What is a leasehold estate?

A leasehold estate refers to an interest in real property that is granted for a specified term, which means it has a clear beginning and ending date. The tenant holds the right to use and occupy the property for the duration of the lease agreement, but does not have ownership of the property itself. This type of estate is commonly established through a lease agreement between a landlord (the property owner) and a tenant.

Understanding the nature of leasehold estates is essential, especially in real estate transactions, as they highlight the rights and responsibilities of both landlords and tenants. The specificity of the term of the lease provides clarity on the duration of occupancy, as well as the conditions under which the property can be utilized.

In contrast, permanent ownership interests refer to freehold estates, which grant full ownership without time limits. Similarly, leasehold estates are distinct from types of government-granted rights to land use, which typically deal with specific regulatory or zoning rights rather than occupancy interests established through contract.