Different concepts exist for land ownership terminology in property law, both for land that is owned outright and for land owned partially to certain degrees. Concepts and terms exist that also attach to land that is merely temporarily leased. Thus, the respective concepts of freehold and leasehold estates.
The term “estate” probably sounds old-fashioned to anyone who owns a house today. The term tends to conjure up mental images of large, expansive estates from the past. To some extent, there is truth to the assumption. American common law derives from England, and that includes laws about property that once related back to large, English estates of the past. The United States kept both their laws and much of their terminology as a result. That’s where we ultimately get the term estate for years.
An estate for years falls into the leasehold estate category. It can also be referred to as an estate for term and a tenancy for years. Instead of being a freehold estate, which is owned outright, the leasehold estate usually is leased out by the original owner to a tenant for a specific time period. A landlord who has leased out his or her home as an apartment to a tenant is a prime example.
This type of lease allows the original property owner to determine both a beginning and ending date for the tenancy to take place. It is not necessary for a landowner to send out any sort of vacate-notice once the term is up as a result. The date the tenant is required to move out of the leased premises simply becomes the ending date. Tenants in these lease types have the added protection of knowing their lease cannot be terminated before the specific ending date unless it is agreed to in advance by both parties. Tenants can read through all of the landowner’s rights and obligations within the lease documentation itself.
The rights of possession and use are what are guaranteed by a leasehold estates, but the right of actual ownership belongs to the property’s original owner alone. The most common type of leasehold estate remains the estate for years, but there are three other options to consider. A lease that dictates an automatic renewal of the lease at a specific date, usually from month-to-month, is considered a periodic estate. The estate at will is yet another example, and this lease does not dictate a fixed time period at all. The lease term can endure as long as both parties are still in agreement that they want it to last. Lastly, there is a leasehold estate known as a tenancy at sufferance, created when a tenant remains after the expiration of the lease. When determining whether you want to lease your land to a tenant, you as a landowner may very well consider all of these leasehold options (with the exception of the tenancy at sufferance, of course!).
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