2.1 Estates, Ownership Forms, Rights, and Interests
Key Takeaways
- A fee simple absolute is the highest, most complete form of ownership; a life estate lasts only for the measuring life and then passes to a remainderman or reverts to the grantor.
- Concurrent ownership forms differ in survivorship: joint tenancy and tenancy by the entirety carry the right of survivorship, while tenancy in common does not.
- Joint tenancy requires the four unities (time, title, interest, possession); breaking any unity severs the joint tenancy into a tenancy in common.
- Encumbrances such as easements, liens, and deed restrictions limit use or transferability but do not destroy ownership.
- An easement appurtenant runs with the land and benefits a dominant tenement; an easement in gross benefits a person or company, not a parcel.
Freehold Estates
An estate is the degree, quantity, nature, and extent of a person's interest in real property. Freehold estates last for an indefinite duration and confer ownership; non-freehold (leasehold) estates convey only the right to possess for a fixed or terminable period.
The broadest freehold is the fee simple absolute — complete ownership with no conditions, inheritable, lasting forever. The exam treats it as the benchmark against which lesser estates are measured.
Defeasible Fees and Life Estates
A defeasible fee is ownership subject to a condition. A fee simple determinable ends automatically if a stated condition fails ("so long as," "until") and the grantor keeps a possibility of reverter. A fee simple subject to a condition subsequent ("but if," "provided that") does not end automatically — the grantor must exercise a right of re-entry.
A life estate lasts only for the duration of a measuring life. When it ends, the property either passes to a named remainderman or reverts to the grantor (a reversion). A life estate pur autre vie is measured by the life of someone other than the holder.
Comparison of Freehold Estates
| Estate | Duration | What follows | Key language |
|---|---|---|---|
| Fee simple absolute | Forever | Heirs inherit | "to A and his heirs" |
| Fee simple determinable | Until condition fails | Possibility of reverter (automatic) | "so long as," "until" |
| Fee simple condition subsequent | Until grantor re-enters | Right of re-entry (not automatic) | "but if," "provided that" |
| Life estate | A measuring life | Remainder or reversion | "to A for life" |
Trap: A remainderman is a third party; a reversion returns to the grantor. Both are future interests — the holder owns the interest now even though possession is delayed.
Leasehold (non-freehold) estates
Freehold estates convey ownership; leasehold estates convey only possession for a period. The exam tests four:
| Leasehold | Duration | How it ends |
|---|---|---|
| Estate for years | Fixed term with set start/end | Automatically at term end — no notice |
| Estate from period to period | Renews automatically (month-to-month) | Proper notice by either party |
| Estate at will | Indefinite, with consent | Either party, generally with notice |
| Estate at sufferance | Holdover after a valid lease ends | Eviction or new agreement |
Trap: An estate for years needs no notice to terminate because the end date is built in; an estate from period to period requires notice. An estate at sufferance is the only leasehold where the tenant occupies without the owner's permission.
Trusts, ownership entities, and condominiums
Ownership can be held through entities the exam names. A land trust holds title with a trustee while the beneficiary keeps control and confidentiality. Tenancy in partnership holds property for a business; partners own it for partnership purposes, not as individual fractions. Common-interest ownership appears as condominiums (you own your unit fee simple plus an undivided share of common elements) and cooperatives (you own stock in a corporation and hold a proprietary lease, not real property — a key distinction).
Worked concurrent-ownership scenario
Owners W, X, Y, and Z take title as joint tenants, each 25%. X sells to P. P breaks the unities of time and title for that share and becomes a tenant in common holding 25%; W, Y, and Z remain joint tenants holding 75% among them. Y then dies. Because P is only a tenant in common, P takes nothing from Y; instead W and Z absorb Y's share by survivorship, so W and Z now hold 50% jointly and P holds 25% as a tenant in common.
This layering — partial severance, survivorship among the remaining joint tenants, and a tenant in common standing outside the survivorship — is the exact pattern the exam uses to separate strong candidates from memorizers.
A deed conveys land "to the city so long as it is used as a public park." If the city later builds offices on the land, what happens to title?
Concurrent Ownership
When two or more people own the same property at the same time, they hold concurrent (co-ownership) estates. The three tested forms differ mainly on the right of survivorship — whether a deceased co-owner's share passes automatically to the survivors or instead through the estate to heirs.
- Tenancy in common (TIC): No survivorship. Each co-owner holds an undivided fractional interest that can be unequal (e.g., 60/40). A deceased tenant's share passes to that owner's heirs or by will.
- Joint tenancy: Right of survivorship; interests must be equal. Requires the four unities.
- Tenancy by the entirety: Survivorship form reserved for married couples in states that recognize it; neither spouse can convey alone.
The Four Unities of Joint Tenancy
Joint tenancy requires four unities — memorized as T-T-I-P:
- Time — all owners acquire title at the same moment.
- Title — all acquire through the same deed or will.
- Interest — all hold equal shares.
- Possession — all have an undivided right to the whole.
Severance: If one joint tenant sells their interest, the unities of time and title break for the buyer. The buyer becomes a tenant in common with the remaining owners, who stay joint tenants among themselves.
Worked example: A, B, and C are joint tenants, each 1/3. A sells to D. D is now a tenant in common holding 1/3. B and C remain joint tenants holding 2/3 between them. If B then dies, C takes B's share by survivorship, so C holds 2/3 and D holds 1/3.
Three siblings own a property as joint tenants. One sibling deeds her interest to an outside investor. What is the resulting ownership structure?
Encumbrances, Easements, and Limiting Interests
An encumbrance is a claim or limitation that affects title or use without destroying ownership. Exam categories: monetary (liens) and non-monetary (easements, encroachments, deed restrictions).
Liens secure debt against the property — mortgages, mechanic's liens, judgment liens, and property-tax liens. A general lien attaches to all of a debtor's property; a specific lien attaches to one identified parcel. Property-tax and special-assessment liens generally take priority over earlier-recorded liens.
Easements
An easement is a right to use another's land for a specific purpose. Two tested types:
- Easement appurtenant: Involves two adjoining parcels — a dominant tenement (benefited) and a servient tenement (burdened). It runs with the land, passing automatically to new owners.
- Easement in gross: Benefits a person or entity, not a parcel (e.g., a utility company's power-line easement). There is no dominant tenement.
Other rights: an easement by necessity arises when a parcel is landlocked; an easement by prescription is acquired by open, continuous, hostile use over the statutory period; a license is mere permission, revocable, and does not run with the land.
Trap: An encroachment (a structure crossing a boundary) is a trespass/encumbrance, not an easement — though long-standing encroachments can ripen into prescriptive easements.