A leasehold is the real estate which is the subject of a lease. The term is often used to describe improvements on real property when the improvements are built on land owned by one party which is leased for a long term to the owner of the building. However, it may also be used to describe a tenancy orf shorter duration, such as a month-to-month tenancy.
As the purchaser of leasehold property, you acquire the right to occupy and use the leased property for the time period stated in the lease agreement. In return for this right, you agree to make rent payments to the lessor and abide by the other terms of the lease. The buyer of residential leasehold property does not own the land and must pay ground rent. The buyer's use of the land is limited to the remaining years covered by the lease. Therefore, the land returns to the lessor, and is called reversion. Depending on the provisions of any surrender clause in the lease, the buildings and other improvements on the land may also revert to the lessor. The use, maintenance, and alteration of the leased premises are subject to any restrictions contained in the lease.
