Leasehold is an agreement between a lessee and a lessor where the owner of the property sells out the property to another person for a certain period of time. One good example of leasehold property is the housing compounds which are leased for fifty or more years. It means the compound is sold to another person for some time but after the time is up the former will be the owner once again if the lease is not extended or some other arrangements are not done. The right to using that property for that period of time is agreed by both the parties and if there is a breach in the contract then the former owner will prevail in getting the property back. In cases of leasehold property there is no absolute owner of the property. People would never have the right to buy out the property. The person who has taken the lease will have the privilege and the right to be in that property for the agreed period of time. Generally a property is leased for 999 years but the time changes according to different countries and regions and laws.
If the lease is agreed for a short period of time then it can be renewed under mutual consent. There are several types of leasehold estates. Some of them are as follows:
• The most common are the period tenancy where the lessee and the lessor will be able to renew the contract after the period is over. If there is no agreement then the lease contract can be terminated for further use.
• Fixed term lease is different from period tenancy. In this case there are few restrictions which the landlord and the tenant has to agree. The terms and conditions are mentioned in the documents for the lease which is about to take place.