Leasehold or Fee simple?

[Joanne Rauenzahn]

Well this might become interestng. Since we are dealing with real property interests in appraising and not just real estate, why is it that you would not consider a leasehold estate in some interest other than the land?

can you give me an example?

I am just saying that as far as underwriting that is the only *leasehold interest" I am familair with.

 

[xm72mhd]

can you give me an example?

I am just saying that as far as underwriting that is the only *leasehold interest" I am familair with.

Condo, office, apartment, house.

 

[Fred]

No, it does NOT refer to a tenants interest in a conventional LEASE as a leasehold interest.

No word games are necessary. It seems like you are saying that a tenant’s interest is not a leasehold or may not be leasehold. That’s why I asked what you think it should be called.

From Black’s Law Dictionary
Leasehold “…is a tenant/lessee’s posessory estate in land, granted by a landlord/lessor who holds an estate of larger duration.”

From your Bible.
“The leasehold estate is the lessee’s, or tenant’s estate.”

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Everything about appraisal from A to Z is covered, so that's like calling the most current encyclopedias "a beginner's book."

Maybe it’s A-Z for you. That’s fine. But it’s more like A-B for me. The capitalization chapters have long been excellent, but much of those parts are mostly incorporations of parts of the Ellwood book and the Akerson book. Many important topics that are part of daily general practice are not even mentioned in that book.

For your analogy: an “encyclopedia” is a beginner’s book. By the time you get to high school term papers, encyclopedias don’t cut it any more. The encyclopedia will tell you who Einstein was, but if you need to master his unified field theory, you need something more than a beginner’s book.

 

[xm72mhd]

LEASEHOLD is a form of ownership with a revertionary clause. A conventional "lease" is a LICENSE to USE certain aspects of the bundle of rights BY the OWNER. It does NOT convey those rights, but grants USE of them. It's kind of like buying a Burger King franchise: you do NOT OWN the Burger King rights but are just granted a license to use the name. Personally, I prefer my bathroom analogy above. Rights of Use and Rights of Ownership are two distinct things, even generally governed by different laws.

Read carefully and with an open mind, JD. Others are trying to tell you that your analogies and thoughts on the subject of leasehold and leased fee may be heading you into derail. If thoughts of others won't carry the day, then read your "bible" very carefully, with no preconceptions. Question what the text is saying, but don't assume it is saying what you already think it says.

One of the fundamental orientations you must make is that more than use is involved here. It's possession of some part of the fee, which is usually exclusive, but doesn't have to be. A leasehold could possibly include a possessory interest without the right to use.

 

[jdbiggers]

So,
All men are mortal.
Socrates ws a man.
Therefor all men are Socrates.

No, I don't think so.

Yes, a Leashold Interest describes those interest by a tenant.

BUT, a tenant is not exclusive to the definition of one who is granted a leashold interest. A conventional lease is NOT a grant of TITLE to a leashold estate. If it were, then explain why the laws that govern these are separate from real property laws. As a landlord, I do not have any less rights than I had before I rent my property. The contract (lease) with my tenant states that I will permit use and, under separate laws of necessity, not bother or exercise my full rights in a manner which may disrupt my tenants rights, but does NOT mean I have surrendered those rights. Tenant rights under conventional leases are giverend by separate provisions of law in each state. That's a FACT.

Further, there is a difference, when talking specifically about the topic that statrted this thread, between what is referred to a Leasehold RIGHTS and a Leasehold ESTATE. The owner, as described by the person who started this thread, still owns FEE SIMPLE interest in the subject, including the right to convey. Therefor, the FEE SIMPLE box should be checked since it is that parties interest that is being evauated.

One of the most common cases of this and confusion became part of the New England Baptist Hospital case because througthout the case, the NEBH was referred to as being a simple tenant in the briefs. This caused much confusion in the courts for many years. So, people referred to all leases as leases and not the potential licenses that they may be, such as in a conventional lease agreement. It turns out, however, that the NEBH WAS, in fact, granted a Leashold DEED.

We've gotten to a point in society where we use terms interchangeably that it causes confusion. A right is an interest, but it doesn't make it a real property interest even if it is an interest in real property. Thank the lawyers for this. Kind of like how we call all laminate countertops "Formica," when Formica is a brand. We use the word for convenience, and it gets screwed up.

Way back when, when the terms were created, a third term existed: "small estate," which referred to a tenants interest.

Think about the very terms "real property" and "real estate." Estate in terms of what a person owns, not specific to "real estate" (think of a person and their will, assetts, liabilities, etc.), includes things you can touch and things you can't. Property means something tangible. So why is it that real property includes things you can't touch, and real estate is things you can? Lawyers! - And why I left law school in my second year. Even THOSE definitions have changed throughout the centuries.

Nevertheless, most states see a conventional lease agreement as a license under law, not a conveyance of title, despite the throwing around of terms. That doesn't mean the license has no value.

This is why generative rhetoric should be be taught in publik skules and calajuz.

JD

 

[xm72mhd]

As a landlord, I do not have any less rights than I had before I rent my property.

Logical conclusion- leasing increases real property rights. That has to be where this is going.

I just learned something, but it wasn't about real property interests.

On second thought, I'll read the "bible."

 

[Randolph Kinney]

license
1. For real property, a personal, unassignable, and typically revocable privilege or permit to perform some activity on the land of another without obtaining an interest in the property.
2. A formal agreement from a lawful source that allows a business or profession to be conducted, e.g., a franchise.
3. Government permission to conduct an activity. See also easement.

lease
A written contract in which the rights to use and occupy land or structures are transferred by the owner to another for a specified period of time in return for a specified rent.

leased fee interest
An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease.

leasehold interest
The interest held by the lessee (the tenant or renter) through a lease transferring the rights of use and occupancy for a stated term under certain conditions.

fee simple estate
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

A leasehold estate is an ownership interest in land in which a lessee or a tenant holds real property by some form of title from a lessor or landlord.

Leasehold is a form of property tenure where one party buys the right to occupy land or a building for a given length of time. A lease is a legal estate, leasehold estate can be bought and sold on the open market and differs from a tenancy where a property is let on a periodic basis such as weekly or monthly. Until the end of the lease period (often measured in decades - a 99 year lease is quite common) the leaseholder has the right to remain in occupation as an assured tenant paying an agreed rent to the owner. Terms of the agreement are contained in a lease, which has elements of contract and property law intertwined.

 

[jdbiggers]

Randolph, than you very much. Title is the KEY. Whether recorded or not, TITLE is the key element of distinction, although we use the term "leasehold" to it's most loose definition. I really hope you helped a lot of people see the difference between a periodic tenancy (whether it be weekly or 25 years) and a tenant.

But, I do understand the confusion. Like I said, we use terms so interchageably it gets confusing.

Sorry, but, as you can seem by my posts on this and other threads, law school had taught me to argue through analogy and metaphor, which can be lost on some people. Your approach is much better, and I thank you.

JD

 

[Randolph Kinney]

Randolph, than you very much. Title is the KEY. Whether recorded or not, TITLE is the key element of distinction, although we use the term "leasehold" to it's most loose definition. I really hope you helped a lot of people see the difference between a periodic tenancy (whether it be weekly or 25 years) and a tenant.

But, I do understand the confusion. Like I said, we use terms so interchageably it gets confusing.

Sorry, but, as you can seem by my posts on this and other threads, law school had taught me to argue through analogy and metaphor, which can be lost on some people. Your approach is much better, and I thank you.

JD

You are welcome.

The main difference between license and leasehold? A license is not assignable; you can't sell or give away the use to someone else. Therefore the tenant's interest is not transferable. Also, a lease has elements of contract and property law intertwined. It does not necessarily mean you have created a leasehold estate.

 

[moh malekpour]

leased fee interest
an ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease.

here is a scenario: I own a fee simple ownership on my home, I rent it to a tenant on month to month basis for $1000 per month. You get an assignment to appraise my home on the last day of the month. Are you going to appraise it as a leased fee estate because it is rented on month-to-month basis? Yes, I have given the tenant the right to occupy or use my property but at the same time, I have the right to take away that right by giving the tenant a notice or just let the one month expire and not to renew the rent.