shortlease

Shortlease is a term used in real estate to describe a leasehold interest that has a relatively small amount of time remaining before the lease expires. The exact threshold varies by jurisdiction, but leases with fewer than about 80 years left are commonly described as short leases in many markets, especially in the United Kingdom. A short lease can affect mortgageability, saleability, and the cost of renewal.

Implications for owners and buyers include potential depreciation in property value as the remaining term shortens, and increased complexity or cost when seeking to assign the lease or obtain financing. As the lease term declines further, extending the lease often becomes more expensive, and some lenders may impose stricter requirements. In some cases, escalating ground rents and service charges or limits on future transfers can accompany short leases, making ownership more cumbersome.

Extensions and enfranchisement: Leaseholders may seek to extend their lease or purchase the freehold. Many jurisdictions provide statutory mechanisms for lease extension or enfranchisement, typically involving a premium calculated by careful valuation. An extension generally adds years to the term and can reduce or remove burdens such as high or escalating ground rent, while improving mortgageability and marketability. The process usually requires formal negotiation, valuation, and sometimes adjudication or court involvement.

Differences by jurisdiction: The definition of a short lease, the steps to extend or enfranchise, and the financial consequences vary between countries and regions.

See also: leasehold, lease extension, enfranchisement, freehold.