Humber/Ontario Real Estate Course 2 Exam Practice

In a leasehold estate, which statement is correct?

1. The tenant acquires a fee simple interest in the land.

2. An interest in land is granted over a specific time period.

3. The person to whom the interest is granted is called the lessor.

4. The lessee and lessor are not affected by provincial tenancy legislation.

5. The tenant owns the land.

6. It is similar to freehold estate.

The correct answer is: An interest in land is granted over a specific time period.

In a leasehold estate, the correct statement is that an interest in the land is granted over a specific time period. This means that the tenant has the right to possess and use the land for a specified period of time according to the terms of the lease agreement. Unlike a fee simple interest where the buyer owns the land with no time limit, in a leasehold estate, the tenant only has temporary rights to the land for the duration of the lease. This distinction makes option B the correct answer. Options A, C, E, and F are incorrect because in a leasehold estate, the tenant does not acquire a fee simple interest in the land, the lessor is the person granting the interest (not the person to whom the interest is granted), the tenant does not own the land, and a leasehold estate is not similar to a freehold estate. Option D is incorrect as both the lessee and lessor are subject to provincial tenancy legislation which governs the rights and responsibilities of both parties in a lease agreement.