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An agreement whereby the legal owner of real property gives another person the possession of that property with freedom to use it as he wishes, though possibly under certain conditions, in return for a regular specified payment referred to as rent. Although personal, as opposed to real property can also be lent to another, that type of transaction is normally referred to as an agreement to hire.

The real property is freehold or leasehold land and/ or buildings and is normally accompanied by such rights of way as are necessary for free access. The person obtaining possession, i.e. the holder of the lease, is said to be the owner of leasehold property, which can, unless the original agreement forbids, be sublet to another person, who in turn may sublet the Toperty. Generally, subleases arise where the land contained in the first, or head, lease can be divided into various smaller portions each of which can command a price. For instance, a builder may obtain a lease of a fairly large area of land on which to build a i number of separate houses. Each person buying a house becomes a subtenant of the true owner of the land, and the house-owners themselves may go on to sublet part or all of their houses. Leases obtained for house building are usually very long, often ninety-nine years; the occupiers of each of the buildings now have a statutory right to a new lease when the old one expires – on condition that they are wilUng to pay a fair rent, which might be much higher than the old one, particularly when the value of money has fallen drastically during the term of the original lease.

Reference: The Penguin Business Dictionary , 3rd edt.