Leasehold

Leasehold is a right that allows you to use a piece of land and the home on it, while the land remains the property of another party. This owner, the ground lessor or bare owner, is often a municipality, a housing association or, for example, Staatsbosbeheer (the Dutch Forestry Commission).

For the use of the land, you as leaseholder usually pay an annual fee: the ground rent (canon). In some cases this ground rent can be bought out, so that you no longer owe an annual payment.

In the case of leasehold, the notary plays an important role. The notary ensures that the leasehold right is recorded in a legally correct manner and that all agreements are clear to all parties involved.

When purchasing or transferring a home with leasehold, the notary checks, among other things:

• whether leasehold applies and under which conditions;
• exactly what the leasehold deed states;
• which rights and obligations are attached to the leasehold;
• whether additional agreements apply, for example regarding ground rent or the right of superficies.

In addition, the leasehold is always recorded in a notarial deed and registered in the public registers, so that the right is also legally valid and discoverable by third parties.

If you buy a home on leasehold land, it is important that you know exactly what you are buying. You become the owner of the home, but not of the land. This situation must be clearly stated in, among other things:

• the property listing (for example on Funda);
• the purchase agreement;
• the notarial deed of transfer.

The notary ensures that this information is processed correctly, so that you as the buyer are not faced with any surprises.

Leasehold is always subject to leasehold conditions. These are recorded in the deed of issuance of leasehold and form the basis of the right of use. Sometimes general leasehold conditions also apply, for example in the case of municipal leasehold.

These conditions state, among other things:

• who the ground lessor is;
• the duration of the leasehold;
• the amount and adjustment of the ground rent;
• rules on the transfer of the leasehold right;
• maintenance obligations and cost allocation;
• rules of use and conduct for the leaseholder.

Leasehold can affect the value, financing and sale of a home. Thanks to the involvement of the notary, all rights and obligations are clearly recorded and you know exactly where you stand legally. This way you avoid uncertainty and unexpected obligations.