Leasehold

Leasehold is a term that has originated from the feudal agrarian society in the United Kingdom. In this society, peasants worked on the land that belonged to their lord. Modern leasehold is identical in a way that the property is owned by the freeholder, but for an established length of time the leaseholder is guaranteed possession of it by a lease or contract. The leaseholder has to make a commitment to pay for this possession in payments called ground rent.

Leasehold

Leasehold terms can be renewed

Often a leasehold is for extended periods of time, such as 99 years. A leasehold term can also be several hundreds of years long. It is possible that a leasehold can be sold to another person, but it will be transferred with the existing terms; for instance, if there are 70 years left on the leasehold, that is what the buyer purchases. Leasehold terms can be lengthened or renewed, but as this renovation does not take place automatically, so it is required that the leaseholder must negotiate them with the freeholder.

Basic Kind of Leasehold

There are four basic kinds of leasehold that are used today. The most general kind of leasehold is also referred to as a tenancy for years or an estate for years. This is defined as simply a leasehold having a fixed end of tenancy.

tenancy agreement

Tenancy doesn’t require to be measured in years

Despite of its name, a tenancy for years does not require to be for a period measured in years; in fact, it doesn’t need to be for a period measured in standard units of time at all. Despite of whatever is written in the contract, however, the freeholder and leaseholder can agree to terminate the contract early if they are willing.

Periodic tenancy

There is no specified end date for a periodic tenancy, and it may be oral or written. The freeholder  can terminate a periodic tenancy at any time, although they generally must give the tenant a reasonable amount of notice.

Tenancy at will

Tenancy at will is identical, although the tenant has got the same right to cancel the agreement as the freeholder do have. Again, here also a reasonable amount of notice is required.

Tenancy at sufferance

The period that the tenant stays after the end of the lease is a Tenancy at sufferance. Although it is true that the tenant has no legal right to the property, but they are responsible for the rent for whatever length of time the freeholder cannot reclaim possession of the property. Generally a  leasehold is treated as to be a certain degree of ownership of a property, in that way it is considered a fixed asset and it can be used as such in attaining credit or a loan.

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