2.1 Estates, Ownership Forms, Rights, and Interests

Freehold Estates

An estate describes the degree, quantity, nature, and extent of a person's interest in land. The first division on the national exam is between freehold estates (ownership of indefinite duration) and leasehold estates (possession for a fixed or determinable term). Confusing these two is the single most common trap: a tenant on a 10-year lease holds a leasehold, not ownership, no matter how long the term runs.

Fee Simple

• Fee simple absolute is the highest, most complete form of ownership: indefinite duration, freely transferable, and inheritable. Assume an exam answer is fee simple absolute unless facts say otherwise.
• Fee simple defeasible is ownership that can be lost if a condition is broken. A fee simple determinable uses durational language ("so long as," "while," "during") and ends automatically, leaving the grantor a possibility of reverter. A fee simple subject to a condition subsequent uses conditional language ("but if," "provided that") and requires the grantor to act, exercising a right of re-entry.

Life Estates

A life estate lasts only for the duration of a named person's life. The holder is the life tenant, who may use and profit from the property but must avoid waste (damage that harms the future interest holder). When the measuring life ends, the estate passes either to a remainderman (named third party) or back to the grantor as a reversion.

Watch the measuring-life wording:

Trap: in an estate pur autre vie, if the life tenant dies before the measuring person, the estate does not end — it passes to the life tenant's heirs until the measuring life ends.

A legal life estate is created by law, not by deed. The classic exam examples are dower, curtesy, and homestead protections.

Concurrent Ownership Forms

When two or more people own the same property at the same time, they hold a concurrent estate. The exam tests three forms and the four unities — remembered with PITT: Possession, Interest, Time, Title.

• Tenancy in common (TIC) is the default when a deed is silent and grantees are not married. Owners may hold unequal shares (e.g., 70/30), and a deceased owner's share passes by will or intestacy — there is no survivorship.
• Joint tenancy carries the right of survivorship: when one joint tenant dies, the share passes to the surviving joint tenants and bypasses probate. Selling a share breaks (severs) the joint tenancy as to that share, converting it to a tenancy in common.

Survivorship Worked Example

Three siblings take title as joint tenants with right of survivorship, each holding a one-third interest. One sibling sells her interest to an outside buyer.

1. The sale severs the joint tenancy only as to the sold one-third share.
2. The buyer now holds a one-third interest as a tenant in common with the remaining two siblings.
3. The two remaining siblings still hold their combined two-thirds as joint tenants with each other (survivorship survives between them).
4. If one of those two then dies, the survivor takes that share — ending with two-thirds — while the outside buyer keeps one-third.

Trap: survivorship always beats a will. If a joint tenant's will leaves "my share" to a child, the survivorship transfer happens at the instant of death, so there is no share left to pass by will.

Tenancy by the entirety is available only to married couples and adds the unity of marriage; neither spouse can convey or encumber the property alone, and creditors of one spouse generally cannot reach it.

Encumbrances and Interests in Another's Land

An encumbrance is a right or claim a third party holds against the property. It limits use or value but does not, by itself, prevent the owner from selling. Encumbrances divide into money (liens) and non-money (use restrictions) categories.

• Easement — a right to use another's land for a stated purpose. An easement appurtenant benefits an adjacent parcel and runs with the land (dominant and servient tenements). An easement in gross benefits a person or company (utility lines) and has no dominant tenement.
• Encroachment — an unauthorized physical intrusion (a fence or eaves over the boundary), revealed by a survey.
• License — revocable permission to use land (a ticket to park); it is personal and not an interest in the land.
• Deed restriction / restrictive covenant — a private limit on use enforced by other owners or an HOA.
• Lien — a monetary claim (mortgage, tax, mechanic's, judgment) that must be satisfied, usually at closing.

Trap: an easement appurtenant transfers automatically with the dominant parcel even if the new deed never mentions it — it "runs with the land."