A lease contract is best described as

A lease contract is best described as

• A. A temporary transfer of legal title.
• B. An instrument of conveyance of limited title.
• C. A conveyance of a possessory interest.
• D. A title conveyance in exchange for rent.

Answer: (C)

A lease creates a possessory interest in the property. The tenant gains the right to possess and use the property for a defined period, while the owner retains the title. Because no ownership passes, it isn’t a transfer of title or a conveyance of title in exchange for rent. The rent is payment for the right to occupy and use the property, not for transferring ownership. This is why a leasehold estate—the tenant’s possessory interest—best describes a lease contract.

A lease creates a possessory interest in the property. The tenant gains the right to possess and use the property for a defined period, while the owner retains the title. Because no ownership passes, it isn’t a transfer of title or a conveyance of title in exchange for rent. The rent is payment for the right to occupy and use the property, not for transferring ownership. This is why a leasehold estate—the tenant’s possessory interest—best describes a lease contract.