2.1 Estates, Ownership Forms, Rights, and Interests

The Bundle of Rights

Ownership of real property is best understood as a bundle of rights, not a single thing. The classic rights are remembered as DEPP plus exclusion: Dispose, Encumber, Possess, use (Profit/enjoy), and the right to exclude others. An owner may keep all sticks in the bundle or transfer some away. Leasing transfers possession; granting an easement transfers limited use; a mortgage pledges the right to encumber.

When an exam item describes a person who can sell, lease, mortgage, and bar trespassers, it is describing a holder of the full bundle. Take away one stick and you change the estate.

Freehold Estates

Freehold estates last for an indefinite duration and convey ownership. The two families are fee simple estates and life estates.

• Fee simple absolute — the largest estate; perpetual, inheritable, and free of conditions. The default assumed by courts.
• Fee simple defeasible — ownership that can be lost on an event:
  • Fee simple determinable: ends automatically on a stated event. Watch for durational language: "so long as," "while," "during." Grantor keeps a possibility of reverter.
  • Fee simple subject to condition subsequent: grantor may re-enter and terminate. Watch for conditional language: "but if," "provided that," "on condition that." Grantor keeps a right of re-entry (power of termination).

Trap: the difference is automatic (determinable) versus optional re-entry (condition subsequent). The trigger words decide the answer.

Life Estates and Future Interests

A life estate lasts for the life of a named person, then passes on. The owner is the life tenant; they may use and profit from the land but must avoid waste (damage that harms the future holder's interest).

Who takes when the measuring life ends depends on the grant:

A pur autre vie life estate is measured by a third person's life, not the holder's. If A dies before C, A's heirs hold until C dies. A legal life estate (such as a homestead or dower interest in some states) arises by operation of law rather than by deed language.

Forms of Ownership

Severalty

Ownership in severalty means one person (or one legal entity) owns the entire estate alone. Do not be fooled by the word: "severalty" comes from "severed" from others, so it means sole ownership, not several owners. A corporation owning a building owns it in severalty.

Co-Ownership Forms

When two or more parties own together, the form controls survivorship, share size, and what happens at death.

• Tenancy in common (TIC) — the default for unrelated co-owners. Shares may be unequal (e.g., 60/40). No survivorship: an owner's share passes to their heirs or by will. Each tenant has an undivided right to possess the whole.
• Joint tenancy (JT) — carries the right of survivorship: a deceased joint tenant's interest passes automatically to the survivors, bypassing probate. Requires the four unities.
• Tenancy by the entirety — joint tenancy between spouses in states that recognize it; neither spouse can convey alone, and it offers strong creditor protection.
• Community property — in community-property states, most property acquired during marriage is owned equally by both spouses.

The Four Unities (PITT) and Partition

A joint tenancy requires four unities, remembered as PITT:

Worked example: A, B, and C own as joint tenants, each holding a 1/3 interest. A sells A's share to D. Time and Title unities break for D, so D becomes a tenant in common with B and C. B and C remain joint tenants of their combined 2/3 — survivorship continues between them. If B then dies, C takes B's share by survivorship, leaving C with 2/3 and D with 1/3 as a TIC.

Any co-owner may force a partition action to divide the property or order a sale and split proceeds. Trap: a will cannot pass a joint tenant's share — survivorship operates the instant of death, before the will.

Encumbrances

An encumbrance is a right or claim that burdens title but does not, by itself, defeat ownership. Two broad categories:

• Money encumbrances (liens): mortgage, property-tax lien, mechanic's lien, judgment lien. These attach a debt to the property.
• Non-money encumbrances: easements, deed restrictions/CC&Rs, encroachments, licenses, profits.

Easement types to know:

• Easement appurtenant — benefits an adjacent parcel; involves a dominant tenement (benefited) and a servient tenement (burdened). It "runs with the land" and transfers with the dominant parcel.
• Easement in gross — benefits a person or company, not a parcel (e.g., a utility easement). No dominant tenement.
• Easement by prescription — acquired by open, notorious, continuous, hostile use for the statutory period.

An encroachment is an unauthorized intrusion (a fence or eaves crossing a boundary); a survey reveals it. A license is mere permission, revocable at will, and is not an interest in land.