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.

Types of Freehold: Fee Simple

Fee Defeasible
Life Estate
Fee Tail

Remember A 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!

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."

Types of Leasehold: Estates for years

Estate for period
Estate at will
Estate at sufferance

Fee Simple (Fee Simple Absolute) - Owns the bundle of rights Highest degree of ownership
Has unlimited duration
Is inheritable
Is subject to only the government powers (PETE)

Fee Simple Defeasible is based on an occurrence or a non-occurrence of a specified event Fee

simple conditional
An 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."

Life Estates Voluntary Life Estates

Ordinary Life Estates
The 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.

Ordinary Life Estates Estate 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.

Voluntary Life Estates are sometimes referred to as "Conventional Life Estates."

Grantor Life Tenant

Death of Life Tenant Grantor

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).

Grantor -> Life Tenant -> Death of Life Tenant -> Remainderman

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.

In either reversion or remainder a life tenant owns an incomplete bundle of rights!

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.

Pur Autre Vie This 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.

also called marital rights. Involuntary Life Estates are Legal Life Estates

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 property
Curtesy - a husband's interest in a wife's property
Homestead - protection against unsecured debts for the party who did not sign for the loan

Fee Tail Property 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!