Real Estate Interest and Ownership Chapter 2 Flashcards
Estate
1) The degree, quantity, nature and extent of ownership interest which a person has in real property.
2) It refers to one’s legal position of ownership-not to the amount of property owned.
3) To be an estate, an interest must be possessory or potentially become possessory, and whose ownership is measurable in terms of time duration.
Two systems of real estate ownership
1) Feudal
2) Allodial
The Allodial system features 2 types of estates.
1) Freehold
2) Less than Freehold
Freehold
Indefinite Duration
Less than Freehold
Definite duration- Lease
Types of Fee Estates- Under the category of Freehold.
1) Fee simple absolute
2) Defeasible Fee
3) Fee Tail
Inheritable
Fee simple absolute
Highest Form-Full bundle of rights. Own as long as want to.
Defeasible Fee
Can be defeated- conditions if they are not met will loose property.
Two types of Defeasible Fee
1) Fee determinable/simple absolute
2) Fee Conditional/simple defendable
Fee Determinable
Automatic- The estate could be granted as long as they do something …. Like never spend a day in jail. There is a stipulation
Fee conditional
Not automatic-a certain condition must be met to keep the building. If violated the ownership goes back to the grantor. If condition is not met, it is not automatically given back it must require the grantor to initiate a court action.
Fee Tail
Limits heirs to lineal descendants. (Blood relatives) Not legal in Arizona.
Life Estates
Freehold, Not inheritable, don’t know how long it will be. Worth less than fee estates.
Two categories of Life Estates
1) Conventional
2) Statutory
Ordinary (conventional) life estate
Limited in duration to the life of its owner or to the life of some other designated individual.
Freehold; own the property, but only for a limited time
Not inheritable- Upon the death of an individual the estate would revert to the grantor or other individual
Statutory Life Estate
called dower, curtesy, community property, and homestead.
Arizona recognizes community and homestead.
Dower
Not in AZ
The legal right in some states that a wife acquires in the property her husband holds or aquires anytime during their marriage.
Curtesy
The interest, recognized in some states, of a husbands in property owned by his wife at the time of her death.
Rights of Life Tenant
1) Sell
2) Lease
3) Encumber-A claim against or liability. Can include liens, deed restrictions, easements, encroachments and licenses.
4) Life Tenant cannot make waste/destroy
Characteristics of a life estate
Less than fee simple.
Based on the life of an other.
Only time life estate is inheritable.
Always accompanied by a second estate. (Reversion/Remainder)
Reversion
Is not considered inheritance (Backward move)
Remainder
Move with heir- forward move
A future interest in real estate created at the same time and by the same instrument as another estate, and limited to arise immediately upon the termination of the prior estate.
Homestead
To protect homestead equity to $150.000
How is homestead established
Value: Unpaid taxes Unpaid Assessments Unpaid Real Estate loans Unpaid Mechanics liens
