TECHNICAL BULLETIN
ISSUE 31
MAY 2019
LEASEHOLD PROPERTY EXPLORING LEASEHOLD PROPERTY JOE ARNOLD, MANAGING DIRECTOR, ARNOLD & BALDWIN
Leasehold properties are coming under increasing scrutiny and a recent report from NAEA Propertymark found that 94% of leasehold homeowners regret buying a leasehold property. There remain, however, many areas where leasehold properties account for a significant proportion of the housing stock and this is unlikely to change any time soon. So, what do you need to know about leasehold properties? Property law – a quick revision
person and on their death, it would revert back to the ownership of the original grantor. Thus, it was a ‘life estate’. But the transaction could be more complicated, and the grant might include the lifetime of the children or even grandchildren of the original grantee. If the grant could be passed on indefinitely then it became a fee simple – ‘fee’ denoting that it was inheritable and ‘Simple’ denoting that it was not limited in any way.
The law relating to property in England and Wales has its roots in the medieval period and is a product of the feudal system. The terminology we find in modern leases (‘Tenant’, ‘tenancy’ etc.) date back to the ‘tenants in chief’, those loyal chief supporters of the king who were rewarded for their loyalty with parcels of land in exchange for military service. The Crown was at the top of the food chain and still holds some land, for example the foreshore, as an entitlement dating back this far.
Leases grew up outside the feudal system but followed the useful concept of classifying the interest in land for a period of time. So, land might have been let to a farmer on a yearly farming lease.
This medieval system also gave rise to the principle of classifying an entitlement to land in terms of a period of time during which it could be ‘enjoyed’. Where land might have been granted as a reward for personal services it might have only been granted for the lifetime of that
The concept of ‘estates’ rather than ‘ownership’ also emerged since a number of parties could have had an
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