5 ms·

It's quite common (in the UK) to have properties that haev a leasehold but not freehold. Generally speaking leases are cheap and long (100 years?) and get rene

It's quite common (in the UK) to have properties that haev a leasehold but not freehold. Generally speaking leases are cheap and long (100 years?) and get renewed decades before the lease term ends. It does reduce the property value a little.

MrUnderhill 10y ago
Quite common here in Norway as well, especially for cabins and holiday homes. Interestingly, as recently as 2012, the European Court of Human Rights in Strasbourg ruled that landowners were allowed to change the terms of land leases when they came up for renewal, overruling the national supreme court [1]. Before that, they were obliged to offer the exact same terms, adjusted only for inflation. [1] http://www.newsinenglish.no/2012/06/13/lease-holders-now-on-shaky-ground/ http://www.newsinenglish.no/2012/06/13/lease-holders-now-on-...
- Someone 10y ago
  On a hundred year bond, "adjusted for inflation" can already be a nasty surprise (5% inflation a year over a century gives you about a 2^7 multiplication factor, or two zeroes)
  - smallnamespace 10y ago
    Why would that be a nasty surprise? The real value is unchanged. Unless you're saying the adjustment only happens at renewal, and not annually?
    - akvadrako 10y ago
      Often that's the case and in some countries you typically owe the whole value for the next 40 years when it's renewed. Of course it could be absorbed in the mortgage.
tzs 10y ago
It happens here in the US in Washington, too, with houses on Indian reservations owned by people who are not part of the tribe. They have long leases (around 100 years) on the land, and own the house on top of the land. The terms of the leases typically require that the lessee return the land to its original condition when the lease expires, which means demolishing or moving the house and replanting appropriate vegetation, but I've read that usually the tribe will accept the lessee leaving and turning the house over to the tribe. If you are ever buying a house in Washington and see something that seems too good to be true, like a beachfront house at a low price, look carefully for something about a land lease. The practice of leasing land from tribes and building houses on it goes back a long way, and some of the early leases are expiring in a few years.
haberman 10y ago
When I was in the UK recently I remember seeing ads for 999 year leaseholds. I thought that was very strange: like you kinda own it but kinda don't.
- coob 10y ago
  Leaseholds that long usually come with a share of the freehold.
jrockway 10y ago
I've noticed this when looking for apartments in New York. When you see an especially cheap apartment that has nothing obviously wrong with it when you look at the pictures, it's one of these three things: 1) The building doesn't own the land it's built on. 2) The current owner is renting it to a rent-controlled tenant who refuses to leave until they die. 3) Maintenance fees are $3000 a month for a studio due to severe mismanagement or something.

MrUnderhill 10y ago

Quite common here in Norway as well, especially for cabins and holiday homes. Interestingly, as recently as 2012, the European Court of Human Rights in Strasbourg ruled that landowners were allowed to change the terms of land leases when they came up for renewal, overruling the national supreme court [1]. Before that, they were obliged to offer the exact same terms, adjusted only for inflation. [1] http://www.newsinenglish.no/2012/06/13/lease-holders-now-on-shaky-ground/ http://www.newsinenglish.no/2012/06/13/lease-holders-now-on-...

Someone 10y ago
On a hundred year bond, "adjusted for inflation" can already be a nasty surprise (5% inflation a year over a century gives you about a 2^7 multiplication factor, or two zeroes)
- smallnamespace 10y ago
  Why would that be a nasty surprise? The real value is unchanged. Unless you're saying the adjustment only happens at renewal, and not annually?
  - akvadrako 10y ago
    Often that's the case and in some countries you typically owe the whole value for the next 40 years when it's renewed. Of course it could be absorbed in the mortgage.

tzs 10y ago

It happens here in the US in Washington, too, with houses on Indian reservations owned by people who are not part of the tribe. They have long leases (around 100 years) on the land, and own the house on top of the land. The terms of the leases typically require that the lessee return the land to its original condition when the lease expires, which means demolishing or moving the house and replanting appropriate vegetation, but I've read that usually the tribe will accept the lessee leaving and turning the house over to the tribe. If you are ever buying a house in Washington and see something that seems too good to be true, like a beachfront house at a low price, look carefully for something about a land lease. The practice of leasing land from tribes and building houses on it goes back a long way, and some of the early leases are expiring in a few years.

haberman 10y ago

When I was in the UK recently I remember seeing ads for 999 year leaseholds. I thought that was very strange: like you kinda own it but kinda don't.

coob 10y ago
Leaseholds that long usually come with a share of the freehold.

jrockway 10y ago

I've noticed this when looking for apartments in New York. When you see an especially cheap apartment that has nothing obviously wrong with it when you look at the pictures, it's one of these three things: 1) The building doesn't own the land it's built on. 2) The current owner is renting it to a rent-controlled tenant who refuses to leave until they die. 3) Maintenance fees are $3000 a month for a studio due to severe mismanagement or something.