What defines a leasehold interest?

A leasehold interest is defined as a tenant's right to use and occupy real estate for a specified duration, as established in the lease agreement. This means that the tenant does not own the property but holds a legal interest in the property for a definite period of time, which can range from months to years, depending on the terms of the lease.

In contrast to other types of interests in real estate, a leasehold interest does not imply any ownership of the land itself; rather, it grants the tenant the right to occupy and use the property under specified conditions. This arrangement typically involves payment of rent and may come with various stipulations regarding maintenance, use, and alterations.

Understanding this definition is vital for property management and leasing professionals, as it affects how leases are structured, the rights and obligations of both landlords and tenants, and how the leasehold can be transferred or terminated.