Also known as: estates less than freehold · leasehold estate · nonfreehold estate
Written by attorneys · grounded in primary & secondary sources — see below
A possessory estate in land whose duration is fixed in time or computable by calendar units rather than measured by a human life. Such estates arise from landlord-tenant relationships and include terms of years, periodic tenancies, and tenancies at will.
Elena Estrada leased a retail storefront from Everest Holdings under a five-year written lease that included an option for Elena to purchase the building at a fixed price. When Elena attempted to exercise the option twelve years later, Everest Holdings refused on the ground that the option had expired. The court applied the rule governing options tied to leasehold estates and upheld the exercise because the leasehold duration controlled the option's life.
Eric Espinoza leased a warehouse from Emerald Enterprises for a ten-year term. During a citywide fire, officials ordered the building demolished to stop the blaze. Eric's leasehold interest was destroyed along with the structure. Because the interest was an estate less than freehold, Eric could pursue compensation only for the remaining lease term rather than for a fee interest.
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An estate less than freehold has a duration fixed by calendar time or recurring periods and arises only in landlord-tenant relationships. A freehold estate is measured by a human life or is of potentially infinite duration and is not created by a lease.
No. When a tenancy is terminable solely at the will of one party and is not otherwise structured as an estate for years or periodic tenancy, it is treated as a freehold estate rather than a nonfreehold estate.
The duration of an option appurtenant to a leasehold estate is governed by landlord-tenant law rather than the general reasonable-time rule that applies to standalone options.
…described herein for a term ending more than five years after any given date the owner of the reversion and the owner of the leasehold estate together shall be deemed to be the owners of such parcel on such given date within the meaning of this contract, and whenever the signature of the owner of such parcel shall be required on…