Estates In Real Property
In real property, an estate is the degree, nature, and extent of an individual's ownership in real estate. Several types of estates govern interests in real property. These interests include freehold estates, nonfreehold estates, concurrent estates, specialty estates, future interests, and incorporeal interests.
Freehold Estate A freehold estate is an estate in real property that is of uncertain duration. An individual who is in possession of a freehold estate has seisin, which means the right to immediate possession of the land. The two basic types of freehold estates in the United States are the fee simple absolute and the life estate. The fee simple absolute is inheritable; the life estate is not.
A fee simple absolute is the most extensive interest in real property that an individual can possess because it is limited completely to the individual and his heirs, assigns forever, and is not subject to any limitations or conditions. The person who holds real property in fee simple absolute can do whatever he wants with it, such as grow crops, remove trees, build on it, sell it, or dispose of it by will. The law views this type of estate as perpetual. Upon the death of the owner, if no provision has been made for its distribution, the owner's heirs will automatically inherit the land.
A life estate is an interest in property that does not amount to ownership because it is limited by a term of life, either of the individual in whom the right is vested or some other person,
or it lasts until the occurrence or nonoccurrence of an uncertain event. A life estate pur autre vie is an estate that the grantee holds for the life span of another person. For example, the grantor conveys the property "to grantee for the life of A."
A life estate is usually created by deed but can be created by a lease. No special language is required provided the grantor's intent to create such an estate is clear. The grantee of a life estate is called the life tenant.
A life tenant can use the land, take any crops from it, and dispose of his interest to another person. The life tenant cannot do anything that would injure the property or cause waste. Waste is the harmful or destructive use of real property by an individual who is in rightful possession of the property.
The life tenant has the right to exclusive possession subject to the rights of the grantor to enter the property to determine whether waste has been committed, collect any rent that is due, or make any necessary repairs.
A life estate is alienable; therefore, the life tenant can convey her estate. The grantee of a life tenant would thereby be given an estate pur autre vie because the death of the life tenant would extinguish the grantee's interest in the land. The life tenant is unable, however, to convey an estate that is greater than her own.
Nonfreehold Estates Nonfreehold estates are property interests of limited duration. They include tenancy for years, a tenancy at will, and a tenancy at sufferance. This type of estate arises in a landlord and tenant relationship. In such a relationship, a landlord leases land or premises to a tenant for a specific period, subject to various conditions, ordinarily in exchange for the payment of rent. Nonfreehold estates are not inheritable under the common law but are frequently assignable.
A tenancy for years must be of a definite duration; that is, it must have a definite beginning and a definite ending. The most common example of a tenancy for years is the arrangement existing between a landlord and a tenant, where property is leased or rented for a specific amount of time.
A tenancy from year to year, also called tenancy from period to period, is of indefinite duration. The lease period is for a definite term that is renewed automatically if neither party signifies an intention to terminate the tenancy. This is a common arrangement for leasing business office space or for renting a house or apartment.
A tenancy at will is a rental relationship between two parties that is of indefinite duration because either party may end the relationship at any time. It can be created either by agreement or by failure to effectively create a tenancy for years. A tenancy at will is not assignable and is categorized as the lowest type of chattel interest in land.
A tenancy at sufferance is an estate that ordinarily arises when a tenant for years or a tenant from period to period retains possession of the premises without the landlord's consent. This type of interest is regarded as wrongful possession. In this type of estate, the tenant is essentially a trespasser except that her original entry onto the property was not wrongful. If the landlord consents, a tenant at sufferance may be transformed into a tenant from period to period, once the landlord accepts rent.
Concurrent Estates A concurrent estate exists when property is owned or possessed by two or more individuals simultaneously. The three basic types are JOINT TENANCY, TENANCY BY THE ENTIRETY, and TENANCY IN COMMON.
Joint tenancy is a type of concurrent relationship whereby property is acquired by two or more persons at the same time and by the same instrument. A common example is the purchase of property, such as a house, by two individuals. The deed conveys title to "A and B in fee absolute as joint tenants." The main feature of a joint tenancy is the RIGHT OF SURVIVORSHIP.Ifany one of the joint tenants dies, the remainder goes to the survivors, and the entire estate goes to the last survivor.
A tenancy by the entirety is a form of joint tenancy arising between a HUSBAND AND WIFE, whereby each spouse owns the undivided whole of the property, with the right of survivorship. It is distinguishable from a joint tenancy in that neither party can voluntarily dispose of his interest in the property.
A tenancy in common is a form of concurrent ownership in which two or more individuals possess property simultaneously. The individuals do not own an undivided interest in the property, but rather each individual has a definable share of the property. One of the tenants may have a larger share of property than the others. There is no right of survivorship, and each tenant has the right to dispose of his share by deed or will.
Specialty Estates Specialty estates are property interests in CONDOMINIUMS AND COOPERATIVES. Condominium ownership, which was introduced in the United States in 1961 and grew in popularity, allows separate ownership of individual apartments or units in a multiunit building. The purchaser becomes the owner of a particular unit and of a proportionate share in the common elements and facilities.
In cooperative ownership, the title to a multiunit building usually is vested in a corporation. The purchaser of an apartment in the building buys stock in the corporation, receiving a stock certificate and a lease to the apartment. As a stockholder, each cooperative member has an ownership interest in the corporation, which owns all the units and common areas. Each tenant pays to the corporation a fixed rent, which is applied to a single building mortgage and a real estate tax bill for the entire building, as well as to insurance premiums and maintenance costs.
Future Interests Future interests in real property are property rights that are not yet in existence. The privilege of possession will come into being at a designated future time. There are five basic kinds of future interests: the reversion, possibility of reverter, right of reentry for condition broken (also known as power of termination), executory interest, and remainder.
A remainder is a good example of a future interest. Remainders are subdivided into two principal categories: contingent remainders and vested remainders. A contingent remainder is based on something happening in the future. For example, Tom owns Blackacre in fee simple. While Bob and Jane are alive, Tom conveys Blackacre to Bob for life, with a remainder to the heirs of Jane. The heirs of Jane are not yet known, so they have a contingent remainder.
A vested remainder is a future interest to an ascertained person, with the certainty or possibility of becoming a present interest subject only to the expiration of the preceding property interests. If Tom owns Blackacre in fee simple and conveys Blackacre to Bob for life and then to Jane in fee simple, Jane has a vested remainder in fee that becomes a present interest upon the death of Bob. She simply has to wait for Bob's death before assuming a present interest in Blackacre.
Incorporeal Interests Incorporeal interests in real property are those that cannot be possessed physically because they consist of rights of a particular user or authority to enforce various agreements as to use. They include EASEMENTS, covenants, equitable servitudes, and licenses.
Easements are rights to use the property of another for particular purposes. A common type of easement in current use is the affirmative grant to a telephone company to run its line across the property of a private landowner. Easements also are used for public objectives, such as to preserve open space and conserve land. For example, an easement might preclude someone from building on a parcel of land, which would leave such property open, thereby preserving a park for the public.
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