What are the Responsibilities of a freeholder?
Freeholders are the people who own their homes and the land they sit on, as well as the air above it. So, you own the building and the land around it, that comes with a pretty long list of responsibilities. Freeholders in England and Wales need to keep an eye on property maintenance, make sure the building is properly insured, and also cover council tax – it very much depends on the situation.
Below we’ve put together a rundown of what freeholders can expect.
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What are the Responsibilities of a Freeholder?
Being a freeholder – whether you’re on your own or part of a collective enfranchisement with leaseholders – comes with some core responsibilities. These include:
- Keeping the building in good nick and making sure communal areas are spick and span \
- Sorting out buildings insurance\
- Handling service charges and collecting ground rent\
- Keeping in touch with property management if you use them\
- Keeping leaseholders in the loop about any major works\
- Making sure the leases are up to date and correct
Each of these jobs involves a load of day-to-day stuff, compliance issues and processes to make sure the building stays safe and the residents are treated fairly.
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Typical Freeholder Responsibilities, Explained
Building maintenance and upkeep
As a freeholder, you’ll need to keep on top of building maintenance and upkeep. This includes:
- Keeping the building and roof in good condition, including the gutters\
- Scheduling and arranging general upkeep, like cleaning, decorating and painting\
- Making sure the utilities like heating, plumbing and electricity are all in working order\
- Looking after communal gardens and arranging pest control\
- Preparing for and arranging major works, making sure they follow the rules in Section 20 of the 1985 Landlord & Tenant Act\
- Keeping contractors in the loop and dealing with payments\
- Making sure leaseholders are on the right track with ground rent and service charges\
- Ensuring you’re following all the necessary health and safety rules
If you want to keep on top of all the regulations, it’s really helpful to schedule regular inspections, keep good records of what’s been done and sort out any issues as soon as possible. This ensures the property stays safe and the residents are comfortable.
Buildings insurance
One of the biggest responsibilities for a freeholder is arranging and renewing buildings insurance. Leaseholders, on the other hand, will be responsible for paying the premiums in line with their lease agreement. And let’s be honest, this can get pretty pricey over time, so leaseholders might want to think about getting their own contents insurance too – because anything inside the flat won’t be covered by the buildings insurance.
The lease might say that as the freeholder, you need to get comprehensive cover which is sensible really as if anything happens to the property it’s a lot easier to sort out with the insurance company if they’re covered by an adequate policy like Comprehensive Buildings Cover, which covers any damage done to properties from unexpected incidents like fires and storms.
It’s worth noting that the policy you get should be a landlord’s building one, not just a residential one, as standard residential insurance won’t cover a freehold building with long leases.
Service charges and management reports
Service charges are the payments made by leaseholders to cover the costs of building management and maintenance. As a freeholder, you’re responsible for collecting these payments, but also for setting and spending them – and you need to make sure you’re not charging leaseholders too much, or you could find yourselves facing a tribunal.
The terms of the lease will say what services you can charge for and how often leaseholders have to pay. It’s a big responsibility, because you need to make sure the amounts you’re charging are fair and reasonable, so just make sure you’re providing the right services at a fair price.
To learn more, have a look at our guide to buying the freehold of your flat.
Comparing Freeholder Responsibilities to Leaseholder Responsibilities
This table highlights how the essential financial, legal, and maintenance responsibilities lie with the freeholder, while the leaseholder primarily funds these obligations through charges and participates in limited decision-making.
| Responsibility | Freeholder | Leaseholder |
| Building structure upkeep | Responsible for maintenance and repairs | Not responsible; pays via service charge |
| Maintenance of communal areas | Responsible | Can report issues; pays for upkeep |
| Buildings insurance | Arranges and maintains policy | Pays share via service charge |
| Service charge management | Sets and manages collection/spending | Pays charges; can inspect accounts |
| Ground rent collection | Collects (if applicable) | Pays (if applicable) |
| Health and safety compliance | Legally responsible for communal areas | Adheres to rules in their lease |
| Consulting on major works (“Section 20”) | Initiates and runs consultation | Must be informed and can comment |
| Managing and updating leases | Administers grants, variations, and registrations | Can apply for lease changes |
| Employing property management agents | May appoint and oversee agents | May have input if ‘right to manage’ |
| Everyday property management and repairs | Delegates or directly manages | Not responsible; reports issues |
Conclusion
To meet the building maintenance and upkeep responsibilities, it’s vital that all freeholders have a good understanding of Landlord and Tenant laws, as well as health and safety legislation, amongst other leasehold or property ownership matters.
Lack of knowledge could lead to the building deteriorating, as well as unhappy or vulnerable residents living in both unpleasant or dangerous environments. Failure to comply with legislation could also lead to criminal prosecution, amongst fines or terms of imprisonment which is why it’s advisable to seek advice before purchasing a share of the freehold.
At the Freehold Collective, we can help! We’re happy to consult with leaseholders at any stage of their freehold journey, and we have a wealth of information and experience having all overseen our own freehold purchases.