What is a leasehold estate?

A leasehold estate is best defined as an interest in a property that is held by a tenant for a specified period under a lease agreement. This type of estate signifies that the tenant has the right to occupy and use the property for a defined duration as outlined in the lease contract. Unlike ownership interests that can last indefinitely or grant full rights to the property, a leasehold estate is temporary and is subject to the terms and conditions set forth in the lease.

The relationship established by a leasehold estate is fundamentally between the landlord and the tenant, where the tenant pays rent and, in return, enjoys the use of the property. This makes the tenant's interest in the property distinct from ownership, as the tenant does not hold title to the property but rather the right to use it for the duration agreed upon in the lease.

Understanding this concept is essential for anyone studying real estate, as it distinguishes the rights and responsibilities of tenants compared to those who own property outright.