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Chapter 4
Interests and Estates
| Question | Answer |
|---|---|
| What is an interest in real estate? | ownership of any combination of the bundle of rights to real property. |
| what is undivided interest | an owner's interest in a property in which two or more parties share ownership. (Interest is in a fractional part of the entire estate). |
| How does interest differ? | -how long a person may enjoy the interest -what portion of land, air, or subsurface the interest applies to -whether interest is public or private -whether interest includes legal ownership of the property |
| Interests have two categories that distinguish them. What are they? | possession and non-possession |
| If an interest holder enjoys the right of possesion____ | They have estate in land (includes right of possession) |
| If a private interest holder does not have the right of possession_____ | the interest is an encumber |
| If the interest holder is not private (government) and does not have the right of possesion_____ | the interest is a form of public interest |
| An encumbrance enables a _________ to restrict the owners bundle of rights | non-owning party Ex: tax liens, mortgages, easements, encroachments |
| The prime example of public interest is? | police power: the right of the local or county government to zone. |
| The right of possession is interest depends on what? | the length of time, relationship s of the parties owning the estate, and specific interests held in the estate. |
| An estate can be either a______ or a ________ | freehold or a leasehold estate. |
| what is a freehold estate? | where the duration of the owner's rights cannot be determined by lifetime (lifetime duration). (Has ownership of the property ) |
| what is a leasehold estate? | relays on specific duration. No ownership because the leaseholders' rights are temporary. Ex: a lease term |
| What are both leasehold and freehold estates referred to as? | tenancies |
| Freehold estates of potentially unlimited duration is a______? | fee simple estate: an estate owned without any limitations or conditions. It is the highest form of ownership interest. other names: fee, fee interest |
| what are the two forms of fee simple estate? | absolute and defeasible |
| what is a fee simple ABSOLUTE? | estate not conditioned by stipulated or restricted uses. Can be passed on to heirs. The most desirable estate and the most common. |
| what is fee simple DEFEASIBLE? | estate that has stated conditions. Property must be used for a certain purpose. |
| what are the 2 types of fee simple DEFEASIBLE? | determinable and condition subsequent |
| what is determinable in fee simple? | the deed to a determinable estate has usage limitations. If violated, estate AUTOMATICALLY reverts to the grantor or heirs. |
| what is condition subsequent? | if a condition is violated, previous owner may repossess the property. NOT AUTOMATIC, grantor has a certain time frame. |
| what is a life estate? | a freehold estate that is limited in duration to the life of the owner or other named person. (Upon death of owner, the estate passes to the original owner or named party) |
| what is a reMAINDER? | when a life estate names a third party to receive title of property upon expiration of fixed interest by holder. (party or REMAINDERMAN enjoys future interest in land called REMAINDER INTEREST) |
| what is reVERSION? | if the holder has no remainder estate established, estate reverts back to ORIGINAL OWNER (keeps future interest) |
| What are the 2 type of life estates? | conventional and legal life estate. |
| What is conventional life estate? | estate created by deed or will. It is created by the express act of the grantor from a fee simple property. |
| what are the 2 types of conventional life estate? | ordinary and pur autre vie |
| what is ordinary life estate? | life estate that ends with the death of the life estate owner and passes back to original owner, heirs (REVERSION), or third party (REMAINDER) |
| what is pur autre vie? | (for another life) a life estate that endures over the lifetime of a third person. after death the property passes from tenant holder to original grantor (REVERSION) or third party (REMAINDERMAN). |
| what is legal life estate? | estate created by state law as opposed to being created by a property owner's agreement. Focuses on defining and protecting the property rights of surviving family members upon death of individual. |
| what are the 3 major forms of legal life estate? | homestead, dower and curtsey, and elective share. |
| what is a homestead? | one's principal residence. Homestead laws protect family members from losing their home due to collection of debt (different from homestead tax exemption which exempts portion of property's value from taxation) |
| what is a dower? What is curtesy? | Dower: a wife's life estate interest in the HUSBAND'S property. when husband dies, wife can make a claim to portion of property. Curtesy: identical right enjoyed by the husband in a deceased WIFE'S property. |
| what is an elective share? | a state-level statute enabling a surviving spouse to make a minimum claim to the deceased spouse's real and personal property despite not being said so on the will. |
| Tenants don't own a fee interest so leasehold estate is an item of______ property for a tenant. | personal |
| what is estate for years? | a leasehold estate for a defined period of time. Has a start and end date. At end of term, estate automatically terminates. Landlord can either re-posses, renew, or sell lease |
| what is a estate from period- to- period? | (periodic tenancy) the tenancy period automatically renews for an indefinite period of time. This is subject to timely payments of rent. Ex: month to month lease (can exist without written agreement) |
| what is estate at will? | (tenancy at will) has no definite expiration date so no renewal cycle. The tenant and landlord agree that there is no specific termination date as long as rent is paid on time. |
| what is estate at sufferance? | when a tenant occupies premises without consent of landlord. Ex: when a tenant fails to vacate |
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