Khaleej Times, Tuesday, Mar 21, 2023 | Sha'ban 29, 1444
What you should know about freehold and leasehold properties
I am on the lookout for a property in Dubai, but I am often confused between the
terms freehold and lease (hold)? I am an expat who wants to buy a flat. Should I
opt for freehold or leasehold? What are the benefits and negatives of the two?
The term leasehold means you will own the property rights for a fixed term,
which is a maximum of 99 years. However, you will not own the property’s land,
the total ownership of the land goes back to the freeholder.
The benefits of owning a leasehold property include:
The initial cost of purchasing a leasehold property is often lower than that of
a freehold property.
You are not fully responsible for the maintenance and upkeep of the building, as
this is the responsibility of the freeholder or landlord.
You may have access to additional amenities such as communal gardens or leisure
The negatives of owning a leasehold property:
You are subject to the terms of the lease which can limit what you can do with
the property. Any upgrades or alterations you'd like to make to the property
require written approval from the freehold owner.
You may face other restrictions and less control over the management when it
comes to subleasing the property or owning pets.
You may be required to pay ground rent and service charges which can increase
Whereas freehold ownership if you buy the property on a freehold basis you have
absolute ownership of the property and the land it’s built on. The property can
then be sold, leased or occupied at the owner’s wishes.
It's worth noting that the benefits and negatives of owning a property freehold
or leasehold can vary depending on the specific property and the terms of the
lease. It's important to carefully consider these factors before making a
What is an escrow account when an expat buys property? How does it protect the
An escrow account is an account set up so that monies can be held by a third
party while other parties complete a transaction. As a buyer, when you deposit
your funds into an escrow account rather than giving this money directly to the
seller, as a buyer you are protected if the sale falls through. The third-party
managing the escrow account can return the money to buyers without involving the
seller, mitigating the financial risks for buyers.
An escrow account offers several benefits to the buyer:
Protection from fraud: The funds are held by a neutral third party, so the buyer
can be sure that they will only be released when all conditions of the sale have
Assurance that the property is as advertised: The escrow agent will typically
hold the funds until the buyer has had an opportunity to inspect the property
and confirm that it meets their expectations.
Protection against non-performance: If the seller fails to transfer ownership of
the property, the funds can be returned to the buyer.
Overall, an escrow account provides a level of security and peace of mind for
both the buyer and the seller, ensuring that the transaction is completed
smoothly and fairly.
George Barker is sales consultant at Betterhomes. Views expressed are his own
and do not necessarily reflect those of Khaleej Times.