New York State Real Estate Salesperson Licensing Exam

What is the primary purpose of a lease?

1. To grant ownership of property

2. To establish terms for the temporary use of property

3. To transfer title of the property

4. To document property value

The correct answer is: To establish terms for the temporary use of property

The primary purpose of a lease is to establish terms for the temporary use of property. A lease agreement defines the relationship between the property owner (landlord) and the individual or entity seeking to use the property (tenant). It outlines various important details such as the duration of the tenancy, the amount of rent to be paid, and the rights and responsibilities of both parties during the lease term. Leases are fundamentally agreements that provide tenants with the right to occupy and use the property without granting them ownership. This temporary arrangement allows tenants to live or conduct business in the property while ensuring that the landlord retains ownership and can enforce conditions of use, maintenance, and more. Ownership and title transfer are not inherent functions of a lease; these concepts relate to real estate conveyance, which requires different legal instruments, such as deeds. Similarly, while property value might be considered in the context of a lease, documenting property value is not the primary function of a lease agreement. Thus, option B accurately reflects the essential purpose of a lease within real estate transactions.