A Shortcut to Understanding Estates in Land

Welcome to the world of Estates in Land. At first glance, this world appears to be a complex chaotic mess of jibberish. But let me assure youit is not. The system of estates is nothing more than a simple foreign language. As with any language, learning the vocabulary can at first be tedious, but once you know the meaning of the terms and practice applying them, it will all fall into place. CHAPTER 1: ESTATES FREEHOLD AND LEASEHOLD Estates. Think of an estate as the specific grouping of sticks within the bundle of rights that comprise the possible property rights that a person may hold in land. If that is too complicated, just think of an estate as the title that a person holds in land. For example, do you hold title that gives you full ownership in the land, or do you hold title that gives you merely a right to lease the land? An estate may be either: (1) a freehold estate, or (2) a leasehold estate. Freehold estate: The term freehold derives from the land that was free from control of lords who had originally owned land in England. The landowners who received land from the lords eventually came to hold it free from the lords control. Today, freehold estate means rights to land that are not a part of a lease. Leasehold estate: It is exactly what it sounds likea lease in land. It is also referred to as a nonfreehold estate. Theres nothing earth-shattering about this concept. We diagram the freehold/leasehold relationship like this: Estates

Leasehold (Nonfreehold)

Freehold

Ok. That wasnt so bad. Now lets consider the types of freehold estates that are possible. (For now, well postpone discussing the type of leasehold estates.)

CHAPTER 2: THE TYPES OF FREEHOLD ESTATES Freehold estates may be either: (1) a fee simple; (2) a life estate; or (3) a fee tail. In our diagram, these types of freehold estates may be represented as follows: Estates

Leasehold (Nonfreehold) Fee Simple

Freehold

Life Estate

Fee Tail

Below is a description of each of the three freehold estates: (1) The fee simple is the longest in duration of these three estates: it is potentially infinite. For example: O gives Blackacre to A. This means that A owns Blackacre for as long as A desires, and if A never transfers Blackacre to someone else, Blackacre will pass to As heirs when A dies. o One thing to point out early on: In this example, O is the Grantor or Transferor, and A is the Grantee or Transferee.

(2) The life estate lasts for as long as a persons life. Someone who holds a life estate might own land for the length of that persons own life, or the length of another persons life. Example: O gives Blackacre to A for life. This means that A owns Blackacre for the life of A. When A dies, Blackacre goes back to O. o A holds a life estate. Life estate pur autre view. Where an estate is measured by a persons life who is not the estate holder, it is a life estate pur autre view. o Example: O gives Blackacre to A for the life of B. This means that A owns Blackacre for the life of B. When B dies, regardless of what A may be doing on Blackacre, Blackacre goes back to O. A holds a life estate pur autre vie. 2

(3) The fee tail lasts for as long as a persons descendents lives, generation after generation. The magic words representing a fee tail are: heirs of the body. So, if O conveys Blackacre to A and the heirs of the body of A, then A holds a fee tail. A cannot sell Blackacre because it must pass to As children, and their children, and their children, until finally there are no more children for it to pass on to, at which point O (or Os descendants) gets it back. Are you dizzy yet? Dont worry. Youll be glad to know that most states have passed laws doing away with the fee tail. Most states have declared that an attempt at a fee tail (through the magic words of heirs of the body) creates a fee simple. End of story. Except, of course, if you live in Arkansas. Under Arkansas law, an attempt at a fee tail creates a life estate in the recipient, A, and then the children of A get a fee simple once A dies. Dont be concerned if the fee tail gives you a headache. Just know that if you see the words heirs of the body, that is a red flag in Arkansas; it is a fee simple most everywhere else. Simply put, in Arkansas it means A gets a life estate, and As children get a fee simple after A dies. In essence, the fee tail language (heirs of the body) results in either a fee simple or a life estate. So there are really only two type of freehold estates you need be concerned with: fee simple and life estate.

Given the inapplicability of the fee tail, our diagram of the estates may thus be portrayed like this: Estates

Leasehold (Nonfreehold) Fee Simple

Freehold

Life Estate

Fee Tail

CHAPTER 3: THE TYPES OF FEE SIMPLE ESTATES

The fee simple has four further sub-categories: (1) fee simple absolute; (2) fee simple determinable; (3) fee simple subject to condition subsequent; and (4) fee simple subject to executory limitation. These four sub-categories of a fee simple estate may be represented on our estates chart like this:

Estates

Leasehold (Nonfreehold) Fee Simple

Freehold

Life Estate

Fee Tail

Absolute

Determinable

s.t. Condition Subsequent

s.t. Executory Limitation

Below is a description of each of the four sub-categories of the fee simple: (1) Fee simple absolute. The fee simple absolute has no qualification or restriction on the estate.1 A landowner who holds land in fee simple absolute may do anything the landowner so desires with the land (including transferring it by sale or by will).* If the landowner does not transfer the land by will or otherwise before the landowner dies, the land will pass to the landowners heirs at the landowners death.

There are three phrases that create a fee simple absolute when a landowner transfers land (in this example, the Grantee is A):

This isnt exactly true as there may be covenants or easements that apply to the landconcepts that we will be studying next semester. For now, though, it is ok to think of the fee simple absolute estate as providing a landowner unlimited rights over the land.

1. to A. For example: O gives Blackacre to A. A holds a fee simple absolute (assuming that O also held a fee simple absolute before transferring her interest to A.) 2. to A and his heirs. For example: O gives Blackacre to A and his heirs. The phrase and his heirs does not mean that As heirs hold any rights in the land before A dies. A could transfer the land to a third party and the heirs would simply be out of luck.

3. to A in fee simple. For example: O gives Blackacre to A in fee simple.

(2) Fee simple determinable. Where a fee simple has a duration placed on it that may cut short the fee simple in favor of the Grantor, and where that fee simple automatically reverts back to the Grantor, the fee simple is determinable. Simply put, if O gives Blackacre to A so long as A remains a student, then if A does not remain a student, As interest is cut short, and Blackacre goes back to O, who granted Blackacre to A in the first place. O has given A a fee simple determinable. Think of it like this: the Grantor, O, is determined to get the land back even though she gave it to A, the Grantee. O makes it so that if something happens (or doesnt happen) in the future, the land will automatically go back to her. That is a fee simple determinable. Buzz words of duration: so long as; as long as; while; during; until o O gives Blackacre to A while A is working for B. o O gives Blackacre to A during As employment with B. o O gives Blackacre to A until A stops working for B. o O gives Blackacre to A so long as A brushes his teeth every evening. If A fails to brush his teeth, Blackacre goes back to O.

(3) Fee simple subject to condition subsequent. Where a fee simple has a condition placed on it that may occur in the future, and where the Grantor is given the power to re-take the estate (if the Grantor so chooses), the fee simple is subject to condition subsequent. Buzz words of condition: provided that; on condition that; if; but if; provided, however,. Example #1: O gives Blackacre to A, but if A does not remain a student, then O may re-enter means that if A does not remain a student, O may choose to re-take Blackacre if she so desires; it is not automatic that O will get Blackacre back. O has given A a fee simple subject to condition subsequent. Example #2: O gives Blackacre to A, provided, however, that A brushes his teeth every evening. This means that if A fails to brush his teeth, O may re-enter and take Blackacre back if O so chooses. o Note that the Grantee need not specify that the Grantee may re-enter at her discretion for it be a fee simple subject to condition subsequent.

(4) Fee simple subject to executory limitation. Where a fee simple has a condition or duration placed on it that favors a new Grantee (rather than the Grantor) such that the new Grantee automatically takes the fee simple on the occurrence of the condition or duration, the fee simple is subject to executory limitation. Example #1: O gives Blackacre to A, but if A does not remain a student, then to C means that if A does not remain a student, Blackacre automatically goes to C. o A holds a fee simple subject to executory limitation. Example #2: O gives Blackacre to A as long as A remains a student, then to C means that if A does not remain a student, Blackacre automatically goes to C. o A holds a fee simple subject to executory limitation.

Thus, the system of estates in land may be represented like this:

Estates

Leasehold (Nonfreehold) Fee Simple

Freehold

Life Estate

Fee Tail

Absolute

Determinable

s.t. Condition Subsequent

s.t. Executory Limitation

so long as as long as while during until

provided that on condition if but if provided, however,