2.1 Estates, Ownership Forms, Rights, and Interests

Estates, ownership forms, rights, and interests

An estate in land describes the degree, quantity, nature, and extent of a person's interest in real property. The first exam fork is between freehold estates (ownership of indefinite duration) and leasehold (non-freehold) estates (possession for a measurable term). A buyer who receives a deed holds a freehold estate; a tenant under a lease holds a leasehold estate even though the tenant occupies the property.

The bundle of legal rights

Real property ownership is taught as a bundle of rights, often remembered by the mnemonic DEEPC:

A single right can be separated and conveyed alone. Granting an easement transfers a slice of the exclusion/use right without transferring possession. Leasing transfers possession and use for a term while the owner keeps disposition.

Freehold estates

Fee simple absolute is the highest, most complete estate. It is inheritable, of indefinite duration, and carries no conditions. When an exam answer asks for the "maximum," "highest," or "most complete" form of ownership, fee simple absolute is the response.

A defeasible fee is ownership that can be lost if a stated condition occurs. Two flavors appear on the exam, and the trigger words decide which one:

• Fee simple determinable ends automatically on violation ("so long as," "until," "during"). The grantor keeps a possibility of reverter.
• Fee simple subject to a condition subsequent does not end automatically ("on condition that," "but if," "provided that"). The grantor must act to retake using a right of re-entry.

A life estate lasts only for the duration of a measuring life. At that life's end, title passes to a named remainderman or reverts to the grantor.

Life estate trap

A life tenant may use and profit from the property but may not commit waste (damage that harms the future interest holder). A pur autre vie life estate is measured by the life of someone other than the holder — the holder's own death does not necessarily end it.

Concurrent (co-) ownership

When two or more people own at the same time, the form determines survivorship, transferability, and creditor exposure.

Tenancy in common (TIC)

The default when a deed names co-owners without specifying. Shares may be unequal, and each owner's share passes by will or intestate succession — there is no survivorship. A 60% / 40% TIC is common in exam math.

Joint tenancy and the four unities

Joint tenancy carries the right of survivorship: when one joint tenant dies, the survivors absorb the share, and it does not pass by will. It requires the four unities — PITT:

• Possession — equal right to the whole
• Interest — equal ownership shares
• Time — acquired at the same moment
• Title — acquired by the same instrument

If any unity breaks (for example, one joint tenant sells a share), that share becomes a tenancy in common with the new owner while the remaining joint tenants stay joint among themselves.

Tenancy by the entirety

Reserved for married couples in states that recognize it. Neither spouse can convey or encumber alone; a creditor of only one spouse generally cannot force a partition.

Worked numeric example: severance

Three siblings, A, B, and C, own a parcel as joint tenants, each with an equal one-third interest. C sells C's interest to outsider D.

1. D acquired by a separate deed at a separate time — the unities of time and title break for C's share.
2. D becomes a tenant in common holding a 1/3 interest.
3. A and B still hold the remaining 2/3 as joint tenants between themselves (1/3 each, with survivorship as to each other).

Now B dies. Because A and B were still joint tenants, B's 1/3 passes by survivorship to A. The result: A owns 2/3 (as a tenant in common with D) and D owns 1/3. D never gains survivorship rights.

The classic trap: assuming D "joins" the joint tenancy. An incoming buyer cannot inherit the four unities and always takes as a tenant in common.

Community property, severalty, and common-interest ownership

In community property states, most property acquired by either spouse during marriage is owned equally, while separate property (owned before marriage or received by gift or inheritance) stays with the individual. Ownership by one person alone is ownership in severalty — a single owner severed from any co-owner; a corporation taking title in its own name owns in severalty even though many shareholders stand behind it.

The exam also distinguishes shared-development forms. A condominium owner holds fee title to a unit plus a share of the common elements. A cooperative owner holds corporate shares plus a proprietary lease — technically a tenant, not a fee owner. Reading a co-op share as a deeded condo unit is a frequent wrong answer.