Leasehold Property refers to a type of property ownership where the buyer (leaseholder) has the right to use and occupy the property for a specified period, as outlined in a lease agreement with the property owner (freeholder or landlord). Unlike freehold ownership, where the owner has full control over the property and the land it sits on, leasehold ownership is temporary and subject to the terms of the lease. Here’s a detailed breakdown of leasehold property:

Key Features of Leasehold Property

1. Lease Agreement
   • A legal contract between the leaseholder and the freeholder.
   • Specifies the duration of the lease, rights and responsibilities of both parties, and any restrictions on use.
2. Lease Term
   • The length of time the leaseholder has the right to occupy the property.
   • Common lease terms range from 99 to 999 years, but shorter leases (e.g., 50 years) also exist.
3. Ground Rent
   • Annual or periodic payment made by the leaseholder to the freeholder.
   • Amount and frequency are specified in the lease agreement.
4. Service Charges
   • Fees paid by the leaseholder for the maintenance and upkeep of shared areas (e.g., hallways, elevators, gardens).
   • Common in apartment buildings or developments with shared amenities.
5. Ownership Limitations
   • The leaseholder does not own the land the property sits on.
   • Ownership reverts to the freeholder at the end of the lease term unless the lease is extended.
6. Lease Extensions
   • Leaseholders can often negotiate to extend the lease, but this usually involves paying a fee to the freeholder.
7. Subletting
   • Leaseholders may be allowed to sublet the property, depending on the terms of the lease.

Types of Leasehold Property

1. Residential Leasehold
   • Common for apartments, condominiums, and some houses.
   • Leaseholders own the unit but not the land or building structure.
2. Commercial Leasehold
   • Used for office spaces, retail stores, and industrial properties.
   • Businesses lease the property for a fixed term to operate their business.
3. Long Leasehold
   • Leases with terms of 99 years or more.
   • Often treated similarly to freehold properties in terms of value and marketability.
4. Short Leasehold
   • Leases with terms of less than 80 years.
   • Properties with short leases can be harder to sell or finance.