Which right can the lessee convey a security on a loan?

• A. Right to mortgage
• B. Right to re-entry
• C. Right to retention of improvements
• D. Right to possession & quiet enjoyment

Answer: (A)

The key idea is that a tenant can encumber their leasehold interest to secure financing. A leasehold mortgage lets the lessee pledge the rights granted by the lease—such as the right to occupy the property for the term—as collateral for a loan. This creates a security interest in the leasehold estate, so the lender has a claim if the borrower defaults. The other options describe remedies or rights that aren’t about securing a loan: re-entry is a landlord remedy to retake possession for breach; retention of improvements concerns what happens to tenant-made improvements at the end of the lease; possession and quiet enjoyment are the tenant’s ongoing rights to use and enjoy the property, not security interests.