2.1 Estates, Ownership Forms, Rights, and Interests

The Bundle of Rights

Bundle of rights describes ownership as a set of separable legal rights rather than a single thing. The five classic rights are possession, enjoyment, disposition, exclusion, and control (mnemonic: PEDEC).

Each right can be carved off independently. A lease transfers possession to a tenant. An easement removes some power to exclude. Zoning limits control. A mortgage limits disposition until the loan is paid.

Exam trap: Selling 'air rights' or 'mineral rights' is selling a stick from the bundle, not the whole property. The surface owner can keep the rest.

Estates in Land

An estate is the degree, quantity, and duration of a person's interest in land. Estates split into two families.

• Freehold estates — ownership of uncertain duration (you own it).
• Leasehold estates — possession for a stated time (you rent it).

Freehold Estates

• Fee simple absolute — the greatest estate; full bundle, no time limit, inheritable.
• Fee simple defeasible — ownership conditioned on an event.
  • Determinable ends automatically if the condition fails (watch for words like 'so long as' or 'while').
  • Condition subsequent lets the grantor choose to re-enter (watch for 'but if' or 'provided that').
• Life estate — lasts for the duration of a named measuring life.

Life Estate Worked Example

Maria deeds her home 'to David for life, then to Priya.' David is the life tenant and holds a present interest; Priya holds a remainder. David may live there but cannot will it. If Maria had said only 'to David for life,' the property would revert to Maria (or her heirs) on David's death.

Exam trap: A pur autre vie life estate is measured by a third person's life, not the holder's. David could hold an estate 'for the life of Sam.'

Forms of Concurrent Ownership

When two or more parties hold title at once, the form controls survivorship, transferability, and the shares each owner holds.

Severalty means ownership by one person or entity alone (from 'severed' from others, not 'several owners').

The Four Unities (TTIP)

Joint tenancy needs unity of Time (acquired together), Title (same deed), Interest (equal shares), and Possession (equal right to the whole). Break any one and the joint tenancy converts to a tenancy in common as to that share.

Survivorship Worked Example

Three siblings own as joint tenants, each holding one-third. One sibling deeds her interest to a friend. Her one-third now becomes a tenancy in common because the friend lacks unities of time and title. The remaining two siblings still hold their two-thirds as joint tenants with each other. If one of them dies, the survivor takes that share — the friend takes nothing by survivorship.

Exam trap: Right of survivorship beats a will. A joint tenant cannot devise their interest; it passes automatically to the survivors at the moment of death, avoiding probate.

Partition and Co-Owner Disputes

When co-owners disagree, any owner may bring a partition action. A partition in kind physically divides the land; a partition by sale sells it and splits proceeds and is far more common because most parcels cannot be split evenly. Tenants by the entirety generally cannot partition because spouses hold an undivided whole.

Leasehold Estates

A leasehold conveys possession, not ownership. Four types appear on the exam.

• Estate for years — fixed start and end date; ends automatically with no notice (a 12-month lease).
• Periodic estate — renews automatically (month-to-month) until proper notice is given.
• Estate at will — continues with consent until either party ends it.
• Estate at sufferance — a holdover tenant who stays after the lease ends without permission.

Exam trap: 'Estate for years' need not be measured in years — a 30-day fixed lease is still an estate for years because it has a definite end date.

Liens and Lien Priority

A lien is a monetary charge against property securing a debt. Liens are voluntary (a mortgage the owner agreed to) or involuntary (imposed by law, such as a judgment, mechanic's, or tax lien). A general lien attaches to all of a debtor's property (a judgment); a specific lien attaches to one parcel (a mortgage or mechanic's lien).

Priority Rules

The baseline rule is 'first in time, first in right' measured by recording date, not signing date. Two exceptions dominate the exam:

• Real-property tax and special-assessment liens take first priority regardless of when recorded.
• Mechanic's liens may relate back to the date work began or materials were first furnished, jumping ahead of liens recorded after that start date.

Priority Worked Example

A contractor begins work March 1 but records its lien July 1. A lender records a mortgage May 1. Because the mechanic's lien relates back to March 1, it may outrank the May 1 mortgage even though it was recorded later.

Subordination lets a senior lienholder voluntarily agree to take a lower position — common when a refinance lender requires a home-equity lender to step behind it.