What distinguishes a fee simple estate from a leasehold estate?

A fee simple estate is characterized by the highest level of ownership in real property, granting the owner full rights to the property without limitations on duration. This type of estate is fully transferable and can be sold, given away, or inherited. In contrast, a leasehold estate involves a temporary arrangement where the tenant has rights to use and occupy the property for a specified duration as dictated by the lease agreement.

In the context of the distinction noted in the correct answer, the ownership structure is central. A fee simple estate is typically owned outright by a single party, meaning that individual has complete control over the property. On the other hand, a leasehold estate is not owned in perpetuity; instead, it’s based on the lease agreement that specifies the duration and terms of occupancy, which is why it can involve multiple parties (such as in cases where a property is leased to many tenants).

Thus, acknowledging that one person owns a fee simple estate while multiple individuals can hold interests in a leasehold estate accurately communicates the fundamental difference between these two types of property interests.