UNIT 4 INTERESTS IN RE

Question 1

An estate in land

Answer 1

An estate in land defines the degree, quantity, nature, and extent of an owner’s interest in real property. Many types of estate exist, but not all interests in real estate are estates. To be an estate in land, an interest must allow possession, mean- ing the holding and enjoyment of the property either now or in the future, and must be measured according to time. Historically, estates in land have been classi- fied primarily by their length of time of possession.

Question 2

A freehold estate

Answer 2

A freehold estate lasts for an indeterminable length of time, such as for a lifetime or forever.

Question 3

fee simple estate

Answer 3

fee simple estate that continues for an indefi- nite period and may be passed along to the owner’s heirs.

Question 4

a life estate

Answer 4

A freehold estate can also be a life estate that is held only for the lifetime of a person (who may not be the holder of the life estate) and ends when that individual dies

Question 5

leasehold estate

Answer 5

A nonfreehold estate is one for which the length of time of the property’s use can
be determined. A nonfreehold estate is commonly referred to as a leasehold estate

Question 6

fee simple absolute,

Answer 6

fee simple absolute, is the highest interest in real estate recognized by law. Fee simple ownership is ownership in which the holder is enti- tled to all rights to the property by law. This estate is intended to run forever. Upon the death of the owner of a fee simple estate, the property interest passes to
■■ the decedent’s co-owner, if there is one and the co-ownership was accompa-
nied by a right of survivorship;
■■ the person or persons specified in the decedent’s will (the devisees); or
■■ if the decedent has left no will, to the person or persons designated by the
state’s law of intestate succession.
The right to use a fee simple estate is limited only by public and private restric- tions, such as zoning laws and restrictive covenants.

Question 7

A fee simple defeasible

Answer 7

A fee simple defeasible estate is a qualified fee estate that is subject to the occurrence or nonoccurrence of some specified event.

Question 8

A fee simple determinable

Answer 8

A fee simple determinable is a fee simple defeasible estate that may be inherited. This estate is qualified by a special limitation (which is an occurrence or event). The language used to distinguish a special limitation—words such as so long as or while or during —is the key to creating this special limitation. The former owner retains a possibility of reverter, which is an interest that can be transferred to some- one else. If the limitation is violated, the holder of the possibility of reverter (or heir or successor) can reacquire full ownership with no need to bring a legal action in court. The title is automatically transferred to the person who holds the pos- sibility of reverter.

Question 9

fee simple subject to a condition subsequent

Answer 9

fee simple subject to a condition subsequent, an owner gives real estate on condition of ownership, which means there is a difference in the way the estate will terminate if there is a violation of the condition. With a fee simple subject to a condition subsequent, the estate does not automatically terminate upon viola- tion of the condition of ownership. The owner (or the owner’s heir or successor) has the right of reentry but must bring a legal action in court to assert this right.

Question 10

future interest

Answer 10

In the defeasible fee estates, the possibility of reverter (fee simple determinable) or right of entry (fee simple subject to a condition subsequent) will only be possible at some time in the future, and may never take effect. Each of those rights thus is considered a future interest.

Question 11

A life estate

Answer 11

A life estate is a freehold estate limited in duration to either the life of the holder of the estate or the life of some other designated person or persons.
Unlike other freehold estates, a life estate based on the life of the holder of the estate is not inheritable. It passes to the future owner according to the provisions by which the life estate was created

Question 12

life tenant

Answer 12

The holder of a life estate is called a life tenant. A life tenant is not a renter like a tenant associated with a lease. A life tenant is entitled to the rights of owner- ship and can benefit from both possession and ordinary use, and profits arising from ownership, just as if the individual were a fee simple owner. The life tenant’s ownership may be sold, mortgaged, or leased, but it is always subject to the finite limitation of the life estate.

Question 13

a life estate pur autre vie

Answer 13

A life estate may also be based on the lifetime of a person other than the life tenant. Although a life estate is not considered an estate of inheri- tance, a life estate pur autre vie (for the life of another) provides for inheritance of the property right by the life tenant’s heirs, but the right exists only until the death of the identified person or persons. A life estate pur autre vie is often created for people who are physically or mentally incapacitated in the hope of providing incentive for someone to care for them. More than one person could be identi- fied as the measuring life; for instance, a life estate could be granted to a surviving brother by a deceased property owner for the life of the surviving brother’s chil- dren. As long as one of the children survives, the life estate is in control of the life tenant or the life tenant’s successor.

Question 14

Remainder interest

Answer 14

Remainder interest— The creator of the life estate may name a remainder- man as the person to whom the property will pass when the life estate ends.

Question 15

Reversionary interest

Answer 15

Reversionary interest— The creator of the life estate may choose not to name a remainderman. In that case, ownership returns to the original owner upon the end of the life estate

Question 16

A legal life estate

Answer 16

A legal life estate is not created by a property owner, but rather is established by state law. It becomes effective automatically when certain events occur.

Question 17

Dower

Answer 17

Dower is the life estate of a wife in the real estate of her deceased husband.

Question 18

Curtesy

Answer 18

Curtesy is a life estate of a husband in the real estate of his deceased wife.

Question 19

Uniform Probate Code (UPC).

Answer 19

The UPC gives a surviving spouse the right to an elective share on the death of the other spouse, if the surviving spouse is not satisfied with the decedent’s disposition of the property by will. Community property states do not use dower and curtesy.

Question 20

HOMESTEAD

Answer 20

A homestead is a legal life estate in real estate occupied as the family home. In effect, the home (or at least some part of it) is protected from most creditors during the occupant’s lifetime. In states that have homestead exemption laws, a portion of the land or value of the property occupied as the family home is exempt from certain judgments for debts, such as charge accounts and personal loans, but not a mortgage for the purchase or improvement of the property. If a debt is secured by the property, including funds advanced under a home equity line of credit, the property cannot be exempt from a judgment on that debt. The homestead also is not protected from real estate taxes billed against the property.

Question 21

An encumbrance

Answer 21

An encumbrance is a type of interest in real estate that does not rise to the level of ownership or possession, yet still gives an individual, business, or other entity some degree of use or control of the property

Question 22

A lien

Answer 22

A lien is a charge against property that provides security for a debt or an obligation of the property ownerReal estate taxes, mortgages, judgments, and mechanics’ liens all represent possible liens against an owner’s real estate.

Question 23

Covenants, conditions, and restrictions (CC&Rs)

Answer 23

Covenants, conditions, and restrictions (CC&Rs) are used by a subdivision developer to maintain specific standards in a subdivision, such as by requiring adherence to certain architectural or design specifications for improvements.

Question 24

An easement

Answer 24

An easement is the right to use the land of another for a particular purpose.

Question 25

dominant tenement

Answer 25

The parcel that benefits from the easement is known as the dominant tenement

Question 26

servient tenement

Answer 26

the parcel over which the easement runs is known as the servient tenement.

Question 27

cross easement

Answer 27

The reciprocal interest of each owner in the property of the other is often referred to as a cross easement.

Question 28

An easement in gross

Answer 28

An easement in gross is an individual or company interest in or right to use someone else’s land. (See Figure 4.3.) A railroad’s right-of-way is an easement in gross, as are the rights-of-way of utility easements (such as for a pipeline or power line). Commercial easements in gross may be assigned, conveyed, and inherited. Personal easements in gross are usually not assignable. Generally, a personal ease- ment in gross terminates on the death of the easement owner.

Question 29

An easement by necessity

Answer 29

An easement that is created when an owner sells a parcel of land that has no legal access to a street or public way except over the seller’s remaining land is an easement by necessity. An easement by necessity is created by court order based on the principle that owners must have the right to enter and exit their land—the right of ingress (enter) and egress (exit); they cannot be landlocked. Remember, this form of easement is called an easement by neces- sity; it is not merely for convenience.

Question 30

easement by prescription,

Answer 30

If the claimant has made use of another’s land for a certain period of time as defined by state law, an easement by prescription, or a prescriptive easement, may be acquired. The prescriptive period generally runs from 10 to 21 years. The claimant’s use must have been continuous, nonexclusive (the owner isn’t excluded from using that part of the property), and without the owner’s permission.

Question 31

successors in interest

Answer 31

o tack on one person’s possession to that of another, the parties must have been successors in interest, such as a deceased individual and the deceased’s heir, a landlord and a tenant, or a seller and a buyer.

Question 32

A license

Answer 32

A license is a personal privilege to enter the land of another for a specific purpose. A license differs from an easement in that it can be terminated or canceled by the owner of the property. If the right to use another’s property is given orally or infor- mally, it generally is considered to be a license rather than an easement. A license ends with the death of either party or with the sale of the land.

Question 33

encroachment

Answer 33

When a building, fence, or driveway illegally extends beyond the boundar- ies of the land of its owner or legal building lines, an encroachment occurs.

Question 34

Eminent domain

Answer 34

Eminent domain is the right of the government to acquire privately owned real estate for public use.

Question 35

A lis pendens (Latin for litigation pending

Answer 35

A lis pendens (Latin for litigation pending) is a notice filed in the public record of a pending legal action affecting the title to or possession of property. While it does not have a physical effect on property, the lis pendens creates a “cloud on the title” to the property, which may prevent the property from being sold or further encumbered. Recording of a lis pendens should act as an incentive to the property owner to resolve the underlying dispute. When the matter is resolved, the party who filed the lis pendens will record a release to clear the title.

Question 36

Condemnation

Answer 36

Condemnation is the process by which the government exer- cises this right, by either judicial or administrative proceedings.

Question 37

Inverse condemnation

Answer 37

Inverse condemnation is an action brought by a property owner seeking just com- pensation for land adjacent to land used for a public purpose when the property’s use and value have been diminished.

Question 38

ESCHEAT

Answer 38

Escheat is a process by which the state may acquire privately owned real or per- sonal property. State laws provide for ownership to transfer, or escheat, to the state when an owner dies and leaves no heirs (as defined by the law) and there is no will or living trust instrument that directs how the real estate is to be distributed.