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Lease glossary

Leasehold

A leasehold is the right to occupy and use land or a building for a fixed period under a lease, while someone else owns it outright. Outright ownership is called freehold, and when the lease ends, possession goes back to the freeholder.

Also called leasehold estate

Example

A condo building sits on land leased for 99 years starting in 1990, so the land lease ends in 2089. Buyers of a unit in 2026 get a leasehold with 63 years left, and lenders often want enough years remaining to outlast the mortgage by a wide margin. A house bought together with its land is freehold: no end date and no ground rent.

In a lease it looks like…

Landlord leases to Tenant the land described in Exhibit A for a term of 99 years. Tenant shall own all improvements it builds during the term, which shall become the property of Landlord when the term ends.

Good to know

In the US, long leaseholds are most common under ground leases, in parts of Hawaii and in commercial property; renting an apartment is also a leasehold, just a short one. The term is more familiar in the UK, where many flats are sold as long leaseholds.

Plain English, not legal advice. Last reviewed September 29, 2026.