Freehold is the equivalent of the old ‘Fee Simple’. Freehold grants the legal owner full legal title and the right to ‘exclusive possession’ of the property.
With a freehold title, the legal owner has the right to occupy and manage the property as they choose, subject only to covenants or other restrictions, such as planning laws and building regulations imposed by the local authority and government.
The quality of a freehold title may be subject to the ‘class’ of title granted by the HM Land Registry:
Absolute Title – This is the highest class of title available. It is equivalent to the original ‘Absolute Simple Fee in Possession’. The vast majority of registered freehold properties in England and Wales are registered with Absolute Title.
If a property is registered with Freehold Title, the legal estate vests in the legal owner (‘Owner’) together with any interests subsisting for the benefit of the estate (for example, ‘Rights of Way’ or ‘Rights for the passage of water’). and drainage” (legally called “easements”) on the adjoining land. The legal patrimony will also be subject to the charges imposed on the land, for example, agreements or easements in favor of the adjoining land; but only those charges that affect the legal status at the time of first registration.
Possessory Title – Possessive title is granted when the owner’s claim to the property is based on adverse possession or when the titles to the property have been lost or the applicant cannot prove their legal right to the property.
The possessory title will be granted when the applicant is in actual occupation of the property or receives income and profits derived from the property and it is not possible to register the property under any other type of title.
Title Possession has the same effect as registration with Freehold except that it is open to challenge by another party who may claim a right to the property. However, if the owner of the Deed of Possession has held the title without challenge for twelve years, he may apply to the HM Land Registry to update the title to Freehold Title.
As a general rule, Mortgage Companies and Banks will not grant mortgages for the purchase of property with Possessory Title. However, in some circumstances, it may be possible to obtain insurance to protect the lender’s interest in the property and make the title acceptable to the lender.
Qualified Freehold Title – A qualified freehold is very rare. Qualified freehold is granted when the applicant’s legal right to the property can only be established for a limited period of time or is subject to reservations the effect of which combine to mean that the title is not a title of good tenure. An example of this is when the transfer of property to the owner is done in breach of trust, such as when someone sells the property without the agreement of another party who has a legal interest in the property.