What is the main characteristic of a leasehold interest?

A leasehold interest primarily refers to the right to possess and use a property for a specified period under the terms of a lease agreement, without transferring ownership of the property itself. This means that while the lessee has the right to occupy and utilize the property, the lessor retains ownership. The lessee's interest is defined by the lease duration and conditions, which can vary widely.

The focus of leasehold interests lies in the possession and use of property rather than ownership, making it distinct from other forms of property interests. The arrangement allows the lessor to lease out their property and receive rental income while the lessee benefits from the usage without incurring the upfront costs associated with property ownership. In this context, understanding the nature of leasehold interests is fundamental to effectively navigating real estate transactions and tenant-landlord relationships.