Certified Residential Appraiser Practice Exam

A leasehold estate is generally considered to be _____ than a freehold estate.

1. Less

2. More

3. Equal

4. Stricter

The correct answer is: Less

A leasehold estate is generally considered to be less than a freehold estate because it represents a temporary right to occupy and use a property, while a freehold estate conveys a permanent interest. In a leasehold estate, the tenant does not own the land but has the right to use it for a specified period according to the terms of the lease. This means that the rights of the tenant are limited both in duration and scope, which inherently makes a leasehold estate less valuable than a freehold estate that grants full ownership rights, including the right to sell or transfer the property. Essentially, the freehold estate is the highest form of property ownership, providing more rights and greater security of tenure compared to a leasehold estate, which only offers a temporary and thus lesser claim to the property.