Business, Legal & Accounting Glossary
n. any interest in real property which is a life estate or of uncertain or undetermined duration (having no stated end), as distinguished from a leasehold which may have declining value toward the end of a long-term lease (such as the 99-year variety).
A form of Estate in land that is characterised as not being derived from, or conditional on, the estate of another. Historically a key feature of freehold ownership was the ability to extract Rent from one’s tenants (see: Tenancy). Although historically there were multiple forms of freehold, since the Law Of Property Act (1925) there has been only one: the Fee simple absolute in possession. These days the two terms are synonymous, and the other forms of freehold are obsolete.
It is not the freedom from rent that technically distinguishes a freehold interest from a lesser form of estate, such as a Tenancy, nor the right to enjoyment in perpetuity (because this was not a feature of, for example, a freehold Life estate). One has to ask, then, what real difference existed between, say, the purchase of a life estate and a long Lease established by a fine (see: Fine land and property) The strict distinction seems to be that a lease must be for a specified maximum duration, while the life estate was for life — an uncertain duration. This relatively small technical distinction made one form of occupation freehold and the other leasehold, subject to entirely different sets of obligations and rights. It is for reasons like this that the 1925 legislation rationalized the nature of freehold and leasehold interests.
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This glossary post was last updated: 28th April, 2020 | 2 Views.