What is a primary characteristic of a leasehold estate?

A leasehold estate is characterized by its duration, specifically that it lasts for a specified term based on a lease agreement. This means that the tenant, or lessee, has the right to occupy and use the property for a predetermined period as outlined in the lease contract. After this term expires, the rights typically revert to the landlord, or lessor. This temporality distinguishes leasehold estates from freehold estates where ownership is typically perpetual and not tied to a specific timeframe.

A leasehold estate can apply to both residential and commercial properties, making it versatile in its use, but the vital aspect is that it is based on the lease agreement's defined duration. Therefore, identifying the term length specified by the lease helps to understand the nature of the leasehold estate.