What Is a Leasehold Property?

Leasehold property is a type of real estate that is leased to another individual. With this type of real estate transaction, there will be a lessee and a lessor. The lessor is the individual that is the owner of the property, and is offering it for lease. The lessee is the entity that is leasing the property from the lessor.

Rental arrangements

With this type of arrangement, the lessee agrees to rent the property from the lessor for a specific amount of time. They will also agree to pay a certain amount of rent on a monthly basis in most situations. During the lease term, the lessee will have the right to use the property. They typically cannot improve or change the property without the expressed consent of the lessor. The lessee also cannot transfer ownership of the property to anyone else. In some cases, they could sublet the property to another entity.

At the end of the lease, the lessee and lessor could decide to renew the lease. Some leases are set up to automatically renew if neither one of the parties change the terms before it goes into effect. Other leases automatically terminate at the end of the lease term. 

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