What is meant by "leasehold estate" in real estate terminology?

A "leasehold estate" refers to the right to use and occupy real estate for a specific period as defined in a lease agreement, which is essentially a contract between a lessor (landlord) and a lessee (tenant). This arrangement grants the tenant the right to possess and use the property, but not to own it. The term of the lease dictates how long this right lasts, which could range from months to several years, following which the tenant must vacate unless the lease is renewed.

This concept is distinct from outright ownership of the property, which would be indicated by options that refer to indefinite ownership or permanent claims. Additionally, while a leasehold estate does have certain transferrable characteristics under specific conditions, the essence of it is that it is primarily tied to a defined time period as stipulated in the lease, which does not apply to other estates that may fall under different kinds of real property interests. Understanding leasehold estates is crucial for both tenants and landlords as it outlines their respective rights and obligations within the duration of the lease.