An Estate - An estate is the right to use and possess real property.
Hold Title - A person, who holds title to real property, owns the real property.
Majority of Owners - 99% of people who hold title to land, have the right to possess the land. This is where the confusion comes in when we talk about someone who holds title, but not an estate. Confusion also reigns when a person does not have title to the land, but has the right to possess the land; an estate. Obviously, this is only about 1% of the time, but it is something you might have to contend with on the State Examination or in a real life situation.
Title Only - A person could hold title to property and not have the right of possession. They would not have an estate in the property.
Estate Only - A person could have an estate and possess the property, but does not hold title to the property. They could not sell the property or devise it (pass it on) to their heirs.
Situation - You are talking to someone who wants to sell. 99% of the time, you are going to be selling title and possession. BUT, you have to make sure that they own the land and not just a life estate.
Lease Only - A person who leases property does not hold title, but has an estate in tenancy for the length of the lease. When the lease runs out, possession will revert (reversionary interest) back to the owner of the property.
Situation - You are talking to someone who wants to sell property that they are not occupying. Is the property a rental or is occupied with a grantee under a life estate? In either case, the buyer you work with will not be able to occupy/possess the property until the lease/life estate runs out.
An Interest - Any person who has an estate in the property, holds title to the property, or leases the property, is a remainderman to the property. If a person has any combination of these four, they have an interest in the property. They benefit from their position in the property. This is called an "interest" in the property.
An Estate - The right to possess and use the land. A person can be granted the use and possession of land without the right to sell the property (pass title to a buyer) or the right to demise the property (pass the right to heirs).
Life Estate - A life estate is the right to possess property and use property for a lifetime. The holder of life estate has several abilities regarding the use and possession of the property in question:
Freehold Estate - A freehold estate is the right to possess property for a lifetime. 99% of people who buy property will hold title to the property and have the right of possession for a lifetime. 99% of buyers have a freehold estate.
1% of property owners do not have the possession right. They have remainderman interest or hold a reversionary interest in the property. They do not have a " current" freehold estate in that they do not possess the land. Eventually, they will possess the property when the life estate holder dies and they will hold title to the property and have a freehold estate as well.
Freehold Estate ONLY - There are people who have an estate in property for a lifetime even though they do not hold title.
Life Estate Holder - A person who has been granted a life estate in property has a freehold estate. They are allowed to possess the property for a lifetime. They can sell this freehold estate, lease it, and/or mortgage it. They cannot devise it (pass it on) to heirs.
Lifetime Lease Holder - A person who has obtained a lifetime lease on property holds a freehold estate on the property. They have the right to possess the land for a lifetime. There are generous people who have granted a lifetime lease to an individual for $1 a year.
These individuals have a lifetime interest in the property. Once they die, their interest is gone and the named remainderman or the owner with a reversionary interest will acquire their own freehold estate. They have the right to own and possess the property for a lifetime.
Non-Freehold Estate - A non-freehold estate is the right to possess the property for a period of time, but NOT for a lifetime. Most people who hold an estate right (only) are those who hold a non-freehold estate.
Leasing Property - When a person leases an apartment or a house they are gaining a tenancy estate for a period of time, but not for a lifetime. They enjoy a non-freehold estate. The right to possess the property, for a fee, but not for a lifetime. The following would be examples of a non-freehold estate:
Which of the following would be classified as an estate?
D) All of the above
Which of the following is an interest in real property, but would not normally lead to the holding of an estate?
Which of the following is a freehold estate?
A) Estate at will
B) Life estate
C) Estate for years
If a person holds a life estate for a parcel, this means they:
A) Must pay property tax
B) They than have a non-freehold estate
C) Can't lease the property to a tenant
D) Have a freehold estate right of possession for life without ownership
Unless there exists a deed restriction to the contrary, the holder of a life estate may do all of the following with their holdings EXCEPT?
A) Sell it
B) Rent it
C) Mortgage it
D) Devise it
Campbell willed the benefits of his real property to Baker for Baker's lifetime, after which the property will pass to Evans. Evans has a/an:
A) Life estate
B) Estate at sufferance
C) Estate in remainder
D) Estate in reversion
A widow who is willed the use of the family home for the rest of her natural life with provisions that the title shall go to her children upon her death, holds:
A) A fee simple estate
B) A leasehold
C) A fee estate based on a condition
D) A life estate
A) Land passes to the grantee's heirs or assigns
B) Land returns to the grantor or the grantor's heirs
C) Property is alienated
D) Escheat has occurred
Which of the following is a less-than-freehold estate?
A) Property that has a debt on it
B) Property held under a 10 year lease
C) A lifetime lease
D) All of the above
An estate for years:
A) Automatically terminates at the stated expiration date
B) Must be for at least 2 years
C) must be contracted for increments of one year
D) terminates at the death of either the landlord or tenant
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