Part 3 Flashcards
Rights and Interests in Real Estate
An owner’s degree, quantity, nature, and extent of interest(s) in property is called what?
Estate.
The degree, nature, and extent of interest that a person has in land is called what?
Estate in land.
Estates are distinguished by their duration and fall into two legal categories—___________ and ____________ ____________.
freehold (indeterminate
duration) and leasehold (defined duration) estates.
Estates > Freehold estate or Estates > Leasehold estate
- Present or future possession
- Indeterminate duration
- Form of ownership
All fall under which one of the two main legal categories for estates?
The characteristics of a freehold estate.
Estates > Freehold estate
The most complete form of ownership w/ unlimited duration and subject only to governmental powers is called what?
Fee simple absolute
Freehold estates > Fee simple estate > Fee simple absolute
Ownership subject to the occurrence or non-occurrence of a specific event. The two types of specific events are an estate 1) qualified by a special limitation (so long as this doesn’t happen) and 2) subject to a condition subsequent (so long as this does happen).
Fee simple defeasible
Freehold estates > Fee simple estate > Fee simple defeasible
An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease.
Leased fee interest
Freehold estates > Fee simple estate > Leased fee interest
A type of ownership that pertain to the rights of use, occupancy, and control, limited to the lifetime of a designated party is called what?
Life estate, sometimes referred to as the life tenant. The grantor retains a future interest in the property; namely that when the grantee dies, the property title reverts back to the grantor or a remainder interest and not necessarily an heir of the deceased grantee.
Freehold estate > Life estate
A future possessory interest in property that is given to a third party and matures upon the termination of a limited or determinable fee.
Remainder interest
Freehold estate > Life estate
- The tenant has possession of the property
- Defined period of time or specified conditions
- Reversion of possessory rights (that is, reverts back to the owner)
All fall under which one of the two main legal categories for estates?
Characteristics of leasehold estates
Estates > Leasehold estate
The property owner holding a fee simple estate with a leased fee interest (this is a future interest) is called what?
Lessor (the landlord).
Estates > Freehold estates > Fee simple estate > Leased fee interest
The party with a leasehold interest is called what?
Lessee (the tenant).
Freehold estates > Fee simple estate > Leased fee interest
Type of estate where tenancy is for a definite or fixed period of time, not necessarily in years.
Estate (tenancy) for years
Estates > Leasehold > Estate for years
Type of estate (tenancy) is for an indefinite period of time with no specific expiration date. Notice must be given to terminate the lease.
Estate (tenancy) from period to period
Estates > Leasehold > Estate from period to period
Type of estate (tenancy) is for an unspecified period of time and similar to a tenancy from period to period except that it never originated with any specific term.
Estate (tenancy) at will
Estates > Leasehold > Estate at will
Type of estate created when a tenant lawfully takes possession but stays after the lease expires without the consent of the property owner.
Estate (tenancy) at sufferance
Estates > Leasehold > Estate at sufferance
Any claim or liability that affects or limits the title to property. This can affect the title such as a mortgage or other lien, or it can affect the physical condition of the property such as an easement. This cannot prevent the transfer of possession, but it does remain after the transfer.
Encumbrance.
The right to use another’s land for a stated purpose.
Easement.
Encumbrances > Non-lien encumbrances
An easement that is attached to, benefits, and passes with the transfer of the dominant estate; runs with the land for the benefit of the dominant estate and continues to burden the servient estate.
Easement appurtenant
Encumbrances > Non-lien encumbrances
An easement that benefits a legal person or entity (individual, corporation, partnership, LLC, government entity, etc.) and not a particular tract of land; an easement having a servient estate but no dominant estate.
Easement in gross
Encumbrances > Non-lien encumbrances
Trespassing on the domain of another.
Encroachment.
a.k.a trespass
Encumbrances > Non-lien encumbrances
A provision written into a deed that limits the use of land. _________ _________ usually remain in effect when title passes to subsequent owners.
Deed restrictions
Encumbrances > Non-lien encumbrances
- Revocable oral or written agreement granting privilege to use property
- Not an estate or an interest in land (and thus not an encumbrance)
- Not assignable and can’t be sold
- A personal agreement usually granted for a specified period of time
These all fall under what?
**Licenses **are NOT encumbrances, but we give them special mention here because they are sometimes labeled incorrectly as encumbrances.
A clause found in legal instruments and conveyances that creates a new right or interest on behalf of the grantor. While title passes to the grantee, some use or income is reserved for the grantor. ___________ may include mineral rights, rental income, or easements.
Reservation
Encumbrances > Non-lien encumbrances
A monetary claim against a property is called what?
Ex: Property tax, first mortgage, judgements, etc
Liens.
Encumbrances > Liens
Reserved by the property owner during a land conveyance is called what?
Reservations
Ex: easement by reservation. In simple terms, it means that even though you may own a piece of property, someone else can enjoy certain rights to use it.
Encumbrances > Non-lien encumbrances
A lease is a type of encumbrance that affects the use of physical condition of a property, true or false?
True.
Encumbrances > Non-lien encumbrances
Restrictions and leases affect the owner’s ability to _________ a property.
ability to use a property.
The holder of a remainder interest in a life estate is known by what term or phrase?
the remainderman
Estates > Leasehold estate
All liens are encumbrances but not all encumbrances are liens, true or false?
True.
This ownership lasts indefinitely and can be passed down to your heirs.
Fee simple estate.
Estates > Freehold estate > Fee simple estate
David purchased an 80-acre parcel with 75 acres being tillable land. After remodeling the farmhouse, David decided to lease the tillable portion of the land for the next five years. One year into the lease, David’s daughter moved back home. He would like to build her a house on several acres of his land that is now leased. Which response best describes ownership in this situation?
David has a leased fee interest in the tillable portion of the property. Although he is the current owner, he cannot begin constructing his daughter’s house until the lease expires.
Freehold estates > Fee simple estate > Leased fee interest
Bill owns much of the land surrounding Roosevelt Elementary School where he attended as a youth. 15 years ago Bill conveyed a large vacant parcel to the school so long as it is used for physical education activities such as soccer, football, and baseball. The school has recently developed plans for expansion into the area to increase the size of its outdated library. Which selection best supports the above situation?
Fee simple defeasible estate indicates the property would revert back to Bill since the library expansion violates the estate’s conditions for its use.
Freehold estates > Fee simple estate > Fee simple defeasible
Jeffrey cuts hair in an upscale salon in the downtown area. The shop occupies the main floor and there are several apartments on the second level. The entire building is owned by an out-of-town landlord. Recently, a tenant moved out and an apartment was available for much less than the going rate of comparable rentals. Jeffrey acted quickly and signed a two-year lease. He relisted the apartment at a higher rent to a new tenant, Angela. The leasehold estate is best described as
subleased to Angela
Leasehold > Estate for years > Sublease/Subleasehold estate
Jerald and Cindy inherited her grandmother’s home which includes both a large two-story, one-unit dwelling and an additional rental property located behind the main house on the same lot. Access to the rental property requires the use of the driveway of the primary residence. They would like to sell off the rear portion of the site with the rental dwelling, but the new owner needs access by using their driveway. What type of encumbrance is needed to resolve this issue?
easement appurtenant
Encumbrances > Non-lien encumbrances
Hooper gave permission to a nearby business neighbor to place a sign on his corner property to advertise the neighbor’s liquidation sale. What has Hooper given his neighbor?
a license
Which of the following is an example of an “easement in gross?”
easement for a public sidewalk
Encumbrances > Non-lien encumbrances
In order to make his retirement community more picturesque and to add to the site values, the developer of Reed Lake Subdivision placed a wide, shallow lake in the center of his development. However, the developer wanted no docks to be permitted on the sites that front the lake. What is the best way for the developer to limit the future owner’s rights in the development and keep the lake free of boat docks?
incorporate a deed restriction to control the construction of docks on any of the lakefront properties
Jason is getting ready for a construction firm to install a fence on his property. After the survey was performed, it was clear that four feet of the neighbor’s above-ground pool are located on Jason’s property and in the direct line of the proposed fence. Which of the following best describes this situation?
The neighbor will have to move their pool since it is considered personal property and is encroaching on Jason’s property.
Don Bradstreet owns several rental properties including a two-bedroom house. Eight months ago, a tenant moved into this house and leased it for six months. After paying the rent in a timely manner for about four months, Mr. Bradstreet began having difficulty collecting the rent and asked the tenant to vacate the premises. Now the lease has been expired nearly two months, but the tenant is still living in the house. The tenant
has an estate at sufferance.
