What is meant by a leasehold estate?

A leasehold estate refers specifically to a legal interest that grants an individual the right to possess and use a property for a defined duration pursuant to the terms of a lease agreement. This arrangement means that while the leaseholder has possession of the property, the ownership remains with the landlord or lessor. The duration of the lease can vary; it may be short-term, such as a month-to-month rental or long-term, such as several years.

The key aspect of a leasehold estate is the concept of defined possession, which highlights the ephemeral nature of the leaseholder's rights. Unlike ownership, which could be indefinite, a leasehold estate is temporary and contingent upon the terms outlined in the lease. This makes it distinct from full ownership or unrestricted rights to land, which are characteristic of other property interests.

This definition inherently clarifies that options reflecting indefinite ownership, temporary ownership as a flat concept, or long-term rental agreements without specifying the nature of legal interest are not accurate representations of a leasehold estate. Thus, the notion of a defined period in which the tenant has rights aligns perfectly with the meaning of a leasehold estate.