Which estate denotes the right of possession, subject to lease terms?

A leasehold estate denotes the right of possession that is specifically established under the terms of a lease agreement. This type of estate allows a tenant to occupy and use a property for a specified period, as defined by the lease, while the landlord retains ownership of the property. The tenant’s right to possess the property is contingent upon the adherence to the lease conditions, such as payment of rent and compliance with any other stipulations outlined in the lease.

In contrast, a fee simple estate represents complete ownership of a property, allowing the owner full control without the limitations of any lease. Possessory interest refers to the actual legal right to possess property, which can exist in various forms, but does not specifically convey the conditions related to leasing. An easement is a right to use another person's land for a specific purpose, typically not involving possession or occupancy. Therefore, the concept of a leasehold estate is unique in its direct relation to possession under the agreement of a lease, making it the correct choice in this context.