Certified Residential Appraiser Practice Exam

In a leasehold interest, what is the primary right conferred to the tenant?

1. The right to sell the property

2. The right to occupy and use the property

3. The right to modify the property

4. The right to receive rent

The correct answer is: The right to occupy and use the property

The primary right conferred to the tenant in a leasehold interest is the right to occupy and use the property. This fundamental aspect of a leasehold agreement allows the tenant to utilize the space for residential or commercial purposes as per the terms of the lease. It grants the tenant the ability to enjoy the property, enabling activities such as living in a home, operating a business, or any other permitted use, which is the core function of a lease. While the other options touch on different rights or aspects of property ownership or management, they do not represent the essential purpose of a leasehold interest. For example, the right to sell the property typically belongs to the owner and not the tenant. Similarly, while a tenant may sometimes have the right to modify the property, such modifications are usually subject to the landlord’s approval and specific terms laid out in the lease agreement. The right to receive rent pertains to the landlord, asserting their interest in collecting payments for the use of the property, rather than the tenant's rights. Thus, occupying and using the property is the central focus of what a leasehold interest is designed to provide for the tenant.