Types of Freehold Estates Flashcards

Types of Freehold Estates Flashcards Because a life tenant only owns an incomplete bundle of

rights he/she cannot:

Will the property to anyone else.Waste or destroy the property.Voluntary Life Estatesare sometimes referred to as "Conventional Life Estates." Death of Life TenantGrantor GrantorLife Tenant Grantor -> Life Tenant ->Death of Life Tenant -> Remainderman Estate in remainder is similar to an estate in reversion in that the grantor separates his/her bundle of rights into two

parts. However, in this case:

Life estate is deeded to a life tenant.Remainder estate is given to a third party who is known as the remainderman (once the life tenant dies, the remainderman owns the property fee simple, since he now possesses the complete bundle of rights).Fee Simple Defeasible is based on an occurrence or a non-occurrence of a specified event Fee simple conditionalAn estate that dictates, "on the condition that..."An estate that provides the "right to

re-enter"Example: "I will sell my property to you with the

condition that alcohol is never served on the premises. If you have a wine and cheese party, then I have the right to take back the property."

Types of Leasehold:Estates for yearsEstate for periodEstate at willEstate at

sufferance Fee Simple (Fee Simple Absolute) - Owns the bundle of rights Highest degree of ownershipHas unlimited durationIs inheritableIs subject to only the government powers (PETE)

Types of Freehold:Fee SimpleFee DefeasibleLife EstateFee Tail

In either reversion or remaindera life tenant owns an incomplete bundle of rights!Ordinary Life EstatesEstate in Reversion - the grantor separates his/her fee

simple estate into two parts which are:A life estate which is

deeded to a life tenant.Reversion estate which is retained by the grantor.Leasehold Estates means,"I rent the property," it is what we think of as "Renting" or "Leasing." There is usually a definite ending date.Sometimes, these are referred to as "Less than Freehold Estates." A life tenant owns an incomplete bundle of rights,and can sell, lease or demise (lease), encumber which means to borrow against, use, enjoy, exclude meaning no trespassing, occupy, cultivate, exchange to defer capital gains, explore, license (give others permission to use, dedicate for streets, schools, and parks, etc., share, mortgage, trade.Remember, if a life tenant does any of the above the person or lender, or any other entity who accepts the use of the property, in any way, only owns or has the right to use it until the death of the life tenant. When the life tenant dies the property either reverts to the original grantor

or goes in remainder to a third party named in the deed.What are the Private Rights (also called Interests or Estates) in Real Estate?Freehold Estates means, "I own the property," it is what we think of as "Ownership." There is no definite ending date.The estate lasts at least a lifetime, because the property can be willed to a person's heirs.Fee TailProperty is only inheritable by a monarch - by the "heirs of the body." This is always the wrong answer on the test, because it is not legal in the United States!RememberA landlord owns the property in Freehold. Remember a Freehold estate is an estate for at least a life time or

greater, but he/she rents it to the tenant in Leasehold!

also called marital rights.Involuntary Life Estates are Legal Life Estates Life EstatesVoluntary Life EstatesOrdinary Life EstatesThe life tenant possesses an incomplete bundle of rights for his/her lifetime. Once the life tenant dies, the life estate portion reverts back to the grantor, who once again has the complete bundle of rights.Pur Autre VieThis is a life estate, based on the life of another, rather than the life tenant. The life tenant can have the incomplete bundle of rights until that third party dies. A pur autre vie life estate can be either an estate in reversion or an estate in remainder.It is not possible to sell the property without the consent of the partner, nor own property in one name only. There are

three types of Legal life Estates. They are:

Dower - a wife's interest in the husband's propertyCurtesy - a husband's interest in a wife's propertyHomestead - protection against unsecured debts for the party who did not sign for the loan