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Leasehold Estate

Leasehold Estate

In the common law system, leasehold estate refers to the ownership for temporary rights of holding property or land, while the tenant or lessee holds the right of real property with a certain type of title from the landlord or lessor. However, while the tenant holds the right of real property, leasehold estate is generally classified as a personal property.

A leasehold is a type of property tenure or land tenure in which a party purchases rights to occupy the building or land for a specific time frame stated. A leasehold estate is able to be purchased and sold on open market due to leases being a legal estate. Therefore, leaseholds are different compared to a fee simple or free hold in which property ownership is bought directly and held afterward for the length of time indeterminately defined. Additionally, a leasehold estate is different from tenancy, in which property is rented out based on a periodic basis, typically monthly or weekly.

The leaseholder has rights for remaining an assured tenant providing agreed rent payments to the owner until the end of the lease period. Lease periods are commonly measured in decades and/or centuries, with a 99-year lease being rather common place. The lease contains all terms of agreement, including property law and contract elements.

On occasion, the term estate for years could be used to reference leasehold estates for any certain length of time. The wording ‘years’, can be misleading in many cases. Furthermore, estate for years will not be renewed automatically.

Additionally, the terms ‘leasing’ and ‘lease’ are commonly used to express longer more specific lengths of time, similar to ‘rental’.


Law which governs relations between landlords and tenants has been traced back in history to the Code of Hammurabi. Although, during the Middle Ages in England, common law between landlord and tenant evolved. These evolved laws continue to retain various archaic principles and terms relative to an agrarian economy and feudal social order, whereas the land had been primary economic assets and land ownership was the main source of status and ranking.

A modern leasehold estate falls into one of four classifications:

  • Periodic tenancy
  • Tenancy for years (or fixed-term tenancy)
  • Tenancy at sufferance
  • Tenancy at will

There are types no longer utilized within modern law, including burgage and socage.

When the property owner permits an individual or multiple people to use the land for a fixed length of time, the individuals are referred to as ‘tenants’, and the property becomes a leasehold estate. The relation between the landowner and resident is referred to as ‘tenancy’. The tenant is responsible for paying rent to the property owner.

A lease hold may include buildings and various types of improvements to the land. Tenants are able to do one or more of the following with the leasehold: live, farm, or practice trade on the leasehold estate.

Rudgard, Olivia (11 February 2017). “Government to act on leasehold rip-offs”Daily Telegraph. Retrieved 23 April 2017.