Property No 7 - Estates in Land

In English land law a parcel of "land" (which includes any buildings) is owned as an "estate".  Colloquially, the estates are the  "freehold"  and the "leasehold". (They have statutory definitions.)

Each has its own set of specific qualities but the essential differences are as follows:

• a leasehold estate is "carved out" of a freehold estate when the freeholder grants a lease to the leaseholder;
• the grant of lease is for a term (or period) of years (it is useful to bear in mind that periodic (weekly, monthly etc) tenancies are common but are distinguished from a lease of a term of years);
• a lease is held from the freeholder on certain terms and conditions;
• a leaseholder (tenant) pays rent on an annual or lesser periodic basis, eg monthly.

Thus, a leasehold is a contract between the landlord and the leaseholder (tenant) by which the landlord allows the tenant possession of "land" on certain terms and conditions where in essence:

• the tenant agrees to a) pay the rent,  b) to comply with the terms and conditions applying to him/her, and to give up possession at the end of the lease; and,
• the landlord agrees to comply with the terms and conditions applying to him/her, and to give the tenant 'quiet enjoyment'.

It may be noted that the above is a brief look at the fundamentals - there is much detail not considered and, in addition, statutes impose many other obligations on the parties, particularly landlords.