What Is a Freehold Tenure?

Freehold tenure is the legal right to own a piece of property without any limitations on its use. Freehold tenure is also known as title in fee simple. Most property in the United States is purchased through this type of agreement.

Property purchased through freehold tenure may come with obligations imposed by governing bodies. Property taxes and maintenance and zoning costs may be the responsibility of the owner. The rights and obligations attached to the freehold tenure pass to the heirs of the owner upon death.

A transaction in which property is leased for use by one party with specified limitations on its use is a leasehold tenure. Leasehold tenure properties remain under the ownership of the original owner but allow the leaseholder certain rights pertaining to the property. Most leasehold tenure transactions have a specified expiration date upon which all rights to the property transfer back to the original owner. Leasehold tenure transactions may impose certain obligations on the leaseholder as specified under the contract.

Freehold tenure and leasehold tenure are terms more commonly used in the United Kingdom than in the United States, though some states do refer to these terms in laws pertaining to property transactions. Both terms originated from the feudal system of land tenure in Anglo-Saxon England.