Question

The lease contract is considered:

Selections

A. Real property

B. Personal property

C. A freehold estate

D. None of the preceding

---

Answer: B

---

5 Keys Summary

• The lease contract, which establishes a tenant’s possessory interest, is legally classified as personal property.

• A leasehold estate is also commonly referred to as “chattel real,” which explicitly defines it as personal property associated with real estate.

• Despite granting an interest in real property (the right to use and possess), a lease is specifically considered not to be real property itself for legal classification purposes.

• The contract creates a less-than-freehold estate (or non-freehold estate), differentiating it from a freehold estate (Fee Simple) which represents ownership of indefinite duration.

• This classification as personal property stems from the key characteristic of a leasehold estate: it is always held for a fixed, defined period or duration of time, unlike a perpetual estate.

Pages: 1 2 3