What does the term "leasehold" refer to in real estate?

The term "leasehold" refers to a property interest granted to a lessee under a lease. In real estate, a leasehold estate is created when a landlord (the lessor) grants a tenant (the lessee) the right to occupy and use a property for a specified period, as governed by the lease agreement. This arrangement establishes a legal relationship between the lessor and lessee, detailing the rights and responsibilities of both parties related to the property.

Leaseholds are significant because they provide the tenant with a legal interest in the property, which can range from short-term arrangements, like month-to-month leases, to long-term agreements that might last several years. The tenant has the right to use the property, but the ownership remains with the landlord, which differentiates a leasehold from other forms of property ownership.

In contrast, the incorrect options either do not accurately define a leasehold or do not relate to the concept at hand. For instance, a type of mortgage involving rental payments is more related to financing rather than the rights granted through leasing. Similarly, a form of ownership where the buyer manages the property represents ownership interests, and a government subsidy refers to financial assistance for renters, which does not pertain to the legal nature of lease