Humber/Ontario Real Estate Course 4 Exam Practice

What interest does a tenant have in a leasehold estate?

1. Fee simple interest.

2. An interest granted for a limited time.

3. Ownership of the property.

4. An equity interest in the property.

5. A shared interest with the lessor.

6. Joint tenancy interest.

The correct answer is: An interest granted for a limited time.

A tenant in a leasehold estate possesses an interest granted for a limited time. This type of interest is essentially a non-ownership interest, which allows the tenant to use and occupy the property based on the terms outlined in the lease agreement. The lease establishes specific rights and obligations for both the landlord and the tenant. Unlike ownership interests, such as fee simple interest, which conveys full ownership of the property, or equity interests, which reflect a share in the ownership value, a leasehold interest is temporary and concludes once the lease term expires. The tenant's ability to occupy the property is governed by the duration of the lease, which could range from a short period to many years, but ultimately it does not equate to ownership of the property itself. Thus, the precise and relevant nature of a tenant's interest in a leasehold estate is distinctly a limited, time-bound interest, clearly making the provided choice the correct one.