Leasehold questions test the tenant’s interest in the property and how a lease ends. The exam distinguishes the four leasehold estates by how they terminate, and separates a sublease from an assignment by how much interest the original tenant keeps.
10 terms you need to know
- Estate at Will
- A tenancy that continues for an indefinite period and can be terminated by either party with proper notice.
- Estate for Years
- A tenancy with a defined start and end date — the most common commercial lease form.
- Gross Lease
- A lease where the landlord pays all operating expenses (taxes, insurance, maintenance). Common in residential.
- Lease
- A contract granting use and possession of property for a specified term in exchange for rent.
- Leasehold Estate
- The tenant’s interest in leased property. Includes estates for years, periodic tenancies, tenancies at will, and tenancies at sufferance.
- Net Lease
- A lease where the tenant pays some or all of the operating expenses in addition to base rent (single, double, or triple net).
- Quiet Enjoyment
- The tenant’s right to undisturbed use of leased premises — implied in every lease.
- Security Deposit
- Money held by a landlord to cover unpaid rent or damages. NY caps residential security deposits at one month’s rent under General Obligations Law §7-108.
- Sublease
- A lease by a tenant of part or all of leased premises to a new tenant (the sublessee), while the original tenant remains liable to the landlord.
- Tenant
- A person who occupies and uses property under a lease — the lessee.
Commonly confused
Sublease vs assignment
A sublease transfers part of the remaining term and the original tenant stays liable to the landlord. An assignment transfers the entire remaining interest.
Estate for years vs periodic estate
An estate for years runs to a fixed end date and terminates automatically with no notice. A periodic estate renews itself period to period until one side gives proper notice.
Gross lease vs net lease
Under a gross lease the landlord pays the operating expenses out of the rent. Under a net lease the tenant pays some or all of the taxes, insurance and maintenance on top of base rent.
How this is tested
Keep studying
- NY-Specific Topics: Rent Stabilization and More
- NY Real Estate Exam Topics
- Free timed practice exam
- Full NY Real Estate Glossary — all 161 terms
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