Real estate leasing is a contractual arrangement between the owner of real estate (landlord) and the real estate’s occupant (tenant) that allows the tenant to occupy and use the property for an agreed period of time in exchange for the payment of rent. The landlord is the owner of real estate that is rented or leased to an individual or firm – the lessor in a real estate lease. The tenant is the occupant and holder of rights to real estate granted by the landlord by means of a real estate lease or rental agreement – the lessee in a real estate lease.
Where property is occupied and used under a long-term lease for a certain contractual period, it is held in leasehold – a form of land or property tenure. A leasehold interest is the right (interest) of the leasehold owner to use and occupy real property for a specified fixed long term under the conditions as set out in the lease agreement.
In a leasehold interest, a landlord transfers to the leasehold owner the rights to occupy and use (lease) certain property for a given length of time in exchange for payment of rent. The leasehold owner generally has the right to transfer the entire leasehold interest to a third party by means of assignment or sublease of the property for the term covered by the original lease.