Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What type of tenancy is created when a lessee has possession of the property under a lease?

1. Life estate

2. Periodic tenancy

3. Fixed-term tenancy

4. Leasehold

The correct answer is: Leasehold

A leasehold is the correct answer because it specifically refers to the legal right of the lessee (the tenant) to occupy and use the property under the terms of the lease agreement. The leasehold interest is created when a tenant enters into a lease with a property owner, granting them the right to use the property for a specified period or under certain conditions while the ownership remains with the landlord. In contrast, a life estate is a type of ownership that lasts for the duration of an individual's life, typically transferring to another party upon their death, which is unrelated to a lease agreement. Periodic tenancy is a rental agreement that continues for successive periods until either party gives notice to terminate, but it is just one form of leasehold. Fixed-term tenancy specifies a clear start and end date for occupancy, again fitting under the broader category of leasehold interests. The most encompassing term that includes all forms of tenancy created under a lease is leasehold. Thus, it accurately captures the concept of a tenant having possession of a property through a lease agreement.