What does the term "leasehold estate" signify?

The term "leasehold estate" refers to a tenant's legal right to occupy and use a property based on a lease agreement. This arrangement is typically established between a landlord (the property owner) and a tenant (the leaseholder). Unlike ownership of real property, which grants the owner full control and rights to the property, a leasehold estate provides the tenant with a specific set of rights for a defined period under the terms stipulated in the lease. This includes the right to occupy the premises and, often, the right to make certain modifications as allowed by the lease.

The concept of leasehold estate is distinct from ownership, which is why choices referring to permanent ownership or property value do not apply in this context. It clearly outlines the tenant's situation as someone who rents rather than owns the property, which encompasses residential, commercial, and various other types of leases. Understanding leasehold estate is crucial for both landlords and tenants, as it encapsulates the legal framework governing their relationship and use of the property.