Unit 3: National Ownership
How is a life estate different from a fee simple estate?
A life estate is limited in duration to the life of the owner or other named person. When the life tenant dies, the estate passes to the original owner or another named party. The life tenant does not have the right to pass ownership to his or her heirs.
What is the primary distinction between a freehold estate and a leasehold estate?
Duration of the owner's rights. A leasehold is temporary, even if there is no specific term, while a freehold has an indeterminate duration.
Which type of leasehold estate is commonly referred to as a periodic tenancy?
Estate from period to period.
What is the highest form of ownership interest one can acquire in real estate and why?
Fee simple estate. It includes the complete bundle of rights and the tenancy is unlimited.
Discuss how the right of possession determines what kind of estate or interest a party has in real estate.
If the interest-holder enjoys the right of possession, the estate is an estate in land. If the interest-holder does not have the right of possession, the interest is an encumbrance in the case of a private interest-holder, or some form of public interest in the case of a non-private (i.e., governmental) interest-holder.
What are a tenant's primary obligations when leasing a property?
Pay the rent on time. Maintain the property's condition. Comply with the rules and regulations of the building.
What are the essential characteristics of fee simple defeasible estates?
The property must be used for a certain purpose or under certain conditions. If the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.
Define "undivided interest" in real estate.
When two or more owners share ownership, the interest of an individual owner is undivided and indivisible in the sense that it pertains to a fractional part of the entire estate, not to a physical portion of the real property.
What primarily distinguishes freehold estates from leasehold estates?
Whether an estate in land is a freehold or leasehold estate depends on the length of time the holder may enjoy the right to possess the estate, the relationship of parties owning the estate, and specific interests held in the estate. The duration of the owner's rights in a freehold cannot be determined: they may last for a lifetime, for less than a lifetime, or for generations beyond the owner's lifetime. In a leasehold, they have a specific duration, as represented by the lease term.
The fee simple freehold estate is called the highest form of ownership interest, even though a fee simple defeasible carries some restriction on usage. Why are other estates less desirable?
With all other estates in land-- life, leasehold-- the holder of the estate cannot control what happens to the estate in the future. The life estate reverts or is remaindered; the leasehold terminates when the lease expires.
