4 Types of Leasehold Estates

A leasehold agreement gives rise to a situation where the lessee gets a temporary right of ownership to a property. In effect, the lessee can exclusively occupy and make use of the leased property. Lease agreements can have different terms. Some can extend for several years, while others last only for a few weeks. Here are the basic types of leases that you should know about.

1. Tenancy for Years

This type of leasehold arrangement has a fixed term and often lasts for several years. In a tenancy for years, the lease is set for the long term, but there are expressly specified starting and ending dates. The agreement can be prematurely terminated if there has been a breach in the lease contract, or if certain pre-agreed conditions events have occurred. Due to the fact that this type of leasehold can run for several years, you must have a written agreement with the lessor or property owner. A written contract is vital in meeting the provisions contained in the Statute of Frauds.

2. Periodic Tenancy

In this type of agreement, the lease term can run from year to year or month to month basis. Sometimes there are even arrangements that last only on a week to week basis.  Usually, the amount of the lease payment given by the lessee will be the basis of determining the term of the periodic tenancy. The landlord or lessor can end the lease agreement at anytime, provided that the tenant has been given prior notice. For a year to year contract, the termination notice must given at least six months before the actual termination of the leasehold agreement.

In a tenancy for years, the lease term runs for several years. On the other hand, a periodic tenancy will typically have a shorter lease period.  However, a tenancy for years is automatically converted into a periodic tenancy if the long term lease agreement has not been set in a written contract.

3. Tenancy at Sufferance

In a tenancy of sufferance, the term of the lease ends only when the landlord or property owner asks the tenant to leave. Just like other types of leases, a tenancy at sufferance has a specified period or term. However, the tenant in this type of lease agreement can continue to occupy the property even if the leasehold term has expired. Consequently, the tenant will continue to pay the lease until such time that the landlord terminates the tenancy.

4. Tenancy at Will

Tenancy at will gives the right to terminate the lease to both the landlord and the lessee. The termination of the lease is valid provided that prior notice is issued and a reasonable time is provided for by the party that initiated the lease termination. This type of lease commonly occurs when there is no written contract. More often than not, the right to terminate is exercised by either the lessee or landlord only if there is cause. In some cases, a tenancy at will is automatically terminated by operation of law.

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