What term describes the tenant's interest created by a lease?

What term describes the tenant's interest created by a lease?

• A. Reversion
• B. Leased fee
• C. Fee simple
• D. Leasehold estate

Answer: (D)

The tenant's interest created by a lease is a leasehold estate. A lease transfers possession and use of the property to the tenant for a defined period while the ownership stays with the landlord. This is a nonfreehold interest, meaning the tenant does not own the property outright. This compares with reversion, which is the landlord’s future right to regain full possession after the lease ends, and with the leased fee, which is the landlord’s remaining ownership interest after granting the lease (ownership burdened by the lease). Fee simple is full ownership with unlimited rights, not the tenant’s interest.

The tenant's interest created by a lease is a leasehold estate. A lease transfers possession and use of the property to the tenant for a defined period while the ownership stays with the landlord. This is a nonfreehold interest, meaning the tenant does not own the property outright.

This compares with reversion, which is the landlord’s future right to regain full possession after the lease ends, and with the leased fee, which is the landlord’s remaining ownership interest after granting the lease (ownership burdened by the lease). Fee simple is full ownership with unlimited rights, not the tenant’s interest.