The notes below are intended only to supplement a complete and diligent review of the related chapter in your course text. Studying these notes alone is not expected to be adequate test preparation.

 

 

FREEHOLD ESTATES

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An estate in land defines the degree of interest one has in real property. It defines ones status in the property. To be considered an estate, however, the interest must be one that is or will become possessory.

 

A freehold estate is one that:

 

• involves ownership

• is for an unpredictable duration (in other words the period of time that one owns the property cannot be measured in advance)

 

Freehold Estates include the following:

 

A "fee simple absolute estate" is the largest possible degree of estate. It is an estate of inheritance and there is no time limit or conditions placed on its existence, it will continue indefinitely. The owner may dispose of its during his or her lifetime or by means of a will.

 

A "fee simple determinable estate" is very similar to a fee simple absolute estate with one important difference. There is a condition that must be met for ownership to continue. The property will revert back to the grantor upon the happening or non-happening of a specified event. For example, a property is sold with a condition in the deed stating that alcohol may never be sold on the property. If that condition is ever violated the property will revert back to the grantor. A fee simple determinable estate may also be referred to as a "conditional fee" or a "defeasible fee".

 

A "life estate" is ownership of real property for the duration of someone's life. In other words the owner of the life estate, referred to as the life tenant enjoys all of the rights of ownership for as long as they live. All of the rights normally associated with the bundle of rights are included except for the right to will the property. Upon the death of the life tenant their rights in the property are immediately terminated. Therefore, the property may not be left to anyone in a will. The exception to this is when the life estate is not based on the life of the life tenant, but rather it is based on the life of a third party. This is referred to as a life estate pur autre vie which means "for another's life". In other words the life tenants rights in the property will continue for as long as the third party is alive. This means that a life estate pur autre vie can be willed and the devisee's rights will continue until the death of the third party.

 

Life Estate:

Life Estate Pur Autre Vie:

 

 

At the conclusion of a life estate ownership of the property may:

 

         1. revert back to the original grantor (known as an estate in reversion)

 

Or

 

          2. be passed on to a pre-designated the third party (known as an estate in the remainder)

 

A life tenant has an obligation not to create waste. In other words he may not do anything that would materially destroy the property. He must, keep the property and reasonably good repair, pay taxes and other assessments, etc. etc.