What kind of interest does a tenant acquire in a rental property?

A tenant acquires a leasehold interest in a rental property, which is a type of property interest that grants the tenant a temporary right to occupy and use the property in accordance with the terms of the lease agreement. This interest is created through a contractual relationship between the landlord and the tenant, stipulating the duration of the tenancy and the obligations and rights of both parties.

Unlike fee simple interest, which represents full ownership of a property along with the right to sell or transfer it, leasehold interest is limited to the duration of the lease agreement. Once the lease expires, the tenant's rights to the property end. Therefore, the tenant does not have ownership of the property itself, but rather a right to use it for the specified time frame.

It’s important to understand that leasehold interests can vary in type, such as residential leases, commercial leases, or ground leases, but they all share the fundamental characteristic that they derive from a lease agreement, not from an ownership stake in the property.

Other types of interests, such as equitable interest or present estate, do not accurately describe the relationship a tenant has concerning a rental property. Equitable interest suggests an ownership interest rooted in fairness and justice, which does not pertain to tenants since