Unit 2- Estate

Reversionary Interest

A future estate that the grantor holds while granting a life estate to another person.

Remainder Interest

A future interest in real estate created by the grantor for some third party that will be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one party and the remainder to another.

Fee and Simple Estates

A holder of an estate in fee simple is entitled to all right in the property. An estate in fee simple is the highest type of interest in real estate recognized by law. It is complete ownership. It is potentially unlimited duration When the owner dies, the este passes to the owner's heirs or devisees of the owners will It is legally transferable Not always free of encumbrances- burden, mortgage or assets

Nonfreehold (leasehold Estates)

Also known as leasehold estate- A tenant's right to occupy real estate during the term of a lease, generally considered a personal property interest; nonfreehold estate.

Fee Simple Defeasible- See defeasible fee estate

An estate in which the holder has a fee simple title that may be terminated upon the occurrence or nonoccurrence of a specified event. Two categories of defeasible fee estates exist: fee simple determinable and fee simple on condition subsequent.

Life Estate

An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons.

Fee Simple Absolute

Fee Simple Absolute- The maximum possible estate in real property; most complete and absolute ownership; indefinite induration, free transferable and inheritable.

Two Major Types of of Fee and Simple Estates

Fee simple absolute- no ownership limitations- most common Fee simple defeasible- ownership can be terminated due to the actions of the current owner.

Pur Autre Vie

For the life of another. Is a life estate that is measure by the life of a person other than the grantee.

Fee Simple Absolute

Is basically has no ownership limitations, other than government restrictions The terms fee and fee simple are used interchangeable with fee simple absolute Owners of a fee simple estee can do whatever they wish the property as long it does not violate public land use regulations, deed restrictions, and the rights of others. This is the highest form of land ownership This type of estate conveyed via the deed in moste real estate transactions.

Life Tenant

Life Tenant- A person in possession of a life estate.

Remainderman

One entitled to receive a remainder interest insole estate sometimes in the future.

Rights and Restrictions of a Life Tenant

Rights and Restrictions of a Life Tenant Entitled to all income/profit from property during tenancy Can sell rent and/or mortgage own life interest in the property (only for his /her lifetime of course) Use of property resources to maintain property (aka estovers) Must pay real estate and valorem taxes, special assessments and interest on pre-existing financing secured by the property. Cannot permanently injure or waste the property. Also cannot will the property- unless its "Pur Autre Vie"

Survivorship

Survivorship Survivorship is the automatic transfer of one property owner' interest to others upon death. Remember: Only transfers to another owner. Not outside of ownership! One type of ownership has automatic survivorship Has possible survivorship (JT) Is impossible to have survivorship , pass to heirs. Important legal idea which simplifies matters when somebody dies Avoids probate process other properties go through after an owner's death Do not confuse survivorship with heirs Survivors are other owners- not family/heirs

Remainder and Reversion

The fee simple owner who creates a life estate mst consider the future ownership of the property after the termination of the life estate. The future interest may take one of two forms Remainder interest: The grantor names someone other than the grantor to reiee title to the property when the life estate terminate. See example where the father provided that his children would inherit once his mother life estate is terminated. The children are the remainder man. Reversionary interest: The grantor does not name a remainderman, then the ownership returns to the grantor when the life estate terminates. If the grantor is deceased when the life estate terminates then the property goes to his heirs.

Severalty

The ownership of real property by only one person or entity; also called sole ownership.

Tenancy by the Entirety (Favored in NC)

Undivided unity of possession Owners must be spouses when title is received Ownership interest must be equal Both must sign deed to convey Terminated by death divorce or mutual agreement of spouses Survivorship is automatic Must be married at the time the property is acquired What about property acquired before you married- Does Not automatically convert What if we're married but don't want Tenancy by Entirety- That cool, but you got to tell the attorney this or Entirety is the default.

Life Estates

A Life estate is a freehold estate in land It is limited in duration of the life of the new owner or to the life or lives of some other designated person or persons. This form of ownership is occasionally called partial estate because it does not last forever. The person who owns the property is the own who pays the property taxes.

Tenancy in Common

A concurrent form of ownership in which each owner holds and undivided interest in the real property. Ownership interest can be unequal and the right of survivorship is not allowed.

Tenancy by the Entirety

A concurrent form of ownership reserved for property owned by spouses. Rights Of survivorship is mandatory; making the surviving spouse owner in severalty immediately upon the death of a spouse.

Types of Freehold estates that can be transferred

Fee simple estate (can pass by inheritance)- it is called estates of inheritance Defeasible fee estate (can pass by inheritance)- it is called estates of inheritance Pur autre vie estate (estate for the life of another) with remainder or reversion (can pass by inheritance)- it is called estates of inheritance Ordinary conventional life estate with remainder or reversion (does not pass by inheritance)- it terminates on death of the named person on whose life estate are based called the measuring life; they are also called estates not inheritance

Marital Life Estate

North Carolina law permits that when someone dies without a will or die with a will disinheriting a spouse or leaving him or her very little that the surviving spouse may choose an "elective share" of the estate instead.

Life Estate Pur Autre Vie

This is known as the estate for life of another Legal term is known as life estate pur autre vie. In this estate it is owned for a lifetime of some named third party called the measuring life. The measuring life has no present or future ownership in the property it only serves as a yardstick for the term of the life tenant's ownership Once the measuring life dies the estate would either revert to the original owner or become the property of the named remainderman. If the tenant should die before the measuring life, the heirs of the disease life tenant will inherit the life estate either by will or by descent.

Freehold Estates

An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate.

Freehold Estates

Freehold Estates:- (I Own It) Freehold Estates are estates of indeterminable length of ownership, such as those existing for a lifetime or forever. Freehold estates are passed from grantor (person giving the estate) to grantee (person receiving the estate) via the deed when the title to real estate is conveyed (communicated)

Nonfreehold

Non Freehold, or leasehold, estates include any estate that is not a freehold estate. A leasehold estate exists on property in addition to a freehold estate when the property owner has rented the property to a tenant. Four types of Estates- Estate for years Estate from year to year Estate at will Estate at sufferance I rent it

Joint Tenancy

The joining of two or more people to conduct a specific business enterprise. A joint venture is similar to a partnership in that it must be created by agreement between the parties to share in the losses and profits of the venture. It is unlike a partnership in that the venture is for one specific project only, rather than for a continuing business relationship.

Fee Simple defeasible (or defeasible fee)

Also known as qualified fee estate May be lost or defeated on the occurrence or nonoccurence of a specified event. The new owner must stay qualified to own the estate by obeying the deed restriction imposed on the estate by a previous owner. Restrictions can prohibit any activity It can require a specified land use will dictates which type of defeasible fee estate has been granted. Two types of defeasible estates are fee simple subject to a condition subsequent and fee simple determinable.

Right of Survivorship-

Also known as tenancy by the entirety. A concurrent form of ownership reserved for property owned by spouses. Right of survivorship is mandatory; making the surviving spouse owner in severalty immediately upon the death of a spouse.

Fee Simple Determinable

An estate in real estate that continues "so long as" a prescribed land used continues. Estate ends automatically upon the termination of the prescribed use; no lawsuit is necessary for reversion.

Fee Simple With Condition Subsequent-

An estate in real estate that prohibits a specific condition on the property. Grantor has the right to re-enter the property and reclaim ownership through legal proceedings.

Conventional life estate

Is created by grant from the current owner of the fee simple estate Only kind of estate that is NOT inheritable (estate for Tenant's Own Life Only) If it's anything other than this ONE it is inheritable. ONLY Freehold or Ownership interest which is NOT Inheritable- It will go back to the grantor. The current owner retains a reversionary interest in the property or it names a remainderman that will ultimately receive the fee simple absolute title It is limited to the lifetime of the new owner of the life estate (life tenant) Ordinary life estate ends with the death of the person to whom it was granted It is possible to have successive life estates For example: a man wants his children to have ownership of a piece of property, but he wants his mother to be able to own it for as long as she lives, so he deed the property to his mother for her life. The man's mother is the life tenant with her life being the measurement for how long she will own the estate; his children are the remaindermen. When she dies the ownership of the property will automatically transfer to to his children, who will have a fee simple absolute estate.

Fee Simple Subject to a Condition Subsequent

The estate dictates some action or activity that they new owner must not perform The former owner tenants a right of re-entry, called reversionary right, so that if the condition is broken, the former owner can retake possession of the property through court proceeding. A fee simple estate with the condition subsequent does not automatically revert to the original owner. They must go through the courts. For example: A grantor that deed his land with the deed condition that there will be no sale of alcohol on the premises is a fee simple subject to a condition subsequent . If alcohol is sold on the property the former owner has the right to acquire full ownership of the property. It will be necessary to for the the grantor or the grantor's successors to go to the courts to assert that right. There is no automatic right of reversion.

Fee Simple Determinable

The estate requires that a specified activity or land use continue. The ownership is held "so long as" or "during the period the condition or limitation is maintained. The former owner, their heirs, or their successors retain the right of reversion that automatically acquired full ownership if the special condition ceases to exist. No lawsuit is necessary of r reversion. The use of the land has been predetermined and the penalty for noncompliance has been predetermined. For example: When an owner grants land as a fit to a church, so long as the land is used only for religious purposes, it is known as fee simple determinable. The church has the full bundle of right in the property the grantor/owner had, including ownership, with the exception of one of the stick in the bundle known as the control "stick" in this case. If the church ever decides to use the land for a non religious purpose, the property automatically reverts back to the owner who granted the land as a gift, or that owner's heir(s).

Tenancy in Common

is a parcel of real estate may be owned by two or more people/ entities. Important characteristic of tenancy in common is that while co-owners have unity of possession, they may have unequal share. Although a tenant in common may hold may hold for example one half or one third share in a property , it is impossible to distinguish physically which specific half or third of the property the tenant in common owns. The deed creating a tenancy in common may or may not state the fractional shares held by each co-owner. If no fractions are state he tenants are presumed to hold equal shares. Each owner holds an undivided interest in severalty and can sell, convey mortgage ro transfer that interest through the right of partition. On the death of a co-owner, that tenant undivided interest passes to the heirs through a probate proceeding. The interest of deceased tenant in common does not pass to another co-owner tenant in common unless the surviving co-owner is an heir in the deceased owners will or purchasing the deceased owners share. Separate, undivided interest and title, but equal right to possess and use Two or more owners; at death, interest goes to owners heirs Each owner can encumber or convey their portion Default ownership for unmarried people Doesn't have to equal portions Suit for partition.