What is a leasehold estate?

A leasehold estate is defined as an interest in land held for a fixed term under a lease agreement. This means that the person who holds the lease, known as the leaseholder, has the right to use and occupy the property for a specified period, as outlined in the lease contract. This arrangement gives the leaseholder certain rights to the property, while ownership of the land itself remains with the lessor or landlord.

In a leasehold estate, the key aspect is the fixed duration. Unlike freehold estates, where ownership is typically permanent and can last indefinitely, a leasehold is tied to the term of the lease. At the end of the lease term, the rights revert back to the lessor, unless the lease is renewed or extended. This structure is common in various types of real estate, including residential and commercial properties.

The other choices do not accurately capture the essence of a leasehold estate. Permanent ownership of land and property refers to a freehold estate, which is distinct from leasehold interests. A temporary license to occupy land without formal agreements does not involve the legal rights associated with a leasehold estate, as it lacks the binding nature of a lease contract. Additionally, the notion that leasehold estates are exclusive to commercial real estate