I don't think there's anything fishy about that Mikejee, it's the way things go with inheritance and with leaseholds.
It is still happening with new build properties which is why the government is talking at the moment of banning new property from being sold on leasehold contracts.
My first house was on a leasehold and the ground belonged to the National Coal Board pension fund, we had to pay ground rent to them, not much, I think about £7.50 a year but all the time the lease was running out, it stood at around forty years remaining when we were given the opportunity to buy the freehold (by McMillan's government) we paid £250 for it which was added to our existing mortgage.
Had the lease been allowed to run out ownership of our house would have passed to the NCB pension fund.