Certified Residential Appraiser Practice Exam

What is the term for the right of one party to occupy a property for a specified period?

1. Leased fee interest

2. Lessee

3. Leasehold interest

4. Easement

The correct answer is: Leasehold interest

The correct term for the right of one party to occupy a property for a specified period is leasehold interest. This concept refers to the temporary right to use and occupy real estate, typically outlined in a lease agreement between the landlord (lessor) and the tenant (lessee). A leasehold interest grants the tenant the right to possess and utilize the property according to the terms set in the lease for a defined duration, which can be months, years, or any period specified in the agreement. This is crucial in real estate as it delineates the relationship between property ownership and occupancy rights. Understanding leasehold interests is fundamental for appraisers, as these rights can affect the value of a property. For instance, an appraisal must consider whether the property is subject to a long-term lease, which may impact the marketability and current value of the property. In contrast, other choices represent different concepts. A leased fee interest refers to the ownership of property subject to a lease, indicating that the owner has granted certain rights to a lessee, which is not the same as occupying the property. The term lessee simply identifies the individual or entity that holds the leasehold interest. Lastly, an easement denotes the right to use a portion of someone