Tisha is a licensed real estate agent in Texas. She holds bachelor's in legal studies and a master's degree in criminal justice.
Estate for Years
An estate for years is just one type of leasehold estate. Don't let the word ''estate'' fool you, as a person that holds an estate for years doesn't actually own the property in question. He is only leasing it for a particular amount of time.
An estate for years is a type of lease, with the tenant leasing real property for a specific amount of time. There is a beginning date and an ending date for the lease, and the lease usually lasts for many years. The lease specifies the amount of rent the tenant must pay the landlord. Once the lease expires, the tenant is expected to move out. Neither the tenant nor the landlord must give notice, as the lease states the date the tenant must vacate the property.
One interesting thing about an estate for years is that a tenant can build on the property he leases. The lease can be for such a long period of time that the tenant may be able to make an income from buildings that he erects on the property. This is one thing that makes such a long-term lease attractive.
An error occurred trying to load this video.
Try refreshing the page, or contact customer support.
You must cCreate an account to continue watching
Register to view this lesson
As a member, you'll also get unlimited access to over 84,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed.
Get unlimited access to over 84,000 lessons.Try it now
Already registered? Log in here for accessBack
Examples of Estate for Years
Let's look at some examples of estate for years.
Bill and Judy loved spending their weekends at the lake. As they got older and started to work less, they spent more time at the lake. The fees they paid to park their camper at the lake started to overwhelm them, and they began to look into other options. They found a great lot to park their camper with all of the utilities in place. The lot was available to lease for 20 years. Bill and Judy were ready to retire and happily signed the lease, locking them into that lot for the next 20 years.
Kenny owns a billboard company. He installs the billboards, then rents them out to various businesses to advertise. The billboards take up only a few square feet on the ground, where the pole is installed. It's an expensive process to install the pole and billboard, even though the space it takes up on the ground is minimal. He talks to many landowners, and leases several different spots around town to place his billboards. The lease is only for a few square feet at the ground and the right to place his poles and billboards. His leases are all for 99 years, allowing him many years to continue his billboard business. After he places billboards and rents them out, he's able to pay for his leases and still make a profit.
A large investment company owns many apartment complexes. Demand for the complexes has risen and the investment company begins to look for more property to build a new apartment complex on. The only property available is not for sale, but is available for lease. The investment company leases the property for 50 years and builds a new apartment complex on it. The amount of the lease and the cost of building the apartment complex is less than the amount the investment company will make over the next 50 years by renting out the apartments.
All of these situations are different, but they are all examples of estates for years. They all serve their purpose for the tenants, allowing them to use the real property leased for their individual needs. While not each situation results in the tenants making a profit, it is a possibility in some of the situations.
Many leases are for a short period of time. An estate for years is a type of leasehold estate that lasts for a specific period of time. The beginning and ending dates are specified in the lease, along with the amount paid in rent. No notice is required to vacate, as the tenant is expected to vacate at the end of the lease. The tenants can build on the real property leased, and make an income off of the property.
To unlock this lesson you must be a Study.com Member.
Create your account
Register to view this lesson
Unlock Your Education
See for yourself why 30 million people use Study.com
Become a Study.com member and start learning now.Become a Member
Already a member? Log InBack
Estate for Years in Real Estate: Definition & Examples
Related Study Materials
Explore our library of over 84,000 lessons
- College Courses
- High School Courses
- Other Courses
- Create a Goal
- Create custom courses
- Get your questions answered