Estates, Ownership Forms, Rights, and Interests

Estates in Land

An estate is the degree, quantity, nature, and extent of a person's ownership interest in real property. The exam separates estates into two families: freehold estates (ownership of indefinite duration) and leasehold estates (a tenant's right to possess for a fixed or renewable term). Freehold estates carry title; leasehold estates carry possession only.

Freehold Estates

The largest ownership package is the fee simple absolute — complete ownership, inheritable, of potentially infinite duration. Two narrower freeholds appear constantly:

• Fee simple defeasible (determinable / condition subsequent): ownership that can end if a stated condition occurs. "To the school so long as used for education" creates a determinable fee with a possibility of reverter back to the grantor.
• Life estate: ownership measured by someone's lifetime. The life tenant may use and profit from the property but cannot commit waste (damage that harms the future interest).

Future Interests After a Life Estate

When a life estate ends, title moves to a holder of a future interest. The exam tests two:

• Reversion — the future interest returns to the original grantor ("to A for life" with nothing said about who takes next).
• Remainder — the future interest passes to a named third party ("to A for life, then to B"). Here B holds a remainder.

A pur autre vie life estate is measured by the life of a person other than the life tenant — "to A for the life of B." When B dies, A's estate ends.

Forms of Co-Ownership

When two or more parties hold title together, the form of co-ownership controls survivorship, transferability, and creditor exposure.

Tenancy in Common (TIC)

The default form for unmarried co-owners. Each tenant holds an undivided fractional interest that can be unequal (40%/60% is fine). There is no right of survivorship — a deceased owner's share passes by will or intestacy to heirs. Each owner may sell, mortgage, or devise their share independently.

Joint Tenancy

Requires the four unities — Time, Title, Interest, Possession (mnemonic TTIP): owners take at the same time, by the same deed, in equal shares, with equal right to possess. The signature feature is the right of survivorship: when one joint tenant dies, their interest passes automatically to the survivors, outside probate, and cannot be willed. A joint tenant who sells their share severs the joint tenancy as to that share, converting it to a tenancy in common.

Worked Survivorship Example

Three friends — Ann, Ben, and Cara — take title as joint tenants, each holding a one-third interest. Ben sells his interest to Dev.

• Dev's purchase breaks the four unities as to Ben's share, so Dev holds a 1/3 interest as a tenant in common.
• Ann and Cara still share the four unities between themselves, so they remain joint tenants holding the other 2/3 together with survivorship.
• If Ann then dies, her interest passes by survivorship to Cara (now 2/3) — not to Dev. Dev keeps his separate 1/3 as a tenant in common.

This layered result is a classic exam trap: a single sale does not dissolve the entire joint tenancy, only the transferring owner's slice.

Tenancy by the Entirety

Available only to married couples (in states that recognize it). It carries survivorship plus a powerful creditor shield: one spouse's individual creditor generally cannot force a sale of the whole. Neither spouse can convey their interest alone — both signatures are required.

Bundle of Rights, Encumbrances, and Easements

Fee ownership is often taught as a bundle of rights: the rights to possess, use, enjoy, exclude, and dispose (mnemonic — "PEED-X" loosely, but exams just expect the five). An encumbrance is any claim or limitation that burdens the bundle without necessarily preventing transfer.

• Liens (money claims): mortgage liens, mechanic's liens, tax liens, judgment liens.
• Non-money encumbrances: easements, deed restrictions, and encroachments.

Easement Types

• Easement appurtenant benefits an adjacent parcel; it has a dominant tenement (benefited) and a servient tenement (burdened) and runs with the land.
• Easement in gross benefits a person or company, not a parcel — e.g., a utility easement.
• An encroachment is an unauthorized physical intrusion (a fence over the line) — a defect typically revealed by a survey, not a recorded document.

Leasehold Estates and Common Interest Ownership

Leasehold estates give a tenant possession without title. The four tested leaseholds:

• Estate for years — a fixed beginning and ending date; it ends automatically with no notice needed.
• Estate from period to period (periodic) — renews automatically (month-to-month) until proper notice is given.
• Estate at will — continues at the mutual pleasure of both parties; either may terminate, usually with notice.
• Estate at sufferance — a holdover tenant who stays without permission after a lawful tenancy ends.

Shared-Ownership Forms

The exam also separates how owners hold multi-unit property. In a condominium, the buyer owns the unit in fee simple plus an undivided share of the common elements, and pays property tax on the individual unit. In a cooperative, a corporation owns the building; the resident owns shares of stock and holds a proprietary lease — owning personal property, not real estate. A planned unit development (PUD) owner typically owns the lot and structure in fee with an HOA controlling shared areas. Distinguishing fee ownership (condo) from a stock-and-lease interest (co-op) is a recurring trap.