Humber/Ontario Real Estate Course 3 Exam Practice

Which type of estate grants an interest in land for a specific duration?

1. Leasehold estate

2. Perpetual interest

3. Proprietary lease

4. Term estate

5. Time-limited fee simple

6. Unlimited lease

The correct answer is: Leasehold estate

The correct answer refers to a leasehold estate, which indeed grants an interest in land for a specified duration. In a leasehold estate, the tenant (or lessee) has the right to occupy and use the property for a defined period, as stipulated in a lease agreement. The lease terms can range from short-term arrangements, like month-to-month leases, to longer agreements that can last for several years. This type of estate distinguishes itself by being temporary and contingent upon the conditions set forth in the lease contract. While other options might involve interests in land, they do not specifically refer to a limited-duration interest granted to a tenant. For example, a perpetual interest implies a right that lasts indefinitely, which does not fit the context of a specific duration. Similarly, a proprietary lease typically relates to cooperative housing arrangements and does not define the timeframe of the interest in the same way as a leasehold estate. A term estate can also describe an interest for a certain period, but it is broader than leasehold estates, which are specifically tied to rental agreements and tenant rights. The phrase "time-limited fee simple" suggests a form of ownership rather than a temporary rental interest, while "unlimited lease" incorrectly suggests an absence of a defined duration,