Leasehold Estates and Prescott AZ Real Estate
April 17th, 2007
Leasehold estates are ownership rights given to tenants on Prescott AZ real estate for a limited duration through a lease agreement.
A lease has two specific elements that are noteworthy:
- it is a contract
- it transfers ownership interest (the right of possession) in return for a rent payment and other obligations
Reversion rights and the statue of frauds
The owner of the property, (the landlord) will always have reversion rights to take possession of the property. The landlord
is referred to as the lessor, while the tenant is the lessee. In order for a lease period of longer then one year to be enforceable, the statue of frauds requires that it be in writing; on the otherhand an oral lease of one year or less may be enforceable.
Since we’re dealing with real property and the stakes are very high, most of the time for the owner of the property, it’s
encouraged to have everything in writing be it more or less then a year.
Estate for Years
An estate for years is the most common type of leasehold estate. This type is always for a definitive period of time and the
lessee is required to vacate the property at the end of the lease. There is no requirement on the part of the lessor to
provide the lessee with a termination notice because this type of estate has a specific termination date built into it.
Although called an estate for years, the length of this estate can be for any fixed period of time like a month, six months or
a year. It could be more accurately referred to as an estate for a stated period.
If the property is sold or the tenant or landlord die, the leasehold does not terminate.
If the lessee is to die the leasehold estate goes to the tenant’s heirs. This type of leasehold can be legally be terminated
with the consent of the parties prior to the actual termination date.
Entry Filed under: Prescott Arizona AZ Real Estate Market
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