Chapter 6 Estates And Interest

Question 1

Freehold Estates

Answer 1

Are Estates of indeterminable length. A person may own that a state for lifetime or forever.

Question 2

What are the three freehold estates that are recognized in New Jersey?

Answer 2

Fee simple
Fee determinable
Life estate

Question 3

Fee simple estate

Answer 3

And estate in fee simple is the highest type of interest and real estate recognize by law. A fee simple estate is one in which the holder is entitled to all rights in the property

Question 4

Fee Determinable

Answer 4

In New Jersey a fee determinable (also known as a conditional fee or feasible fee) is an estate in land that can be terminated on the occurrence or nonoccurrence of a specific event. And example is John Smith conveys (transfers title to) 1000 acres to the Jones foundation as long as it is maintained as a “wildlife preserve”. Five years later the Jones foundation decides to build its corporate headquarters on his land. Title (ownership) to the land reverts to Smith or to Smith’s heirs. This future interest is called a possibility of reverted. If Smith’s original conveyance stated that the land will go to Bill Brown or his heirs if the Jones foundation violated terms then Brown would become the remainderman, a third-party named in the instrument.

Question 5

Life Estate

Answer 5

A life estate is limited to the life of a specific person. The owner of a normal life estate does not have the right to pass on the ownership to heirs, because the life estate ends with the death of the owner. For example, Allan gives a life estate to Betty for as long as she lives. Upon Betty’s death the disposition of the property is governed by Allan’s original conveyance. If Allan maintains a reversionary interested in the property will revert to Allan or his heirs.

Question 6

Encumbrances

Answer 6

An encumbrances is a claim, lien, change, or liability attached to and binding on rel property; it affects or limits it’s use, value, or title.

Question 7

Encumbrances are divided into two general classifications.

Answer 7

1) Liens

2) Physical or usage encumbrances, which include restrictions, easements, licences and encroachments

Question 8

Lien

Answer 8

Is a financial claim against a property that provides security for a debt or obligation of the property owner. If the obligation is not repaid, the lienholder or creditor, has the right to have it paid out of the property, usually from the proceeds of a court sale

Question 9

Lien classifications

Answer 9

Voluntary or involuntary Lien

General Lien

Question 10

Voluntary Lien

Answer 10

Is created by the property owner. Ex gives the bank a claim against the real estate for a mortgage loan.
A mortgage is a voluntary Lien.

Question 11

Involuntary Lien

Answer 11

Is a financial company claim against the property that is imposed without the owners consent. Example Federal Taxes, IRS Taxes are General Involuntary liens.

Question 12

General Lien

Answer 12

Affects all the property someone owns. Example. Money Judgement, federal estate, state inheritance taxes, & IRS Taxes.

Question 13

Specific Lien

Answer 13

Is placed against one parcel of Real Estate only. Example Special Assessment liens, Ad Volorem Tax Liens, Mortgage Lien, & Construction liens.

Question 14

Effects of Liens on Title

Answer 14

The property is not worth as much when it has Liens against it.
Encumbrances run with the land & are still binding after a sale.
But Liens do not survive foreclosure.

Question 15

Types of Easements

Answer 15

Easement Appurtenant
Easement in Gross
Easement by necessity
Easement by prescription

Question 16

Easement Appurtenant

Answer 16

Grants rights to the owner of an adjacent parcel of land.

For an easement Appurtenant to exist, there must be two adjacent tracts of land owned by different parties.

Question 17

Easement in Gross

Answer 17

A utility company owns and easement in gross.

Question 18

Easement by necessity

Answer 18

If a parcel of property is land locked. This give a person access to their property via someone’s property

Question 19

Easement by prescription.

Answer 19

An easement acquired by continuous, open, uninterrupted, exclusive, and adverse use of the property for the period of time prescribed by state law. NJ is 20 years

Question 20

Servient Estate

Answer 20

The tract over which the easement runs.

Question 21

Dominant Estate

Answer 21

The tract that is to benefit from the easement.

Question 22

Encroachment

Answer 22

The extension of an improvement beyond the land of the owner, illegally intruding on land of an adjoining owner.

Question 23

License

Answer 23

A permission to enter the land of another for a specific purpose. A licence may be withdrawn.

Question 24

Deed Restriction

Answer 24

Are restrictive clauses added to a deed when property is conveyed that are established by the seller to restrict future owners’ use of the property.

Question 25

Lis pendens

Answer 25

Notice that a lien may be filed

Question 26

Party wall

Answer 26

Is a wall of a building that straddles the boundary lines between two owners’ lots Each lot owners owns half of the wall.