What is defined as a leasehold estate?

A leasehold estate is fundamentally a property interest that grants an individual the right to use and occupy a real property for a specific duration according to the terms set forth in a lease agreement. This type of estate establishes a landlord-tenant relationship where the tenant (lessee) is granted the right to enjoy the property for a defined period in exchange for payment, typically rent, to the landlord (lessor).

This arrangement is distinct from full ownership, as the tenant does not hold title to the property; instead, they possess a temporary interest that is contingent upon the lease's terms. It encompasses various types of leases, including residential, commercial, and ground leases, each outlining the specific rights and obligations of both the tenant and landlord during the lease period.

Understanding leasehold estates is crucial in real estate practice, as they represent a significant aspect of property rental agreements and tenant rights. They differ from full ownership, which entails complete control and responsibility over the property.