What happens to a leasehold estate after the lease term expires?

After a leasehold estate term expires, the property rights associated with the lease revert back to the owner who granted the lease. This is because a leasehold estate is essentially a temporary right to use and occupy the property, provided by the landlord or property owner. Once the agreed-upon term is completed, the lease agreement concludes, and the tenant's rights to the property cease. The landlord or property owner regains full control and possession of the property, allowing them to decide how to proceed next—whether to re-rent the property, make improvements, or undertake other actions.

The other choices present alternative scenarios that do not typically occur with the expiration of a leasehold estate. For instance, inheritance of leasehold property generally does not take effect unless specifically stated in the lease agreement, and leasehold estates cannot simply be extended automatically; they require a new agreement or renewal. Additionally, a leasehold estate cannot convert into a fee simple estate upon expiration, as these are fundamentally different types of property interests dictated by different rights and responsibilities.