Estates, Ownership Forms, Rights, and Interests
Key Takeaways
- A fee simple absolute is the highest, most complete estate; defeasible fees can be lost if a stated condition is violated.
- A life estate lasts for a measuring life; the future holder takes by reversion (back to grantor) or remainder (to a third party).
- Joint tenancy carries survivorship and requires the four unities (PITT); tenancy in common does not survive and allows unequal, freely transferable shares.
- Encumbrances such as easements, liens, and deed restrictions run with the land and bind future owners.
- Severance of one unity converts a joint tenancy interest into a tenancy in common for that share.
Estates in Land
An estate describes the degree, quantity, and duration of a person's ownership rights. Estates split into two families: freehold (ownership of indefinite duration) and non-freehold (leasehold, a tenant's possessory right for a defined term). The national exam tests the freehold hierarchy most heavily.
The largest freehold is fee simple absolute — complete ownership, inheritable, lasting forever, freely transferable. Picture the bundle of rights: Possess, Use/control, Enjoy, Exclude, and Dispose. A useful mnemonic is PUFEED-style thinking: you may possess, use, encumber, exclude, and dispose.
Defeasible Fees
A defeasible fee is ownership that can end if a stated condition occurs.
- Fee simple determinable — uses durational words like so long as, while, during. Title reverts automatically to the grantor (a possibility of reverter) if the condition fails.
- Fee simple subject to condition subsequent — uses but if, provided that, on condition that. The grantor must take action (right of re-entry); reversion is not automatic.
Trap: exam writers test the difference between automatic reversion (determinable) and optional re-entry (condition subsequent). Read the conveyance language carefully.
Life Estates
A life estate lasts only for the duration of a measuring life. The holder (the life tenant) may use the property but cannot commit waste (damage that harms the future interest).
Who gets the property when the measuring life ends?
- Reversion — title returns to the original grantor.
- Remainder — title passes to a named third party (the remainderman).
A pur autre vie life estate is measured by the life of someone other than the life tenant. Example: "To Ann for the life of Ben." When Ben dies, Ann's estate ends even though Ann is alive.
Concurrent Ownership Forms
When two or more people own one property at the same time, the form of co-ownership controls transferability and what happens at death.
| Form | Survivorship? | Equal shares? | Created by |
|---|---|---|---|
| Tenancy in Common | No | No (any fractions) | Default for co-owners |
| Joint Tenancy | Yes | Yes (equal) | Express + four unities |
| Tenancy by the Entirety | Yes | Yes | Married couples only |
| Community Property | Varies | 50/50 | Marriage (some states) |
Tenancy in common is the default. Each co-tenant holds an undivided fractional interest that passes by will or inheritance — not to the other owners.
The Four Unities of Joint Tenancy
Joint tenancy requires the four unities — PITT:
- Possession — equal right to possess the whole.
- Interest — equal ownership shares.
- Time — all owners take title at the same moment.
- Title — all take by the same deed or instrument.
The defining feature is the right of survivorship: when one joint tenant dies, that share passes automatically to the survivors, bypassing probate and any will.
Severance breaks the unity. If one joint tenant sells her share, the buyer becomes a tenant in common with the remaining owners, who stay joint tenants with each other.
Worked Example — Survivorship Math
Three siblings own a lot as joint tenants, each with a 1/3 interest. Sibling A sells her 1/3 to an outside buyer, X.
- A's sale severs her unity. X now owns 1/3 as a tenant in common.
- Siblings B and C remain joint tenants between themselves, holding the other 2/3.
- If B then dies, survivorship passes B's share to C. C now owns 2/3; X still owns 1/3 as a tenant in common.
Notice X never gains survivorship rights because X never shared the four unities with B and C. This is the classic exam trap.
Ann conveys property "to Bob so long as the land is used as a public park." What estate does Bob hold, and what happens if the land stops being used as a park?
Encumbrances and Other Interests
An encumbrance is a claim or limitation on title held by someone other than the owner. It does not transfer ownership but it does reduce the bundle of rights, and most encumbrances run with the land, binding future buyers.
- Easement — a right to use another's land (e.g., a utility line or shared driveway). An easement appurtenant benefits an adjoining parcel (the dominant tenement) and burdens the servient tenement.
- Lien — a financial claim (mortgage, tax lien, mechanic's lien) securing a debt.
- Deed restriction / restrictive covenant — a private limit on land use, often from a developer.
- Encroachment — an improvement that extends onto a neighbor's land.
Leasehold (Non-Freehold) Estates and Tenant Interests
The blueprint pairs freehold estates with the four leasehold estates a salesperson must distinguish, because they control notice and termination:
| Leasehold estate | Duration | Termination |
|---|---|---|
| Estate for years | Fixed term with a definite end date | Ends automatically; no notice required |
| Periodic estate (period to period) | Renews automatically (month-to-month) | Requires proper notice to terminate |
| Estate at will | Indefinite, with mutual consent | Either party may end it with notice |
| Estate at sufferance | Holdover after a lawful lease ends | Lowest estate; tenant has no right to be there |
Trap: An estate for years needs no notice to end because the end date is already fixed; a periodic estate does require notice. Candidates reverse these constantly.
Tenancy by the Entirety vs. Community Property
Nebraska is not a community-property state and does not recognize tenancy by the entirety, so married Nebraska co-owners typically take title as joint tenants (with survivorship) or tenants in common. The national exam still tests both as concepts: tenancy by the entirety requires marriage plus the four unities and bars one spouse from conveying alone; community property treats most assets acquired during marriage as owned 50/50.
Severalty and Entity Ownership
Title can be held in severalty - one person or one entity alone. The word means sole ownership, not several owners; that is a frequent vocabulary trap. Title may also be held by a corporation, LLC, partnership, or trust. A land trust lets a trustee hold record title while the beneficiary directs use and keeps identity private. When two unmarried partners take title for a business with no survivorship language, the default form is tenancy in common, so a deceased partner's fractional share passes by will to heirs rather than to the surviving partner.
Two unmarried business partners take title to a building, each contributing 70% and 30% of the purchase price, with the deed silent as to the form of ownership. How do they most likely hold title?