{"id":24860,"date":"2025-07-10T10:12:31","date_gmt":"2025-07-10T14:12:31","guid":{"rendered":"https:\/\/www.zolo.ca\/blog\/?p=24860"},"modified":"2025-07-24T09:42:59","modified_gmt":"2025-07-24T13:42:59","slug":"leasehold-meaning","status":"publish","type":"post","link":"https:\/\/www.zolo.ca\/blog\/leasehold-meaning","title":{"rendered":"What Is a Leasehold Property"},"content":{"rendered":"\n\n\n<p>Although home prices in many areas of Canada have stabilized from the previous record-breaking growth, with an <a href=\"https:\/\/www.crea.ca\/housing-market-stats\/canadian-housing-market-stats\/national-price-map\/\">average home price<\/a> of $691,299, buying a home in this country isn&#8217;t easy. When you are finally ready to make an offer on a home, it&#8217;s essential to pay attention to whether the property is freehold or leasehold.<\/p>\n\n\n\n<p>But what is a leasehold property, and how does that affect your rights as an owner? Leasehold properties have many pros and cons, and it\u2019s essential to understand your contract before you purchase a home.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"key-takeaways\">Key Takeaways<\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>When you purchase a leasehold property, you own the dwelling or unit but not the land<\/li><li>You may need to pay monthly maintenance fees, depending on your contract<\/li><li>Getting a mortgage for a leasehold property may be more difficult<\/li><\/ul>\n\n\n\n<section class=\"bg-white border-t border-b border-blacklight my-12 md:my-16 sticky md:relative top-0 md:top-auto z-10 md:z-auto alignwide  wp-block-zolo-block-toc \" aria-hidden=\"true\"><div class=\"wrapper relative max-w-2xl mx-auto md:py-8 flex flex-col flex-shrink-0 max-h-screen md:max-h-none\"><input type=\"checkbox\" id=\"toc-toggle\" class=\"hidden\"\/><label for=\"toc-toggle\" class=\"flex justify-between cursor-pointer md:cursor-auto py-4\"><div class=\"toc-title leading-normal font-medium m-0\">In this article<\/div><svg class=\"w-6 h-6 fill-current text-blue md:hidden transition-transform duration-150 ease-in-out\" viewbox=\"0 0 24 24\"><path d=\"M22 12c0-5.5-4.5-10-10-10S2 6.5 2 12s4.5 10 10 10 10-4.5 10-10zM6.9 10.9l1.4-1.4 3.7 3.7 3.7-3.7 1.4 1.4L12 16l-5.1-5.1z\"><\/path><\/svg><\/label><nav id=\"toc-nav\" class=\"zolo-toc-nav max-h-0 md:max-h-full overflow-y-auto scrollbar-hidden overscroll-none\"><ul class=\"zolo-toc-list my-4\"><li><a class=\"entry-title no-underline hover:underline\" href=\"#key-takeaways\">Key Takeaways<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#what-is-a-leasehold-property-agreement?\">What Is a Leasehold Property Agreement?<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#types-of-leasehold-property-agreements\">Types of Leasehold Property Agreements<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#what-are-the-key-aspects-of-a-leasehold-property-agreement?\">What Are the Key Aspects of a Leasehold Property Agreement?<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#pros-of-leaseholds\">Pros of Leaseholds<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#cons-of-leaseholds\">Cons of Leaseholds<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#bottom-line-on-buying-a-leasehold-property\">Bottom Line on Buying a Leasehold Property<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#leasehold-property-faq\">Leasehold Property FAQ<\/a><\/li><\/ul><\/nav><\/div><\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-a-leasehold-property-agreement?\">What Is a Leasehold Property Agreement?<\/h2>\n\n\n\n<p>When you buy a home with a leasehold agreement, you own the building or unit but not the land it sits on. Leasehold agreements on residential properties are more common in mobile home parks, townhomes, condos, or First Nations\u2019 land.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-leasehold-vs-freehold\">Leasehold vs Freehold<\/h3>\n\n\n\n<p>In comparison, with a <a href=\"https:\/\/www.zolo.ca\/blog\/freehold-vs-leasehold\">freehold agreement<\/a>, you own both the building and land outright. Freehold ownership is typically more expensive than leasehold.<\/p>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/how-much-house-can-i-afford\">How Much House Can I Afford?<\/a><\/p><\/section>\n\n\n\n<p>The key differences between leasehold and freehold ownership are the ownership duration, the control over the property, and the financial obligations, such as who pays for maintenance and property tax.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"1047\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2025\/07\/leasehold-vs-freehold-agreement-1024x1047.png\" alt=\"Freehold vs leasehold agreement differences\" class=\"wp-image-24863\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-leasehold-vs-strata\">Leasehold vs Strata<\/h3>\n\n\n\n<p>Strata housing refers to a <a href=\"https:\/\/www.zolo.ca\/blog\/condo-maintenance-fees\">condo<\/a>, duplex, townhouse, or single-family home where homeowners own their individual unit or house and have an ownership interest in the common areas or assets through the strata corporation. In addition, you must pay strata fees (also known as condo fees) to cover the cost of maintaining the amenities and communal areas.<\/p>\n\n\n\n<p>Strata developments can be either leasehold or freehold.<\/p>\n\n\n\n<div id=\"footable_parent_24866\"\n         class=\" footable_parent ninja_table_wrapper loading_ninja_table wp_table_data_press_parent semantic_ui colored_table\">\n                <table data-ninja_table_instance=\"ninja_table_instance_0\" data-footable_id=\"24866\" data-filter-delay=\"1000\" aria-label=\"Leasehold vs Strata\"            id=\"footable_24866\"\n           data-unique_identifier=\"ninja_table_unique_id_1569142250_24866\"\n           class=\" foo-table ninja_footable foo_table_24866 ninja_table_unique_id_1569142250_24866 ui table  nt_type_legacy_table hide_horizonal_borders hide_vertical_borders striped compact vertical_centered ninja_custom_color inverted footable-paging-right ninja_table_search_disabled ninja_table_pro\">\n                <colgroup>\n                            <col class=\"ninja_column_0 \">\n                            <col class=\"ninja_column_1 \">\n                            <col class=\"ninja_column_2 \">\n                    <\/colgroup>\n        <thead>\n<tr class=\"footable-header\">\n                                                        <th scope=\"col\"  class=\"ninja_column_0 ninja_clmn_nm_who_owns_the \">Who owns the...<\/th><th scope=\"col\"  class=\"ninja_column_1 ninja_clmn_nm_freehold_strata \">Freehold Strata<\/th><th scope=\"col\"  class=\"ninja_column_2 ninja_clmn_nm_leasehold_strata \">Leasehold Strata<\/th><\/tr>\n<\/thead>\n<tbody>\n\n        <tr data-row_id=\"17360\" class=\"ninja_table_row_0 nt_row_id_17360\">\n            <td>Unit or building?<\/td><td>Homeowner<\/td><td>Homeowner<\/td>        <\/tr>\n            <tr data-row_id=\"17361\" class=\"ninja_table_row_1 nt_row_id_17361\">\n            <td>Land?<\/td><td>Homeowner<\/td><td>Landowner<\/td>        <\/tr>\n            <tr data-row_id=\"17362\" class=\"ninja_table_row_2 nt_row_id_17362\">\n            <td>Common areas?<\/td><td>Shared with other homeowners<\/td><td>Shared with other homeowners<\/td>        <\/tr>\n    <\/tbody><!--ninja_tobody_rendering_done-->\n    <\/table>\n    \n    \n    \n<\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\" id=\"types-of-leasehold-property-agreements\">Types of Leasehold Property Agreements<\/h2>\n\n\n\n<p>There are several different types of leasehold property agreements. The major differences between each agreement type are the length of time you have access to the land and how the contract renews.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Fixed-Term Tenancy<\/h3>\n\n\n\n<p>Fixed-term tenancy, or estate for years, is the most common type of leasehold agreement in Canada. An estate for years leasehold contract will state a start and end date. After the lease period ends, the landlord can renew, renegotiate, or terminate the agreement.&nbsp;<\/p>\n\n\n\n<p>The length of a leasehold varies. The most common length is 99 years, but it can range from 40 to 999 years. It&#8217;s important to note the length of time remaining on a leasehold agreement when you purchase a property.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Periodic Tenancy<\/h3>\n\n\n\n<p>In a periodic tenancy, or estate from year-to-year lease agreement, the agreement renews automatically each year. This type of agreement typically occurs after a fixed-term agreement expires and is not renegotiated.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Tenancy at Will<\/h3>\n\n\n\n<p>A tenancy-at-will agreement occurs when no formal agreement exists between the landlord and tenant. Since there is no contract, either party can end the tenancy at any time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Tenancy in Sufferance<\/h3>\n\n\n\n<p>Lastly, tenancy in sufferance occurs when the tenant\u2019s right to the property has expired or been terminated, but they remain on the property. In this case, the tenant could be forcibly removed from the premises.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-are-the-key-aspects-of-a-leasehold-property-agreement?\">What Are the Key Aspects of a Leasehold Property Agreement?<\/h2>\n\n\n\n<p>Before you purchase a leasehold property, you must understand the contract&#8217;s terms and conditions. It&#8217;s smart to review the property agreement with a real estate lawyer before completing the purchase of a leasehold property. Here are some common terms and aspects of a leasehold property agreement.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Lessor and Lessee<\/h3>\n\n\n\n<p>A leasehold contract is between two parties: the lessor, who is the landowner, and the lessee, who is the tenant leasing the land.<\/p>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/rent-to-own-guide\">Rent to Own: How Does it Work?<\/a><\/p><\/section>\n\n\n\n<p>It&#8217;s important to note that the lessee can sell their leasehold interest to another party without the landowner&#8217;s permission.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Rent Amount<\/h3>\n\n\n\n<p>The type of leasehold agreement will determine how you pay to lease the land:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Prepaid leasehold<\/strong> &#8211; you will pay a one-time upfront fee that covers the entire lease term, with no monthly or annual payments<\/li><li><strong>Non-prepaid leasehold<\/strong> &#8211; you will pay ground rent to the landowner. This ground rent covers the use of the land for a specific period of time and may include ground maintenance, depending on the agreement. These payments may increase over time, depending on the terms of the contract<\/li><li><strong>Public leasehold<\/strong> &#8211; applies to leases on land owned by municipalities, universities, or First Nations. The terms of the contract will depend on the landowner<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Responsibilities of Parties<\/h3>\n\n\n\n<p>The contract should outline exactly what the lessor and lessee are responsible for, particularly ground maintenance and exterior home repairs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Restrictions<\/h3>\n\n\n\n<p>With a leasehold property, your contract may include restrictions on modifying the property, even the unit or building. In addition, subletting may require the landlord\u2019s consent.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Renewal or Termination Terms<\/h3>\n\n\n\n<p>The contract will clearly outline the date the lease expires and the renewal or termination terms. After the expiration, the property owner can renew the lease, renegotiate the terms by raising the ground rent, or choose not to renew.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"pros-of-leaseholds\">Pros of Leaseholds<\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Lower upfront cost<\/strong> &#8211; The purchase price may be lower than a freehold property since you only own the building and not the land<\/li><li><strong>Less maintenance<\/strong> &#8211; Property maintenance may be taken care of by the landowner, depending on the contract<\/li><li><strong>Lower home insurance<\/strong> &#8211; Because you only need to insure the building and not the land, your <a href=\"https:\/\/www.zolo.ca\/blog\/home-insurance-cost\">home insurance policy<\/a> may be less expensive<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"cons-of-leaseholds\">Cons of Leaseholds<\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Less freedom<\/strong> &#8211; Leasehold contracts may dictate whether or not you can make changes to the home, add structures to the land, or have pets<\/li><li><strong>Might be more difficult to sell<\/strong> &#8211; You may have a harder time finding a buyer for a leasehold property, especially as the end of the lease nears<\/li><li><strong>Maintenance fees<\/strong> &#8211; Depending on the contract, maintenance fees or ground rent can add to your monthly expenses<\/li><li><strong>Mortgage<\/strong> &#8211; It may be more challenging to find a <a href=\"https:\/\/www.zolo.ca\/blog\/best-mortgage-lenders-in-canada-2024\">mortgage lender<\/a> for a leasehold property<\/li><li><strong>Property value<\/strong> &#8211; Leasehold properties do not appreciate in value in the same way as a freehold property. Additionally, a leasehold property may depreciate in value as the end of the lease nears<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"bottom-line-on-buying-a-leasehold-property\">Bottom Line on Buying a Leasehold Property<\/h2>\n\n\n\n<p>Buying a leasehold property may be a more affordable path to homeownership, but it comes with some drawbacks. For instance, you&#8217;ll have access to the land for a specified period. However, you need to pay lease payments, and you&#8217;ll have less freedom than freehold owners.<\/p>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/down-payment-assistance-programs\">Down Payment Assistance Programs in Canada<\/a><\/p><\/section>\n\n\n\n<p>Be sure to seek expert advice from a real estate agent, lawyer and mortgage broker prior to purchasing a leasehold home.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"leasehold-property-faq\">Leasehold Property FAQ<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">What&#8217;s the difference between a lease and a leasehold?<\/h3>\n\n\n\n<p>When you lease or rent a home, you have no ownership rights and must pay rent to the owner. A leasehold property means you own the building or unit but not the land. Instead, the land is rented from the land owner.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Can you lose a leasehold property?<\/h3>\n\n\n\n<p>After the leasehold agreement expires, the land owner may choose not to renew or increase the ground rent. Some agreements contain a surrender clause stating that when the leasehold agreement ends, the building is surrendered to the leaseholder.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Does leasehold mean you own it?<\/h3>\n\n\n\n<p>If you purchase a leasehold property, you typically own the dwelling or unit but not the land. The land is leased to you as the homeowner.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Is it better to lease or own your home?<\/h3>\n\n\n\n<p>Both leasing and owning a home have advantages and disadvantages. Owning a home offers the chance to build equity and more freedom to renovate. Renting offers less responsibility and predictable monthly expenses. It&#8217;s important to consider your financial situation before you decide to rent or buy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Leasehold property is a type of ownership where you own the dwelling or unit but you rent the land<\/p>\n","protected":false},"author":112,"featured_media":24862,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"guide":[],"class_list":["post-24860","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying"],"acf":[],"zolo_excerpt":"","_links":{"self":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/24860","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/users\/112"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/comments?post=24860"}],"version-history":[{"count":5,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/24860\/revisions"}],"predecessor-version":[{"id":24904,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/24860\/revisions\/24904"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media\/24862"}],"wp:attachment":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media?parent=24860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/categories?post=24860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/tags?post=24860"},{"taxonomy":"guide","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/guide?post=24860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}