Learn the Difference Between Freehold and Leasehold Condos
When it comes to real estate, there are additional kinds of condo ownership and two familiar terms you will usually come across are leasehold and freehold. Comprehending the difference between these two types of condo privilege is important, as it can affect your rights, obligations, and financial concerns. In this article, we will Learn the Difference Between Freehold and Leasehold Condos to aid you make knowledgeable resolutions in your real estate industry.
Foreign Ownership of Condos
Purchasing a condo under freehold terms is the only way a foreigner can lawfully own property in Thailand. The Condominium Act B.E. 2522 (1979) states that under the act’s unique status, foreign freehold license of up to 49% of condo units and standard property co-ownership is permitted.
Before getting too curious about a condo complex, it is always a pleasing idea to confirm that it has completed the quota permitting foreign acquisition.
What is a Freehold Condo
This is a type of property ownership where the owner has full authority over the real property and the land it stands on. The owner carries the title to the property forever, without any time restrictions or commitments to an outstanding landlord. The owner can sell, lease, or transmit the property at their preference.
Advantages of Freehold Purchases
Freehold purchases permit landlords the most significant liberation to change the property, fix rules within the condo complex, and discover further income from the condo. The advantages contain:
Voting Rights in the Condo Complex
When you buy a freehold condo, you connect with a community of other landlords in the condo complex. You will have voting rights that control the way the condo complex is operated and sustained.
Limitation on Directed Fees
As a property owner, you would not need to pay the supervision fees that some neighbors will have to pay under their leasehold understanding. Your condo supervision will be operated unassisted, and common area supervision problems will be voted on.
Property Transfer and Sale
A freehold condo becomes part of your acquisitions. It is contagious to family members or anyone of your selection at any time. You can also vend your condo at any time and set any information conditions for the sale.
Making Your Rehabilitation
When you make a freehold acquisition, you become liable for the upkeep and rehabilitation of your condo, the same as you would be for an independent home.
What is a Leasehold Condo
The definition of leasehold property is easy. It is a kind of property ownership in which the owner, or leaseholder, has the freedom to use the property for a distinct period, per the lease agreement terms. The land itself is maintained by a freeholder (or landlord), and the leaseholder must adhere to the conditions recapitulated in the lease.
Advantages of a Leasehold Arrangement
The essential thing to recognize is that a leasehold agreement is not identical to a rental agreement. The leasehold is an extended arrangement that blesses certain requests to the resident in interaction for long-lived occupation and a guaranteed income for the property owner. Advantages to the leaseholder include:
Low Transfer Fees When Vending Your Leasehold
As a leaseholder, you relish some of the same privileges as a property owner, such as selling your leasehold. The transfer fees of vending a leasehold are only 1% of the remaining lease value.
May be superior for Single People
A leasehold understanding that has terms benefiting both the property owner and the leaseholder may be the ideal configuration for single leaseholders who do not have family members to give the property to. When the number of years of the leasehold has been achieved, the leaseholder can merely walk away or bargain a new deal.
Capacity to Re-rent the Property
As a long-term leaseholder, you are accountable for the property and normally can re-rent it when it is unoccupied.
Authority Over Changes to the Property
The leasehold can be bargained before the fact. There can be some capacity to make some modifications to the property without sustaining fines or penalties registered into the duration of the leasehold.
Differences Between Freehold and Leasehold Condos
| Sr No. | Differences | Freehold Condos | Leasehold Condos |
| 1 | Ownership and Control | With freehold ownership, you own the property and the land it poses on. This gives you entire control over the property. You can make transformations, renovations, or attachments, subject to local planning ordinances. | In a leasehold property, you buy the right to occupy the property for a limited duration. The land is owned by a freeholder, usually a housing organization or local authority. Your authority is limited by the terms of the lease agreement, which may determine transformation or need permission from the freeholder. |
| 2 | Lease Term and Renewal | There is no lease term with freehold ownership. You maintain the property forever and can pass it down to inheritors or sell it without restriction based on the lease period. | The lease term is an essential element. A shorter lease (less than 80 years remaining) can negatively affect the property’s value. Leasehold properties usually come with revival options, which can be costly and subject to conference with the freeholder. |
| 3 | Financial Considerations | Typically, freehold properties have an elevated upfront price due to holding the land. Nevertheless, they manage to relish over time, providing a better long-term investment. You are accountable for all supervision and repair prices. | Leasehold properties normally have a more inferior initial price. Nevertheless, you may sustain further ongoing charges, such as ground rent, a yearly fee paid to the freeholder, and service charges for building supervision. The price of continuing the lease can also be effective. |
Conclusion
In the above details, we give you proper information about the Difference Between Freehold and Leasehold Condos. We hope that these details will help you.
Frequently Asked Questions (FAQs)
Question – How does financing vary for freehold vs. leasehold condos?
Answer – Freehold condos are normally more comfortable to finance due to a full license. Leasehold condos may be more difficult to finance, particularly if the lease has a short-term left or damaging regeneration period.
Question – How does a leasehold affect the value of a condo?
Answer – Leasehold condos normally have a lower market value than freehold condos. The value diminishes as the lease term nears its extinction, as possible buyers may be less curious about a property that could retreat to the landowner shortly.
Question – Can I buy a leasehold condo for a prolonged duration?
Answer – Yes, leasehold terms are generally 99 years, but the property’s value may decrease over time as the lease nears extinction. It is necessary to comprehend the lease conditions before buying.
