What is a key characteristic of a leasehold estate?

A leasehold estate is fundamentally defined by the arrangement that allows a tenant to use and occupy a property for a specified period without transferring ownership of the property itself. This type of estate arises from a lease agreement between the landlord (lessor) and the tenant (lessee), wherein the tenant pays rent in exchange for the right to use the property.

In a leasehold estate, the tenant has specific rights and responsibilities outlined in the lease but does not hold title to the property. This characteristic distinguishes leasehold estates from freehold estates, where ownership rights are fully vested. By focusing on the tenant's right to use the property rather than to own it, one can see how this arrangement is a key component of rental agreements in both residential and commercial contexts, reflecting the contractual nature of the relationship involved.

Other options, such as full ownership of the property or applicability solely to commercial properties, misconstrue the essential nature of a leasehold estate, while the notion of transferability without restrictions does not align with typical lease agreements, which usually include terms governing such actions.