A tenant's contractual right to occupy and use a property for the duration of the lease term. The leasehold is a possessory interest; the tenant controls the space without owning the underlying real estate. When the lease ends, the leasehold expires and the property reverts to the landlord.
A leasehold estate is a form of real property interest that grants the tenant exclusive possession for a defined period in exchange for rent. Unlike a freehold (fee simple) interest, the leasehold is time-limited and does not convey ownership of the land or improvements. Leaseholds can be assigned, subleased, or mortgaged (with landlord consent in most cases). In commercial real estate, the value of a leasehold interest depends on the remaining term, below-market rent, and renewal options.
A landlord sells the building and the new owner attempts to terminate tenant leases by claiming the prior owner's leases were personal agreements. In reality, properly executed leases run with the land; the leasehold interest survives a change of ownership and binds the new landlord.
Ensure your lease is properly recorded or that the landlord provides an SNDA (Subordination, Non-Disturbance, and Attornment) agreement. This protects your leasehold interest in the event of a foreclosure or building sale, ensuring you can continue occupying the space under the original lease terms.
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
