property you own. One of the main attractions to Belize real estate is that foreigners own their property freehold, and the country avoids the use of a two-tiered ownership system that is used through most of the Caribbean.

Belize has Freehold Property Ownership which allows foreigners to own their property and maintain the same ownership rights as citizens. This is one of the many reasons investors love Belize. This post will shed light on property ownership rights and the differences between leasehold and freehold property ownership. But first, let’s understand the meaning of each one.

What is Leasehold?

Leasehold property ownership provides a document that gives ownership of a property for an agreed period. The agreement is often between the freehold property owner and you, the leasehold owner. Therefore, leasehold is a property where you do not have ownership of, in perpetuity. When the agreed period ends, a leasehold owner is to return the property to the freehold owner who owns the property in perpetuity.

Circumstances surrounding leasehold

However, leasehold title often lasts a long time to give the owner ample time to use the property built on the freehold land. A period of 99 years, 120 years, 999 years or even longer may be agreed upon. In the case of leasehold, the freehold owner is often responsible for maintaining the common parts of the property including the staircase, roof, surrounding walls except expressly stated in the leasehold.

In a nutshell, think of leasehold as a tenant-landlord relationship where the leaseholder will be responsible for annual maintenance and insurance fees, and other building maintenance charges. Often, even when freeholder expects the leaseholder to effect some limited changes, permission is often required from the freeholder before carrying out such task.

Failure by the leaseholder to comply with terms of the agreement may lead to forfeiture of the property.

What is Freehold?

Freehold property ownership is the opposite of leasehold where the owner owns the title including the land and building on it. The freehold owner is responsible for both land and the property on it. Unless in shared ownership instances, where the freehold owner is not the sole owner of the property. In Freehold ownership the owner of the real estate enjoys free ownership for perpetuity. The owner of the property can use the land for any purposes as long as they are in accordance with the domestic laws and regulations. Another key advantage of Freehold Ownership is the sale of a freehold property does not require consent from the state and hence requires less paperwork.

Belize property ownership is freehold, which allows for full foreign ownership. This empowers the investors and/or developers as they control the title.

Circumstances surrounding freehold

While leasehold is limited in what they can or cannot do with the property, freehold owner is in no way subject to any limitation. The freeholder is not subject to annual ground rent or any fees for that matter. Although the owner is required to meet the needed responsibility of maintaining the property.

It is expected that a freehold property should have no limitation whatsoever, there may be a time when the situation is different especially with ongoing trends of leasehold properties in new buildings.


Frequent disagreements between freeholders and leaseholders

  • Contentious fees: Overcharge complaints against freeholders by leaseholders.
  • Improper maintenance issues: Leaseholders often face exorbitant charges by freeholders.
  • Compliance issues: Leaseholders may flout the leaseholder restriction agreement.

Whether leasehold or freehold, every property will return to the freeholder after the subsisting agreement. Before you jump at a property, however, make sure to know what your title document contains.

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