U7. Freeholds

Question 1

What is a freehold estate in land?

Answer 1

Freehold estates are indefinite, and give the owner a legal estate in that piece of land and they can dispose of or carry out any other registrable disposition with that leasehold estate during the term of the lease.

Fee simple absolute in possession.

Question 2

When can a freehold estate go back to the crown

Answer 2

Upon Death, the freehold estate will return back to the crown if there is no will (will intestate) or no family member to inherit the land.

Question 3

What is a Life Estate?

What are the 2 types?

Answer 3

Life Estates are equitable interests behind a trust in freehold estates. The person with a life estate will be able to occupy or use the property.

There are 2 types of Life Estates:

1. Fee Simple Absolute in Remainder (give in the future)

      2. Fee Simple Absolute in Reservation (Take back in the future)

Question 4

What is a Fee Simple Absolute in Remainder Life Estate?

Answer 4

An equitable interest behind a trust which:

Allows a freehold or leasehold estate owner to grant a life estate, which will pass to another specified person by the original estate holder upon the life tenants death

Question 5

What is a Fee Simple Absolute in Reservation Life Estate?

Answer 5

An equitable interest behind a trust which:

Allows a freeholder or leaseholder estate owner to grant a life estate, which will transfer back to then original owner upon the life tenants death

Question 6

How long will a life estate last?

Answer 6

For the life of the person it was granted too

Question 7

What is the person who has the benefit of a life estate called?

Answer 7

Life Tenant

Question 8

What is a life tenant?

Answer 8

Someone who has a life estate, which gives them the right to use or occupy property for their life.

Question 9

Recall the Apple Tree Cottage example of how a life time interest would operate?

Answer 9

1. A owns the freehold estate of Appletree cottage
2. A grants a life interesting Apple Tree cottage to B
3. B has the right to live in or earn rent from the Appletree cottage during their life time
4. Upon B’s death, Apple tree cottage will transfer back to A

Question 10

Will a life estate owner own the freehold?

Answer 10

No, The life estate owner is holds a ‘fee simple absolute in reservation / Remainder’, rather than a ‘fee simple absolute in possession’ and thus is not the legal freeholder owner, only a equitable interest will be owned.

Question 11

What is the diffrence between a life estate given in Remainder vs in Reservation?

Answer 11

1. Remainder - Upon the life tenants death, the interest will transfer back to a person specified by the freehold owner
2. Reservation - Upon the life tenants death, the interest will transfer back to the original freehold owner

Question 12

What is a Determinable Fee Simple?

Answer 12

This will automatically terminate the ownership of the freehold legal estate if a specific but unpredictable event occurs, which would have been specified at the time of the original transfer.

	For Example: 
	
	'Jennifer agrees to transfer her property to her son David on the following terms 'The property will be transferred in fee simple until David Wins the Lottery' 

Thus, if David wins the Lottery, the ownership of the freehold would automatically transfer back to Jennifer

Question 13

What is the diffrence between a Life Estate v Determinable Fee Simple?

Answer 13

Determinable Fee Simple - The transfer of the title will happen on a SPECIFIED BUT UNPRETICABLE EVENT

Life Estate - Will transfer on death (not an unpredictable event)

Question 14

What is a conditional fee simple for a freehold estate?

Answer 14

This will allow for the person who transferred the estate to reclaim the estate back (if they wish - not automatically) if a specified condition was not complied with through out the ownership.

For Example:

Jennifer agrees to transfer her son, David, on the Following terms ‘The property will be transferred in Fee simple on the condition that he never divorces.’

Thus, if David Divorces, Jennifer can chose to terminate the estate and take back the freehold estate.

Question 15

What is the difference between a conditional fee simple and a determinable fee simple in a leasehold estate?

Answer 15

1. For conditional fee simple, the original transfer can chose to terminate the estate and get back the ownership of the freehold estate (Determinable is automatic)
2. For conditional fee simple, there is a specified condition, for Determinable fee simple, there is a specified unspecific condition.

Question 16

How is a freehold estate transfered?

What will happen if it is not transferred correctly?

Answer 16

1. It must be made by deed which is:
   ○ Clear on the face of it that it is intended to be a deed
   ○ Is validly executed as a deed by the parties that are subject
   to it
2. The deed must then be registered

If the above has not been complied with, there will only be an equitable interest not a legal interest.

Question 17

What can be granted from a freehold estate?

Answer 17

1. A life estate
2. Determinable Fee Simple or Conditional Fee Simple
3. A Lease