The Definition of a Leasehold Deed of Trust

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A leasehold deed of trust is formed when a leaseholder acquires a long-term lease with another party and wants to build a structure of some kind on the property.

Leasehold

A written rental agreement for an extended period of time is referred to as a leasehold, which describes improvements made on property by the company leasing the land. It also describes options that may occur when the lease ends.

Deed of Trust

A deed of trust is a document pledging real property as collateral when securing a loan. The owner of the property deeds it to a beneficiary, which is typically the moneylender. When the loan is repaid in full, the title of the property returns to the owner.

Read More: How to Take a Spouse Off of a Deed of Trust

Combination

A leasehold deed of trust combines a leasehold and a deed of trust. This document is used by companies that lease a property for a long-term period; the time period can vary, but it is typically for 20 years or more. The company leasing the land builds a structure on the property, but the owner of the land may obtain the loan for the building. If this happens, a leasehold deed of trust is created, which requires the company leasing the land to do so for the long term.