Classes of occupation

The rights and obligations of a person occupying a home will depend on what class of occupation they enjoy. The main classes of occupation are as follows:

• Freehold - outright and perpetual ownership of property, potentially subject to specific restrictions depending on the legal title to the property and specific legislation. The right to occupy freehold property can only be affected in limited circumstances (e.g. compulsory purchase and/or repossession.)
• Commonhold – a collective freehold where the rights and obligations are set out in a separate commonhold community statement.
• Long Leasehold – a lease granted for a term of 21 years or more when initially created and for which a premium and a ground rent are usually paid.  It provides greater security and more substantive rights than short term lettings. 
• Residential tenancies – either periodic or for a fixed-term in return for payment of rent. 
• Licence to occupy – does not create any estate or interest in the land. 

The Renting Homes (Wales) Act 2016, once fully enacted, will create a new class of occupation for those under a tenancy or a licence in Wales, known as an “occupation contract”.