2.1 Estates, Ownership Forms, Rights, and Interests

Estates in Land

An estate measures the degree, quantity, nature, and extent of a person's interest in real property. Estates divide first into freehold estates (indefinite duration, ownership) and leasehold estates (fixed or terminable duration, possession). Exam questions almost always begin by asking you to separate these two families, because remedies, transferability, and inheritance all flow from the classification.

The two freehold estates you must know cold are the fee simple absolute and the life estate.

Freehold Estates

Fee simple absolute is the highest, most complete ownership: indefinite duration, freely transferable, and inheritable. Roughly 95% of residential transactions convey fee simple. A fee simple defeasible is the same except a condition can cut it short (e.g., "so long as used as a library").

A life estate lasts for the life of a named person. The holder (life tenant) may use and profit from the land but cannot commit waste (harm the future interest). When the measuring life ends, title passes to the remainderman (named third party) or reverts to the grantor (reversion).

Trap: A life tenant who lets the roof rot is committing permissive waste — the remainderman can sue. A life estate is not willable, because it ends at death.

Leasehold (Nonfreehold) Estates

Leaseholds give possession, not ownership. The four classic types:

• Estate for years — fixed start and end (e.g., a 12-month lease); ends automatically, no notice required.
• Estate from period to period (periodic) — renews automatically (month-to-month) until proper notice ends it.
• Estate at will — continues until either party terminates; notice typically required.
• Estate at sufferance — tenant holds over wrongfully after the lease ends; the lowest estate.

Worked trap: A one-year lease that says it "automatically renews unless 30 days' notice is given" is not an estate for years after the first term — the auto-renewal converts it into a periodic estate. Exam writers love this distinction.

Condominium, cooperative, and how easements arise

Multi-owner housing adds two ownership structures the exam separates carefully. In a condominium, the buyer owns the individual unit in fee simple plus an undivided share of the common elements (lobbies, roof, grounds) as a tenant in common with all other owners. In a cooperative, the corporation owns the building; the resident owns shares of stock and holds a proprietary lease to occupy a unit — personal property, not real property.

Easements are also created and ended in tested ways. They arise by express grant or reservation, by necessity (a landlocked parcel needs access), by prescription (open, continuous use for the statutory period — the easement cousin of adverse possession), or by implication. They terminate by merger (one party acquires both parcels), release, abandonment, or expiration of purpose.

Trap: A landlocked owner is granted an easement by necessity, not adverse possession — the owner has a right to access and need not occupy hostilely. And an easement by prescription, unlike adverse possession, conveys a use right, never title.

Forms of Co-Ownership

When two or more people own concurrently, the form of ownership controls survivorship, transferability, and creditor exposure. The three tested forms are tenancy in common, joint tenancy, and tenancy by the entirety.

Tenancy in common (TIC) is the default when a deed is silent. Owners hold undivided fractional interests that may be unequal (e.g., 70/30). Each share is inheritable — there is no right of survivorship. Any cotenant may sell or will their share independently.

Joint Tenancy and the Four Unities

Joint tenancy carries the right of survivorship: when one joint tenant dies, their interest passes automatically to the survivors, bypassing probate. To create it, the four unities must exist — memorize PITT:

• Possession — equal right to possess the whole
• Interest — equal shares (e.g., two owners each 50%)
• Time — acquired at the same moment
• Title — acquired in the same deed/document

Breaking any unity severs the joint tenancy as to that share, converting it to a tenancy in common.

Worked numeric: Three joint tenants each hold 1/3. One sells to an outsider. The buyer takes 1/3 as a tenant in common, while the remaining two stay joint tenants with each other holding 2/3 — and survivorship still runs between those two.

Tenancy by the Entirety and Community Property

Tenancy by the entirety is a survivorship form available only to married couples in states that recognize it. Neither spouse can convey their interest alone; it shields the property from one spouse's individual creditors. Divorce typically converts it to a tenancy in common.

Community property (in community-property states) treats most assets acquired during marriage as owned 50/50, regardless of which spouse earned them. Property owned before marriage or received by gift/inheritance is separate property.

Severance/conveyance summary:

Encumbrances and Other Interests

An encumbrance is a claim, lien, or right held by someone other than the owner that affects title or use. They split into:

• Liens — money claims (mortgage, property tax, mechanic's lien, judgment).
• Non-money encumbrances — easements, encroachments, deed restrictions.

An easement is a right to use another's land. An easement appurtenant benefits an adjacent parcel: the dominant tenement enjoys the right; the servient tenement is burdened, and the easement "runs with the land" to future owners. An easement in gross benefits a person or company (e.g., a utility line) with no dominant parcel.

An encroachment is an unauthorized physical intrusion (a fence over the line); a license is mere revocable permission, not an interest in land.