Certified Residential Appraiser Practice Exam

Which of the following best describes the lessee's interest in a property?

1. Ownership rights

2. Right to occupy a property for a specific period

3. Rights to develop the property

4. Rights to transfer ownership

The correct answer is: Right to occupy a property for a specific period

The interest of a lessee in a property is best described by the right to occupy the property for a specific period. This is foundational to the leasehold estate, where the lessee does not own the property but has the right to use and occupy it according to the terms set in the lease agreement. The lease establishes a contractual relationship between the lessor (property owner) and the lessee (tenant), granting the lessee exclusive possession of the property for the duration specified in the lease. In contrast, ownership rights imply full ownership of the property, which the lessee does not possess since they only hold a leasehold interest. The rights to develop the property typically reside with the owner unless specified otherwise in the lease, and rights to transfer ownership are associated with ownership interests rather than leasehold interests. Thus, the primary and defining characteristic of a lessee's interest is indeed the right to occupy the property for a set timeframe.