Tenancies in Real

Estate
Learning the basics.
Tenancies in real estate refer to the agreements
or contracts between a landlord and a tenant,
detailing the terms and conditions for renting a
property.
Understanding
Tenancies
Tenancies define the rights of possession for tenants and
landlords. Different types of tenancies exist, each with
unique features such as the duration of the agreement and the
responsibilities of each party.
 Fee Estates Unbundling the Rights

A fee owner has the exclusive right to use and enjoy the property (surface,
sub-surface and air space). As long as local ordinances such as building
codes and zoning regulations are obeyed, a fee owner may do as they please
with their property.
Separate Interest

1. Mineral rights - are property rights to exploit an area for the minerals it harbors. Mineral rights can be
separate from property ownership (see Split estate). Mineral rights can refer to sedentary minerals that do
not move below the Earth's surface or fluid minerals such as oil or natural gas. A mining lease may be
granted on mining claims located on private lands: Provided, That the applicant shall submit a written
authority of the landowner.
2. Surface rights refer to those ownership rights in a parcel of real estate that are limited to the surface. It
does not include air rights or subsurface rights.
3. Right to the air space- Air rights are the property interest in the "space" above the earth's surface.
Generally speaking, owning, or renting, land or a building includes the right to use and develop the space
above the land without interference by others.
4. Drilling rights (profit a prendre) – the right to remove minerals from another’s real estate. A
servitude/subservience which resembles an easement and which allows the holder to enter the land of
another and to take some natural produce such as mineral deposits, fish or game, timber, crops or pasture.
Note: An easement is a nonpossessory right to use and/or enter onto the real property of another without
possessing it. It is "best typified in the right of way which one landowner, A, may enjoy over the land of
another, B".
Life Estates and the Life Tenants
1.A life estate is a form of joint ownership that allows one person to remain in a house until his or her
death, when it passes to the other owner. Life estates can be used to avoid probate and to give a house to
children without giving up the ability to live in it.
2.One who holds a life estate. A life tenant has all rights associated with ownership of real property, except
the right to sell the property, until his/her (or someone else's) death. Upon the death of the life tenant, the
property reverts back to the owner, or to a third party designated by the owner.
3.The holder of a life estate based on their life has the right of possession until death, as though they were
the owner in fee. He/she is responsible for taxes, maintenance and a reasonable amount of property
assessments.
4. The holder of a life estate may not impair the fee interest. A fee interest is the legal possession of both
the surface and mineral rights for a property. The owner of a fee interest may choose to sell the surface
rights, but retain the mineral rights – or vice versa. An oil and gas firm does not usually acquire a fee
interest. Note: Impairment – the act or diminishing the value of a fee interest
Leasehold Estate by Tenants

Leasehold Estate
A Leasehold Estate is an ownership of a temporary right to hold land or property in which a lessee or a
tenant holds right of real property by some form of title from a lessor or land lord. Although a tenant does
hold rights to real property, a leasehold estate is typically considered personal property.

Tenancy
Tenancy is the occupancy or possession of land or premises by lease. The occupant, known as the tenant
must acquire control and possession of the property for the duration of the lawful occupancy. In exchange
for the right to occupy and use the property, the landlord is entitled to rental income from the tenant during
the period of tenancy.
 Types of Leasehold

• Fixed-term Tenancy

A fixed-term tenancy, simply known as a lease and legally called an estate for year. It is
an agreement lasts for a set amount of time – eg, one year. You must include the length
on the tenancy agreement. You can’t give notice to end a fixed-term tenancy early. You
should make sure a fixed-term is right for you before you sign the agreement. Once the
term ends, the tenancy will become periodic. If you don’t want this to happen, you’ll
need to give notice in writing at least 21 days before the term ends
 Types of Leasehold

2. Periodic Tenancy

A periodic tenancy agreement has no end date. It continues until either the tenant or the
landlord gives written notice to end it, usually referred to as a rental..
 Types of Leasehold

3. Tenancy at will

A tenancy-at-will is a property tenure that can be terminated at any time by either the
tenant or the owner/landlord. It exists without a contract or lease and usually does not
specify the duration of a tenant's rental or the exchange of payment.
 Types of Leasehold

4. Tenancy at Sufferance

Tenancy at sufferance is an agreement in which a property renter is legally permitted to

live on a property after a lease term has expired but before the landlord demands the
tenant vacate the property. If a tenancy at sufferance occurs, the original lease
conditions must be met including the payment of any rents.
 Leasehold conveying special uses
1. A ground lease is an agreement in which a tenant is permitted to develop a piece of property during the lease
period, after which the land and all improvements are turned over to the property owner. The rent is based on the
rental value of the land, whether the parcel is vacant or improve.

2. A master lease in real estate is an agreement where you lease an income-producing property as a single tenant
and then sublease it to occupant tenants to get rental income. Under the master lease option, the owner of the
property will have no other responsibilities for the property. Sometimes called a sandwich lease.

3. Sandwich lease is a lease agreement in which a lessee subleases a property to a third party. In a basic sandwich
lease, a person leases a property from the landlord and then sublets the property to a third person.
 Leasehold conveying special uses
4. A sublease is the renting of property by a tenant to a third party for a portion of the tenant's existing lease
contract. Even if a tenant subleases a property, the original tenant is still liable for the obligations stated in the
lease agreement, such as the payment of rent each month.

5. Special-use lease or Farm lease - Leasing land to another person for grazing/cropping purposes can benefit both
the landowner and lessee by allowing an additional source of income for the landowner and by permitting the
lessee to run livestock on land without incurring the long-term debt associated with purchasing property
 Thank You
We appreciate your interest in Tenancies in Real Estate.