The law recognizes different interests called estates, in real property. The estate types are generally determined by the deed language, lease, or bill of sale. Real property can also be figured out by, will, land grant, etc. Although the estate is determined through which it was acquired. Estates are distinguished by the varying property rights that vest in each. Furthermore, it can also be differentiated by duration and transferability. The party enjoying this estate is called a “tenant”.

6 types of estates in REAL PROPERTY

Some important types of estates in the land include:

1. Simple estate: An indefinite duration estate, which can be freely transferred. The most common and perhaps most absolute type of estate, under which the tenant enjoys the greatest discretion over the disposal of the property.

2. Fee simple conditional: An estate lasting forever as long as one or more conditions stipulated by the deed’s grantor does not occur. In such conditions, the property is reverted to the grantor. In fewer cases, the remainder of interest passes on to a third party.

3. Fee tail: An estate which, upon the death of the tenant, is transferred to his or her heirs.

4. Life estate: An estate lasting for the natural life of the grantee, called a “life tenant”. If a life estate is sold out, a sale does not change its duration, which is limited by the natural life of the original grantee.

5. A life estate per autre vie is held by one person for the natural life of another person. Such an estate may arise if the original life tenant sells her life estate to another, or if the life estate is originally granted per autre vie.

6. Leasehold: An estate of limited-term, as set out in a contract, called a lease, between the party, granted the leasehold, called the lessee, and another party, called the lessor, having a longer estate in the property.

For example, an apartment-dweller with a one-year lease has a leasehold estate in her apartment.

Lessees typically agree to pay a stated rent to the lessor. Though a leasehold relates to real property, the leasehold interest is historically classified as personal property.

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2 types of REAL PROPERTY FUTURE INTERESTS

Two important types of future interests in property laws are:

Reversion: A reversion arises when a tenant grants an estate of the lesser maximum term than his own. Ownership of the land returns to the original tenant when the grantee’s estate expires. The original tenant’s future interest is a reversion.

Remainder: A remainder arises when a tenant with a fee simple grants someone a life estate or conditional fee simple, and specifies a third party to whom the land goes when the life estate ends or the condition occurs. The third party is a remainder. The third-party may have a legal right to limit the life tenant’s use of the land.

Estates may be held jointly as joint tenants with rights of survivorship or as tenants in common. The difference between these two types of joint ownership of an estate in land is basically the inheritability of the estate and the shares of interest that each tenant owns.

Learn more: Joint Tenancy

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property laws In uncertainity

The death of a co-owner of tenants in common (TIC) deed will have a heritable portion of the estate in proportion to his ownership interest which is presumed to be equal among all tenants unless otherwise stated in the transfer deed. However, if TIC property is sold or subdivided, in some States, Provinces, etc., a credit can be automatically made for unequal contributions to the purchase price (unlike a partition of a JTWROS deed).

Real property may be owned jointly with several tenants, through devices such as the condominium, housing cooperative, and building cooperative.

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property laws in BUNDLE OF RIGHTS

Real property is unique because there are multiple rights associated with each piece of property. For example, most U.S. jurisdictions recognized the following rights: right to sell; right to lease; right to acquire minerals, gas, oil, etc. within the land; right to use; right to possess; right to develop; etc. These multiple rights are important because owners of the real property can generally do what they choose with each right.

For example, the owner could choose to keep all the rights but lease the right to drill for oil to an oil company, or the owner could choose to keep all the rights but lease the property to a tenant.

In other words, the owner can elect to keep, lease or sell the rights to the land.

For exploring more: Read Bundle of Rights

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OTHER TYPES of property ownership

Allodial title: Real property that is independent of any superior landlord. Palladium is “Land held absolutely in one’s own right, and not of any lord or superior; land not subject to feudal duties or burdens. An estate held by absolute ownership, without recognizing any superior to whom any duty is due on account thereof.

FINAL THOUGHTS

That’s it, not only do you need to understand the property laws, types of real property estate but you also need to know the ownership interests for a crystal clear understanding of your business.

You will drive instant clients to your business resulting in a better experience.

Good Real Estate Luck