Which ownership interest includes the right to receive rent and the reversion after lease expiration?

Which ownership interest includes the right to receive rent and the reversion after lease expiration?

• A. Leasehold estate
• B. Leased fee
• C. Reversion
• D. Fee simple

Answer: (B)

When a property is leased, two related interests exist: the tenant’s leasehold estate and the owner’s leased fee. The owner who holds the leased fee has the right to collect rent from the tenant during the lease term and also has the reversionary right to regain full possession of the property when the lease ends. In other words, this ownership interest combines the immediate income stream from rent with the future right to reoccupy the property after expiration. The leasehold estate belongs to the tenant, not the owner, and the reversion is the future right itself—part of the leased fee. Fee simple is a complete, unrestricted form of ownership not defined by a current lease. Therefore, the ownership interest that includes both the right to receive rent and the reversion after lease expiration is the leased fee.

When a property is leased, two related interests exist: the tenant’s leasehold estate and the owner’s leased fee. The owner who holds the leased fee has the right to collect rent from the tenant during the lease term and also has the reversionary right to regain full possession of the property when the lease ends. In other words, this ownership interest combines the immediate income stream from rent with the future right to reoccupy the property after expiration. The leasehold estate belongs to the tenant, not the owner, and the reversion is the future right itself—part of the leased fee. Fee simple is a complete, unrestricted form of ownership not defined by a current lease. Therefore, the ownership interest that includes both the right to receive rent and the reversion after lease expiration is the leased fee.