What is a leasehold estate?

A leasehold estate refers to an interest in real property that is granted to a tenant for a specified period under the terms laid out in a lease agreement. This arrangement allows the tenant to enjoy certain rights to the property, such as the ability to live in or use the property, while the ownership of the property remains with the landlord or lessor. The duration of a leasehold estate is clearly defined within the lease contract, making it temporary in nature and typically ranging from a few months to several years, depending on the terms agreed upon by both parties.

This concept is fundamental in real estate as it helps delineate the rights between lessors and lessees, covering aspects such as payment terms, duration of the lease, and obligations of both parties. Understanding leasehold estates is vital for professionals in real estate, as they often negotiate, manage, or facilitate lease agreements that define the tenant's legal interests in the property.