Types of Estates

Estates are interests in land

An estate provides a possessor with all the rights associated with tenures (mainly the right to occupy) as well as an interest in a property

Estate ownership is the most common form of ownership today

There are 5 types of estates, namely fee simple, life, future, lease and use

Estate Ownership

Absolute right in real property; highest estate in terms of rights

It provides the most exercisable rights over land with a minimum number of limitations

Fee simple owners can, enter, gift or lease land

Fee Simple

Fee simple ownership has five limitations:1. Taxes, failure to pay which your property

may be taken away2. Interference by police3. Government’s right to regulate – including

the right to change zoning limiting use4. Escheat - the government may take away

land if its owner dies and there is no heir to take it

5. Expropriation by government for public use

Fee Simple

Owners of life estates exercise ownership rights over the estate till their death

Ownership rights for life estates are granted for the period of a lifetime

Second highest right over property

Life Estate

If a fee simple owner gives his father a life estate for a particular property, once the father dies, the property will return to the fee simple owner

The father will be able to exercise ownership rights, including the ability to use or lease the property, up until the point where he dies

Upon his death, interest in the property will revert back to the son

Life Estate

Future estate is an interest that arises in property once the life estate ends

When the life estate owner dies, the future estate becomes the fee simple owner of the property

If a son grants his father a life estate and mother a future estate, once the father dies, the mother will become the life estate. Upon the mother’s death, the son will become the fee simple owner

Future Estate

A fee simple owner grants a life estate to his wife and a future estate to his children. If the fee simple owner dies before his wife and children, they will share 50-50 ownership of the estate

In case an estate is jointly owned, if a single party wishes to lease or sell the estate, they will need the consent of the other parties

Future Estate

Leasehold estate grants rights for a limited period of time

Once the lease comes to an end, the estate expires

Tenants typically have a number of rights during their lease term, but once their leases expire, they have no rights with regards to the property

Leasehold Estate

Estate to Uses allows use of property but it does not confer ownership rights

It is a onetime method for holding lifetime ownership

For instance, if a person gives a property to his mother to stay in as long as she needs to without paying any rent or monetary compensation. Once she leaves or dies, the property will return to the fee simple owner

This estate is not used anymore

Estate to Uses

What is the best description of fee simple?◦ “Highest rights, fewest limitations”

What kind of estate is a life estate?◦ Life = life; life estate lasts for a lifetime

When can a future estate sell property without consent?◦ On death of fee simple owner, future estate becomes

fee simple What happens if lease contract in place from

when wife had life estate and child had future estate, and wife dies after contract is made?◦ Kid becomes fee simple owner and can evict tenant◦ Contract becomes void if life estate or future estate dies

RECAP

Husband is a fee simple owner. He has the most rights with the least number of limitations. He can own, lease, use, gift or sell land or anything, except:◦ Police can interfere◦ Government can expropriate◦ Government can raise taxes

If husband dies without a will, life estate and future estate will get 50-50 share in ownership – “life is wife, future are kids”

RECAP

If life estate and future estate have 50-50 share of the property, one party may not sell or lease it without consent of the other

If the life estate owner dies, the future estate owner will become fee simple owner

It operates as a cycle

RECAP

Concurrent ownership arises when two or more persons have ownership of a property at the same point in time

There are two kinds of concurrent ownership, namely joint tenancy and tenancy in common

Concurrent Ownership

Joint tenancy is typically between husband and wife

Survivorship operates in joint tenancy, which means that if one joint tenant dies, their rights transfer to the remaining joint tenant(s)

Since joint tenancies are governed by the survivorship principle, wills do not operate in joint tenancy

Joint Tenancy

Joint tenants do not have a share of interest – each joint tenant has 100% interest in the property

The four PITT unities must be present for a joint tenancy, namely possession, interest, time and title

If the four PITT conditions are not met, the tenancy is a tenancy in common

Joint Tenancy

Equal Possession:◦ Each joint tenant is entitled to equal possession of

the property, i.e. the full property◦ Joint tenants may not exclude one another from

possessing any part of the property

Equal interest◦ Each joint tenant has equal and identical interest◦ This means that a fee simple owner and a

leasehold owner cannot be joint tenants

PITT

◦ They collectively own 100% of the property; there are no shares

◦ If one party dies, the other is entitled to 100% of the property

Time◦ The joint tenants must have acquired their interest

in the property

Equal Title◦ The joint tenants must get their identical interests

in land from the same document (typically a tenancy deed)

PITT

Under tenancy in common, you own a share in the property

Survivorship does not apply, and tenants can leave their share to anyone through a will

Only unity of possession is required for tenancy in common

It is a common arrangement between friends and business partners

Tenancy in Common