2.1 Estates, Ownership Forms, Rights, and Interests

The bundle of rights

Real property ownership is best understood as a bundle of rights: the rights to possess, use, exclude, enjoy, and dispose (transfer). A common exam mnemonic is PEUDE (Possess, Enjoy, Use, Dispose, Exclude). You can hold the whole bundle or sell off individual sticks (lease the use, grant an easement, mortgage the disposition). When all sticks are held by one party with no time limit, that is the largest estate the law recognizes.

Freehold estates

A freehold estate lasts an indefinite (potentially infinite) time. The two families tested are:

A fee simple defeasible ends automatically (determinable: "so long as...") or gives the grantor a right to re-enter (condition subsequent: "but if..."). Trap: a determinable fee reverts automatically; a condition-subsequent fee requires the grantor to act.

Life estates, remainder, and reversion

In a life estate, the life tenant has full use but cannot commit waste (damage the property) and cannot leave it by will. When the measuring life ends, title passes to either a named remainderman (remainder interest) or back to the grantor (reversion) if no remainderman was named.

Worked example: Ana deeds Blackacre "to Ben for life, then to Carla." Ben is the life tenant; Carla holds a remainder. If the grant had said only "to Ben for life," the property would revert to Ana (or her heirs) at Ben's death. If it said "to Ben for the life of Dana," Ben holds a life estate pur autre vie measured by Dana's life.

Leasehold (non-freehold) estates

A leasehold gives possession for a defined period without ownership. Four types are tested:

• Estate for years — fixed start and end date; ends automatically, no notice needed.
• Periodic estate — renews period to period (month-to-month) until proper notice terminates it.
• Estate at will — continues at the mutual will of both parties; terminable by either with notice.
• Estate at sufferance — a former lawful tenant holds over without permission; the lowest estate.

Trap: an estate for years does not require notice to end. A periodic estate does. Memorize the difference between a holdover (sufferance) and a tenant who simply has not received notice (periodic).

Forms of co-ownership

When two or more people hold title, exam questions hinge on survivorship and divisibility.

Joint tenancy requires the four unities — PITT: Possession, Interest, Time, Title (acquired by the same deed, at the same time, equal interest, equal possession). Sever any unity and that share converts to a tenancy in common.

Worked example: A, B, and C hold equal joint tenancy. C sells to D. D is now a tenant in common (1/3); A and B remain joint tenants (with survivorship) as to their combined 2/3.

Encumbrances vs. ownership interests

Not every interest is ownership. An encumbrance burdens title without granting ownership:

• Easement — right to use another's land (e.g., a utility line or shared driveway). An appurtenant easement runs with the land; an easement in gross is personal (utility company).
• Encroachment — an improvement (fence, eave) physically intrudes on a neighbor's parcel; discovered by survey.
• Lien — a monetary claim (mortgage, tax lien, mechanic's lien).
• License — revocable permission; not an interest in land.

Trap: an easement is a property interest that survives sale; a license is mere permission and can be revoked at any time. Encroachments are typically resolved by survey and title objection.

How Easements Are Created and Ended

The exam goes beyond defining easements to testing how they arise:

• Express grant or reservation — written into a deed.
• Easement by necessity — created when a parcel is landlocked and needs access across the grantor's remaining land; lasts only as long as the necessity.
• Easement by prescription — acquired by open, notorious, continuous, and hostile use for the statutory period (similar to adverse possession but for use, not ownership).
• Easement by implication — implied from prior apparent use when land is divided.

An appurtenant easement involves two parcels: the dominant tenement benefits, and the servient tenement is burdened; the benefit transfers automatically with the dominant parcel. An easement in gross benefits a person or company (a utility line) with no dominant parcel. Easements end by release, merger (one owner acquires both parcels), abandonment, or expiration of the necessity that created them.

Condominiums, Cooperatives, and Trusts

Multi-owner structures appear as ownership-form questions. In a condominium, the owner holds fee simple title to the individual unit plus an undivided share of the common elements as a tenant in common with all owners; each unit is separately taxed and financed. In a cooperative, the corporation owns the building and the resident holds shares of stock plus a proprietary lease — personal property, not real property — which is why co-op buyers obtain a share loan rather than a mortgage and why the board can approve or reject purchasers.

A town house typically combines fee ownership of the unit and the land beneath it with shared-wall (party-wall) arrangements. Property may also be held in a land trust or living trust, where a trustee holds title for beneficiaries. Distinguish the separate property vs. community property systems too: in community-property states, most assets acquired during marriage are owned equally, a recurring distractor against tenancy by the entirety.