Encyclopedia
Freehold
Ownership of land without a time limit, as opposed to leasehold.
For example: A buyer compares a freehold unit with a leasehold one and asks how lenders treat each. (Illustration only, not a real deal.)
Official source: Land Title Act (BC Laws)
Example only, not a real client. Say a listing describes a building as freehold. That tells you the land is owned, not leased, so you are not facing a ground lease that ends at a set date.
What I’d tell a friend
Freehold means owning, not leasing, the land. Confirm the type of title on the title search.
Why it matters to you
You own the land and building outright, which is usually easier to finance and sell than leasehold.
How to use it in your deal
Buyers should confirm the property is freehold by checking title, and look at all registered charges, like mortgages, easements, rights of way and covenants, which limit freehold rights. Freehold usually supports better financing and resale than leasehold, since lenders and buyers prefer permanent ownership. Freehold strata units give ownership of the unit and a share of common property.
Compare freehold and leasehold prices carefully, since leasehold often sells for less as the term runs down. Owners of freehold land still face zoning, property taxes and other rules. Some First Nations lands and certain port or airport lands are offered only as leasehold. In BC, ownership by non-Canadians may be affected by federal rules on residential property, so check if relevant.
If you're buying through a company, check who'll be the registered owner and whether the purchase triggers property transfer tax, which it usually does for freehold transfers. Ask your lawyer to walk you through the title search line by line.
Mistakes I see
Assuming leasehold is freehold. Ignoring charges on title. Missing foreign ownership rules.
In BC and Vancouver
Title is registered under the Land Title Act through the Land Title and Survey Authority (LTSA).
Official sources: Land Title Act (BC Laws) · Land Title and Survey Authority of BC
What it means
Freehold is ownership of land with no set end date, as opposed to leasehold, where you hold land for a fixed term.
In BC, freehold usually refers to fee simple ownership.
What to check
Search title to confirm the type of ownership and any charges registered against it.
Strata units can also be freehold. For those, read the strata plan, bylaws and minutes as well, since they add rules on top of ownership.
Ask your lawyer to explain any charges on title before you remove subjects.
Questions to ask before you sign
- Is it freehold?
- What charges are on title?
- Is it strata?
- Are there ownership restrictions?
Keep reading
Related terms: Fee simple, Leasehold
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.