Leasehold Property

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. 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. Ground Rent Annual or periodic payment made by the leaseholder to the freeholder. Amount and frequency are specified in the lease agreement. 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. 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. Lease Extensions Leaseholders can often negotiate to extend the lease, but this usually involves paying a fee to the freeholder. Subletting Leaseholders may be allowed to sublet the property, depending on the terms of the lease.