If you’re in the market for a property, you’ve likely come across the terms “leasehold” and “freehold.” These terms refer to the type of ownership you’ll have over the property, and understanding the difference is paramount when making a decision about which type of property to invest in. A leasehold property means one owns the property for a fixed period of time but not the land it is built on. A freehold property, also known as, an absolute proprietorship or free sample, means one owns the property and land.
What is the difference between the two?
LEASEHOLD
Well, for a leasehold property, you only own the property for a fixed duration, as stipulated in the
lease agreement. When the lease expires, ownership of the property reverts back to the
freeholder and the property owner is automatically required to apply for an extension of tenure. In Kenya’s tenure system, the government, the local authority and individuals can grant leases for public and trust lands and freeholds among others.
During the colonial period, the government gave a lease of up to 999 years for agricultural property. However, according to the current Consitution, the lease term was changed to 99 years whether for agriculture or urban plots. Commonly urban plots have a 33-year lease term while individuals with freehold have more flexible terms.
When a lease expires, one can apply for an extension or renewal. This is primarily done by people who want to continue with their residential or commercial projects to get sufficient time to reap benefits. A leading factor to consider with a leasehold is that the holder is subject to ground rent and service charges, which can increase over time. These charges can be expensive. Therefore, it is essential to factor them into your budget. Although leasehold has a limited tenure, at Daykio, we have leasehold properties renewable after expiry in Nairobi, Juja and Kiambu.
FREEHOLD
Freehold property is one where you own the land and the property that sits on it. When you buy a freehold property, you own it outright, and there is no time limit on your ownership. You are not restricted and can do whatever you want with the property, subject to any local planning or zoning regulations. It also means that your descendants or next of kin inherit or succeed the land as long as the family lineage continues.
As the name suggests, the owners are free of any charges and can do as they please with their land since they have absolute ownership over it. At Daykio, our properties located in the outskirts of Nairobi and in the countryside are freehold and, better yet, are ready titles. We have a number of properties along Kangundo Road and Kitengela for residential and commercial purposes.
When buying a property, understanding the difference between leasehold and freehold is essential. A freehold property gives you complete control and ownership, while a leasehold property means that you only own the property for a fixed period of time. If you are considering buying a leasehold property, understand the terms of the lease and any associated charges. Whether leasehold or freehold, we have properties that suit your homeownership or investment needs. View our property listings here: https://daykio.com/daykio-plantations/property-listings/
Contact us at 0718180064, on WhatsApp at 0791800851 or at sales@daykio.com for any
enquiries.
