What is meant by the term "leasehold estate"?

The term "leasehold estate" refers specifically to an interest in real property that is held under a lease agreement. This type of estate allows a tenant to occupy and use the property for a specified term in exchange for rent. The leasehold estate is characterized by the relationship between the landlord (lessor) and the tenant (lessee), where the tenant has the right to use the property while the landlord retains reversionary interest in the property itself.

This concept is fundamental in real property law as it encompasses various types of lease arrangements, such as residential leases, commercial leases, and more. In a leasehold estate, the tenant does not own the property outright; instead, they have the right to possess and use it as stipulated in the lease agreement for the duration of the lease term.

Understanding the nature of leasehold estates is essential for recognizing the rights and responsibilities of tenants and landlords in real estate transactions. In this context, the other answer choices do not accurately define a leasehold estate: permanent ownership pertains to freehold estates, warranty claims relate to legal actions for property damage, and informal agreements do not reflect the formal nature of leasehold estates established by legal contracts.