A leasehold estate is an ownership interest in land in which a lessee or a tenant holds real property by some form of title from a lessor or landlord.

History

Landlord-tenant laws existed in places such as Andalusia, and laws governing such relationships can be found in the Code of Hammurabi. However, the common law of the landlord-tenant relation evolved in England during the Middle Ages. That law still retains many archaic terms and principles pertinent to a feudal social order and an agrarian economy, where land was the primary economic asset and ownership of land was the primary source of rank and status. See also Lord of the Manor.

Modern leasehold estates can take one of forms the fixed-term tenancy or tenancy for years, the periodic tenancy, the tenancy at will, and the tenancy at sufferance, all discussed below. Forms no longer used include socage and burgage.

When a landowner allows one or more persons, called "tenants," to use his land in some way for some fixed period of time, the land becomes a leasehold, and the resident (or worker) - landowner relation is called a "tenancy." A tenant pays rent (a form of consideration) to the landowner. The leasehold can include buildings and other improvements to the land. The tenant can do one or more of: farm the leasehold, live on it, or practice a trade on it.

Tenancy was essential to the feudal hierarchy; a lord would own land and his tenants became his vassals. However, it still happens today in many parts of the world. In the U.S.A., there are food co-ops which supply tenants with a place to grow their own produce. Rural tenancy is also a common practice. Under a rural tenancy, a person buys a large amount of land and the rural community uses it agriculturally as a source of income.

Fixed-term tenancy or tenancy for years

A fixed-term tenancy or tenancy for years lasts for some fixed period of time. Despite the name tenancy for years, such a tenancy can last for any period of time even a tenancy for one week would be called a tenancy for years. At Common law the duration did not need to be certain, but could be conditioned upon the happening of some event, (e.g. "until the crops are ready for harvest", "until the war is over"). In many jurisdictions that possibility has been partially or totally abolished.

Termination of a fixed-term tenancy

The tenancy will come to an end automatically when the fixed term runs out, or, in the case of a tenancy that ends on the happening of an event, when the event occurs. It is also possible for a tenant, either expressly or impliedly, to give up the tenancy to the landlord. This process is known as a surrender of the lease.

Periodic tenancy

A periodic tenancy, also known as a tenancy from year to year, month to month, or week to week, is an estate that exists for some period of time determined by the term of the payment of rent. An oral lease for a tenancy of years that violates the Statute of Frauds (by committing to a lease of more than--depending on the jurisdiction--one year without being in writing) may actually create a periodic tenancy, the construed term being dependent on the laws of the jurisdiction where the leased premises are located. In many jurisdictions the "default" tenancy, where the parties have not explicitly specified a different arrangement, and where none is presumed under local or business custom, is the month-to-month tenancy.