What is the difference between freehold and leasehold estate?

The distinction between freehold and leasehold estate primarily lies in the nature of ownership and the duration of rights held. A freehold estate grants the owner permanent ownership of the property, which includes the right to use it indefinitely. In contrast, a leasehold estate involves a contractual agreement that allows the tenant to occupy and use the property for a specified duration, as outlined in the lease agreement. This means that leaseholders have rights to the property only for the duration of the lease, after which ownership reverts to the freeholder.

This fundamental difference underscores how freehold conveyances provide lifetime or indefinite ownership, whereas leasehold agreements have a defined timeframe, limiting the tenant's rights and ownership duration. Understanding this distinction is crucial for anyone engaged in real estate transactions, as it impacts property rights, obligations, and overall investment strategies.