The Sun (Used by permission)by Bernard KokTHERE are several major distinctions between a freehold property and a leasehold property, among which are:-(a an owner of a freehold property holds the title of the property in perpet!ity" He is the owner of the land and the b!ilding erected thereon" #hen a b!yer p!rchases a freehold property from a developer, the developer will e$ec!te a memorand!m of transfer to transfer the property to the p!rchaser%(b an owner of a leasehold property is not the owner of the land !pon which the b!ilding is erected, b!t is a lessee of the land for a period varying from three years to && years (the ma$im!m period of lease permitted by the 'ational (and )ode" *s!ally, when a p!rchaser p!rchases a leasehold property from a developer, the developer will constr!ct and sell the b!ilding to the p!rchaser and the landowner will create a lease in favo!r of the p!rchaser by way of a memorand!m of lease%(c in the case of a freehold property, there is no restriction in law on the n!mber of owners who can be registered as proprietors% and(d in the case of a leasehold property, the 'ational (and )ode does not permit land to be leased to two or more persons or bodies, !nless they are tr!stees, or e$ec!tors or administrators of an estate" This wo!ld mean that in the event there is more than one p!rchaser of a leasehold property, only one of them can be registered at the land registry or land office as lessee of the land" However, they may agree between themselves as to who shall hold the land as tr!stee for both of them or they may even agree that both of them shall hold the land jointly as tr!stees for both of them, to overcome the restriction in law"Terms and conditions of lease*nless otherwise provided in the lease, the 'ational (and )ode provides that it shall be implied that, among others, the landowner shall pay the +!it rent of the leasehold property and that so long as the lessee observes and performs the provisions of the lease, e$press or implied, the lessee shall enjoy peaceable and +!iet possession of the leasehold property witho!t any interr!ption or dist!rbance from the landowner",n the other hand, it shall be implied that the lessee shall pay the rental for the lease at the times and in the manner specified in the lease and observe and perform all the conditions, e$press or implied, to which the land is s!bject, incl!ding b!t not restricted to payment of assessment and other o!tgoings falling d!e in respect of the leasehold property"Reasons for selling and purchasing leasehold propertiesThere are vario!s reasons why parties may opt for a gro!nd lease transaction rather than an o!tright sale of the land" -rom the landowner.s perspective, the reason to opt for a lease transaction may be that the landowner wishes to retain the ownership of the land, which is high in val!e and the landowner may wish to reserve the right to develop or change the !sage of the land !pon e$piry of the lease or in f!t!re"-rom the lessee.s prospective, the reason to opt for p!rchasing a leasehold property may be that the p!rchase price of a leasehold property is !s!ally lessand more affordable than a freehold property"Dealing with leasehold properties*nless there are restrictions imposed by the /tate 0!thority on the land or by the landowner in the lease, a lessee shall be entitled to transfer and chargehis leasehold property and create a s!b-lease to his leasehold property"What will happen when the lease epires!0 lessee is always concerned abo!t his rights when the lease e$pires"*pon the e$piry of the lease, the lessee will be faced with three alternatives:(i to negotiate with the landowner to grant the lessee a f!rther term of the lease, s!bject to payment of revised rental% or(ii to negotiate with the landowner to sell to the lessee the land at a p!rchase price to be agreed !pon% or(iii to +!it and yield !p the leasehold property and, in that event, the lessee will lose the b!ilding and all the improvements he has made to the land""orfeitureEvery lease shall, s!bject to any e$press provision therein to the contrary, be liable to forfeit!re if the lessee breaches any of the e$press or implied provisions thereof, or if the lessee being an individ!al person is adj!dicated a ban1r!pt, or if the lessee being a company, goes into li+!idation"2efore the landowner enforces the forfeit!re of any lease, he is re+!ired to serve on the lessee a written notice specifying the partic!lar breach complained of, and if the breach is capable of remedy, re+!iring the lessee to remedy it, and in any case, other than non-payment of rent, re+!iring the lessee to ma1e compensation in money for the breach" 3f the lessee fails to comply with s!ch a notice within a reasonable time after s!ch notice is servedon him, the landowner may forfeit the lease"The forfeit!re of any lease will also e$ting!ish the entire interest dependent thereon, that is, any charge on the lease and any s!b-lease or any tenancy granted over the lease"The writer is a member of the Conveyancing Practice Committee, Bar Council, Malaysiawww.malaysianbar.org.myNote: This column is brought to you by the Malaysian Bar Council for your information only. 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