The term ‘leasehold’ in property law describes a lease from the freeholder of a property that enables the leaseholder to use the property for a specified period subject to conditions set out in the lease in return for the payment of rent. At the end of the lease the premises revert to the freeholder. Leaseholders are sometimes referred to as ‘tenants’.
A leasehold is in contrast to:
- A ‘freehold’ in which the freeholder owns the ‘title absolute’ of the property, that is, the land and any immovable structures attached to it, outright in perpetuity. Freeholders may also be referred to as 'landlords' or 'lessors'. Leaseholders are entitled to know the name and address of their freeholder.
- A ‘commonhold’, which is a form of property ownership for multi-occupancy properties that enables the collective ownership of the freehold of the property as an alternative to long leaseholds.
Commercial leases are likely to be shorter than residential leases, which can last as much as 999 years. Leases may be assignable (often subject to the consent of the freeholder), which means they can be sold in the open market. If the leaseholder is permitted to sell the lease, its value will reduce as the remaining duration of the lease reduces.
A leaseholder may be able to purchase the freehold (this process is known as leasehold enfranchisement). This can be either by agreement with the freeholder, or for houses or flats, can be by right. A leaseholder may be able to purchase a freehold by right if they have owned the lease to a house for at least two years, or if they own a flat, they may be able to buy it collectively with other leaseholders (see Shelter, Buying the freehold of a house for more information). Leaseholders of flats and houses may also have the right to extend their lease, but this can be expensive.
The lease will set out the rights and responsibilities of the parties in relation to:
- Service charges.
- Rent–free period.
- Rent deposit.
- Alterations to premises.
- Responsibility for maintenance, repairs and reinstatement, in particular in relation to the demised premises and the retained parts.
- Right to sublet or assign the lease.
- Use of premises.
- Termination of lease.
See Lease negotiations for more information.
 Related articles on Designing Buildings Wiki
- Buy-to-let mortgage.
- Green lease.
- Ground rent.
- Landlord and Tenant Act.
- Lease Negotiations - Tenants Checklist.
- Leasehold covenants.
- Leasehold enfranchisement.
- Meanwhile use.
- Property guardianship.
- Quantified demand.
- Rent-free period.
- Rent in administration.
- Rent review.
- Restrictive covenant.
- Right to manage.
- Sample retail lease.
- Scott schedule.
- Security of tenure for commercial leases.
- Service charge.
- Shared ownership.
- Short term lets.
- Vacant possession.
- What is a mortgage?
 External references
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