2.1 Estates, Ownership Forms, Rights, and Interests

Estates in Land

An estate describes the degree, quantity, nature, and extent of a person's ownership in real property. Estates split into two broad families: freehold (ownership of indefinite duration) and leasehold (possession for a fixed or determinable term). The exam tests your ability to rank these by the bundle of rights each conveys, so memorize the hierarchy before the nuance.

Freehold Estates

The fee simple absolute is the highest, most complete ownership: inheritable, of potentially infinite duration, and free of conditions. Most residential transfers convey fee simple absolute.

A defeasible fee can be lost if a stated condition is violated. A fee simple determinable uses durational language ("so long as," "while," "during") and reverts automatically to the grantor via a possibility of reverter. A fee simple subject to condition subsequent uses conditional language ("but if," "provided that") and gives the grantor a right of re-entry that must be actively exercised.

A life estate lasts for the life of a named person. The future holder is either a remainderman (third party) or the grantor via a reversion. A life tenant may use and profit from the land but cannot commit waste that harms the future interest.

Trap: Pur Autre Vie

A life estate measured by the life of someone other than the life tenant is a life estate pur autre vie ("for the life of another"). Example: Ann grants to Ben for the life of Carol. Ben's interest ends when Carol dies, not when Ben dies. If Ben dies first, his interest passes to his heirs until Carol dies. Exam writers love this fact pattern because candidates assume the estate ends at the holder's death.

Leasehold Estates

Leaseholds are less-than-freehold and convey possession, not title:

Note the counterintuitive point: an estate for years terminates without notice because both parties already know the end date, while a month-to-month periodic tenancy requires statutory notice to end.

Forms of Co-Ownership

When two or more persons hold title together, the form of concurrent ownership controls survivorship and what each owner may transfer.

• Tenancy in common (TIC): Each owner holds an undivided fractional interest that passes by will or intestacy. No survivorship. Shares may be unequal, and any cotenant may sell, mortgage, or devise their share independently. TIC is the default when a deed to multiple grantees is silent.

• Joint tenancy (JT): Requires the four unities of Time, Title, Interest, and Possession (mnemonic T-TIP). Includes the right of survivorship: a deceased joint tenant's interest passes automatically to the survivors, bypassing probate.
• Tenancy by the entirety: A joint tenancy reserved for married couples in states that recognize it; neither spouse can convey alone, and creditors of one spouse generally cannot reach the property.

Worked Example: Severance

Three siblings—Dana, Eli, and Fay—own a parcel as joint tenants, each with a one-third interest. Eli sells his interest to an outside buyer, Gail.

Selling breaks the unities of time and title for Eli's share, severing the joint tenancy as to that one-third. Result:

• Gail holds a 1/3 interest as a tenant in common with the others.
• Dana and Eli's buyer relationship ends; Dana and Fay remain joint tenants with each other for the remaining 2/3, retaining survivorship between themselves.

If Dana then dies, her share passes by survivorship to Fay (now 2/3), while Gail's 1/3 stays put. A common wrong answer claims one sale destroys the entire joint tenancy—it only severs the transferred share.

Other Interests and Rights

Encumbrances burden title without granting possession:

• An easement is a right to use another's land. An easement appurtenant benefits an adjacent dominant tenement and burdens a servient tenement; it runs with the land. An easement in gross benefits a person or utility, not a parcel.
• An encroachment is an unauthorized physical intrusion (a fence over the boundary) discovered by a survey.
• A license is a revocable, personal permission to use land—not an interest in the land.
• A lien is a monetary claim (mortgage, tax, judgment) against the property as security for a debt.

Concurrent Ownership Compared

When two or more people own together, the form controls survivorship and transfer:

Joint tenancy requires the four unities — time, title, interest, possession (TTIP). Selling one joint tenant's share breaks a unity and converts that share to a tenancy in common, while the rest may remain joint tenants.

Common-Interest and Trust Ownership

Beyond simple co-ownership, exam questions test specialized vehicles:

• Condominium — owner holds fee title to the unit plus an undivided interest in common elements; governed by the association and CC&Rs.
• Cooperative (co-op) — a corporation owns the building; residents own shares and hold a proprietary lease, not real property title.
• Time-share — ownership or use rights for a recurring interval.
• Land trust / living trust — a trustee holds title for beneficiaries; useful for privacy and probate avoidance.

Note the key distinction: a condo owner owns real estate, while a co-op shareholder owns personal property (stock) with a lease — a classic tested contrast.