When it comes to the legal concepts in commercial real estate, there are a lot of things at play, and it becomes difficult for someone to stay updated on all of them all the time. So, regardless if you are just here to refresh your memory or to learn something new about the commercial real estate industry, this concept will surely help you make better deals. How? Well, knowing legal concepts can help you understand agreements better. It will also save you a trip to your lawyer to try to understand what is being stated in the agreement. So, now that you are aware of the benefits, let’s dive right into the concept itself, which is a leasehold estate.
What Is The Meaning Of A Leasehold Estate?
A leasehold estate is a type of lease agreement between the landlord and the tenant where the property is leased to the tenant for a specific period. However, the landlord still maintains the ownership of the property. Even though these leases are not widely used anymore, they are still useful to learn about because they come in various types, which are still used today.
During the period of the lease, the tenant is free to use the property in any way they please. Since this contract can be made in different ways, the period of the lease is defined by the type of contract you have entered. So, let’s take a look at three different types of leasehold estate contracts.
Types Of Leasehold Estate Agreements
Periodic Tenancy Leasehold Estate Agreement
A periodic tenancy is a type of agreement where there is a start date to the agreement but not an end date. This can be termed as a monthly tenancy agreement where the lease is automatically renewed every month unless the tenant or the landlord wants to cease the agreement. To cease the agreement, the tenant or the landlord, whoever wants to opt out, needs to provide notice to the other party in due time before vacating the property.
Estate At Will Leasehold Estate Agreement
An estate at will agreement has no expiration date, only a date of commencement. However, this agreement only continues as long as the landlord wishes. A tenant can also terminate the agreement. Both parties have to provide adequate notice to the other before such termination can be performed. An estate at will leasehold estate agreement is often not accepted as a legal agreement in various places.
Estate For Years Leasehold Estate Agreement
An estate for years agreement has a clearly defined start and end date mentioned on the agreement at the time of signing. This is also known as a fixed contract, as the property is only leased for a fixed period. The period of the lease is defined by two parties and can be for a very long or a very short (less than a year) period as well. Tenants have the opportunity to renew their lease after expiry with the mutual agreement of the two parties; however, in such a case, a new agreement needs to be created.
Conclusion
Knowing about the leasehold estate agreement will help you make better deals as a landlord and also as a tenant. You will also be able to learn more about your rights as any of the parties in this agreement, which would help you ensure your interests are protected for the duration of the contract. So, if you are interested in learning more about a leasehold estate agreement, be sure to visit this link.
