Explanations

The correct answer is B. An estate for years because a lease of real property for a fixed period of time with a set rent creates an estate for years.

• B. An estate for years (also known as a term tenancy) is a type of leasehold interest that has a specific beginning date and ending date. The lease term can be for less than a year or for several years, but the key is that the duration is definite. For example, a lease for two weeks to stay at Big Bear is considered an “estate for years” because it has a fixed time. No notice to vacate is required by either party because the ending date is already established. This directly matches the question’s description of a “fixed period of time at a set rate of rent.”

Let’s look at why the other options are incorrect:

• A. A lien on the property: A lease is not a lien. A lien is a legal claim on a property, typically as security for a debt, such as a mortgage, deed of trust, or property tax lien. While a lease creates an interest in the property for the tenant, it does not secure a debt in the same way a lien does.

• C. A freehold estate: A lease of real property creates a leasehold estate (also known as a less-than-freehold estate), not a freehold estate. A freehold estate is an ownership interest of indefinite duration, which can be freely sold, gifted, or passed to heirs. Examples include fee simple estates and life estates. In contrast, a leasehold estate is typically for a shorter, defined duration and is generally considered personal property or “chattel real,” even though it grants an interest in real property.

• D. An estate in co-tenancy: An estate in co-tenancy refers to a form of shared ownership of real property by two or more parties, such as joint tenancy or tenancy in common. This relates to how multiple owners hold title to the land, not to the rights granted to a tenant under a lease agreement.

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