2.1 Estates, Ownership Forms, Rights, and Interests

The Bundle of Rights and Estates in Land

Ownership of real property is best pictured as a bundle of rights — the right to possess, use, exclude, enjoy, and dispose (transfer). Exam writers love the mnemonic PETED (Possession, Enjoyment, Transfer, Exclusion, Disposition). When you grant an easement, lease, or mortgage, you hand off one or more sticks from that bundle while keeping the rest.

An estate measures the degree, quantity, nature, and extent of a person's interest in land. The first fork is duration: freehold estates last an indefinite time (ownership), while leasehold (less-than-freehold) estates run for a defined term (possession without ownership).

Freehold Estates

Freehold estates are estates of ownership. The three tested categories:

A defeasible fee comes in two flavors. A fee simple determinable uses durational words ("so long as," "while," "during") and reverts automatically. A fee simple subject to condition subsequent uses conditional words ("but if," "on condition that") and the grantor must take action (right of re-entry) to reclaim it.

Life Estates and Future Interests

A life estate grants ownership for the duration of someone's life. "To Anna for life" gives Anna a life estate; she may use and profit from the land but cannot commit waste (damage that harms the future holder's interest). When Anna dies the estate must pass to someone.

• Remainder — a named third party (a remainderman) takes the property. "To Anna for life, then to Carlos" gives Carlos a remainder.
• Reversion — the property returns to the original grantor or their heirs because no remainderman was named.

A life estate pur autre vie is measured by the life of a person other than the holder — e.g., "to Anna for the life of Carlos." The estate ends when Carlos dies, not Anna.

Concurrent (Co-) Ownership

When two or more people own property at the same time, they hold a concurrent estate. The three forms tested nationally differ on the four unities — Possession, Interest, Time, Title (mnemonic PITT) — and on the right of survivorship.

Tenancy in common is the default when a deed to two or more people is silent. Each co-tenant owns an undivided fractional interest that passes to their heirs — no survivorship. Shares can be unequal (e.g., one owns 70%, the other 30%).

Survivorship Math and Severance

In a joint tenancy, when one joint tenant dies their share is divided equally among the survivors — it does not pass through probate. This is the exam's favorite numeric trap.

Worked example: Three joint tenants each own a one-third (33.3%) interest. One dies. The survivorship rule splits the deceased's one-third equally between the two survivors, so each now holds one-half (50%), not one-third. The estate passes outside the will entirely.

A joint tenant who sells their interest breaks (severs) one of the four unities. The buyer becomes a tenant in common with the remaining owners, who continue as joint tenants with each other. Severance destroys survivorship only for the transferred share.

Partition, Trusts, and Ownership Entities

Any co-tenant in a tenancy in common or joint tenancy may force a partition — a court division of the property (physical split, or sale and division of proceeds) when owners cannot agree. Tenancy by the entirety generally cannot be partitioned by one spouse alone.

Other forms candidates must recognize:

• Severalty — ownership by ONE person or entity alone (the word means "severed" from others, not several people).
• Land trust — title held by a trustee for a beneficiary who keeps control and confidentiality.
• Condominium — individual ownership of a unit plus an undivided share of common elements.
• Cooperative — a corporation owns the building; residents own shares plus a proprietary lease.

Encumbrances: Burdens on Title

An encumbrance is a claim, charge, or limitation held by someone other than the fee owner. It does not defeat ownership but limits it. Two families:

Money encumbrances (liens) — financial claims: mortgages, property-tax liens, mechanic's liens, judgment liens. A lien attaches to the property as security for a debt.

Non-money encumbrances — affect use or physical condition:

• Easement — a right to USE another's land (e.g., a utility easement or a driveway). An easement appurtenant benefits an adjacent parcel (dominant tenement) and burdens the servient tenement; it runs with the land. An easement in gross benefits a person or company (utilities).
• Encroachment — an unauthorized physical intrusion (a fence or eave over the boundary line), revealed by a survey.
• Deed restriction / CC&Rs — private limits placed by a developer or HOA.

Easement Creation and Licenses

Easements arise several ways the exam tests by scenario:

• Express grant or reservation — written into a deed.
• Easement by necessity — created when a parcel is landlocked and needs access to a road.
• Easement by prescription — acquired through open, continuous, hostile use for the statutory period (similar to adverse possession but for use, not ownership).

Do not confuse an easement with a license — a license is mere personal permission to use land (a ticket to park, a hunting permit). A license is revocable, does not run with the land, and is not an estate or an encumbrance. Distinguishing the irrevocable, land-running easement from the revocable, personal license is a classic distractor pairing.