Chapter 4 · National foundations
Estates and Forms of Ownership
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Two different questions
An estate describes the nature and duration of a person's possessory interest. A form of ownership describes how the interest is held, alone or with others. A person can own a fee simple estate in Severalty Sole ownership by one legal person or entity. See Chapter 4. Glossary, and two people can own fee simple interests as tenants in common. Do not confuse duration with the number of owners. S05 S10
Freehold estates
Fee simple absolute The broadest conventional inheritable freehold estate without a special defeasance condition. See Chapter 4. Glossary is the broadest usual private ownership estate. It has potentially unlimited duration and is inheritable, but remains subject to taxes, land-use laws, private restrictions, and other valid interests. “Absolute” does not mean freedom from government authority.
A fee simple defeasible may end if a stated condition is violated. In the traditional distinction, a fee simple determinable ends automatically when its limitation occurs; the Grantor The party conveying a property interest. See Chapter 7. Glossary retains a possibility of reverter. A fee simple subject to a condition subsequent gives the holder of a right of entry a power to seek termination after Breach Failure to perform an enforceable obligation without a valid excuse. See Chapter 10. Glossary. The wording and state law matter; the same casual phrase in a question should not override an expressly identified estate.
A Life estate An estate measured by a specified person's life. See Chapter 4. Glossary lasts for a measuring person's life. A life estate Pur autre vie A life estate measured by another person's life. See Chapter 4. Glossary is measured by another person's life. A life tenant can generally transfer the interest held, but cannot extend it beyond the measuring life. A life tenant must avoid Waste Conduct or neglect improperly harming another's interest in property, such as the future interest after a life estate. See Chapter 4. Glossary, meaning injury to the interests of future owners, and commonly bears ordinary carrying obligations under applicable law.
A Remainder A future interest in another person following a prior estate. See Chapter 4. Glossary passes to a designated third person after the prior estate ends. A Reversion An interest returning to the grantor or lessor after a lesser estate ends. See Chapter 4. Glossary returns to the grantor or the grantor's successors. Neither should be confused with a possibility of reverter following a determinable fee. S05 S10
Example. “To Jordan for life, then to Casey” gives Jordan a life estate and Casey a remainder. “To Jordan for life” without a later Grantee The recipient of a conveyed property interest. See Chapter 7. Glossary generally leaves a reversion with the grantor. If Jordan sells Jordan's interest, the buyer does not receive a new lifetime measured by the buyer's life.
Leasehold estates
An Estate for years A tenancy for a defined term, even when shorter than one year. See Chapter 18. Glossary has a defined beginning and ending. It need not last a full year; a three-month fixed term can qualify. A Periodic tenancy A tenancy continuing through recurring periods until properly ended. See Chapter 18. Glossary renews for successive periods until properly terminated. An estate at will continues with permission without a fixed term, subject to required notice and law. A Tenancy at sufferance A holdover situation after lawful possession has ended, subject to law and later conduct. See Chapter 18. Glossary describes a holdover occupant who entered lawfully but remains without permission after the right to possess ends. These traditional labels coexist with modern statutory protections. S14
A Leasehold A tenant's possessory interest under a lease or recognized tenancy. See Chapter 4. Glossary is a right to possess rather than ownership of the landlord's Reversion An interest returning to the grantor or lessor after a lesser estate ends. See Chapter 4. Glossary. The landlord's interest can be sold subject to a lease that remains enforceable.
Severalty and co-ownership
Severalty Sole ownership by one legal person or entity. See Chapter 4. Glossary means ownership by one legal owner. A corporation or limited liability company can own in severalty even when many people own the entity.
Tenancy in common Co-ownership of undivided shares without ordinary automatic survivorship. See Chapter 4. Glossary generally permits unequal ownership shares with an undivided right to possess the entire property. Each owner's interest is ordinarily transferable and inheritable; it does not automatically pass to the other owners at death. “Undivided” means a one-third interest is not automatically ownership of the eastern third.
Joint tenancy A co-ownership form conventionally including survivorship, subject to state creation and severance rules. See Chapter 4. Glossary includes a right of survivorship when properly created and maintained. Traditional teaching uses the unities of time, Title The legal ownership interest or rights in property, distinct from the deed documenting transfer. See Chapter 7. Glossary, interest, and possession. Statutes may change creation or Severance Removing an attached item from realty, potentially converting it to personal property. See Chapter 2. Glossary rules. An individual joint tenant's transfer may sever that tenant's survivorship interest. A will generally cannot redirect an interest that passes by valid survivorship.
Tenancy by the entirety A marital co-ownership form recognized in certain jurisdictions. See Chapter 4. Glossary is a marital form recognized in some jurisdictions, commonly with survivorship and special transfer or creditor rules. Community property A marital-property system recognized in certain jurisdictions, subject to detailed local rules. See Chapter 4. Glossary is a marital-property system recognized in certain jurisdictions. It is not the same as joint tenancy, and survivorship is not inherent in every community-property arrangement. Partition Division or judicial disposition of co-owned interests under applicable rules. See Chapter 4. Glossary may divide co-owned property or result in a court-ordered sale where legally available. S05
Common-interest ownership
In a Condominium Separate unit ownership combined with an interest in common elements. See Chapter 4. Glossary, an owner typically owns a separate unit and an undivided interest in common elements. An association administers common affairs under governing documents. Ownership may carry Assessment A valuation or charge under a tax or improvement system; context determines meaning. See Chapter 20. Glossary, use restrictions, and special-assessment exposure.
In a Cooperative An ownership arrangement commonly involving shares and associated occupancy rights. See Chapter 4. Glossary, a corporation commonly owns the building; a resident owns shares and receives occupancy rights through a proprietary lease. The resident generally does not receive a Deed An instrument used to convey an interest in real estate. See Chapter 7. Glossary to the apartment itself.
A planned development may involve separate ownership of land and improvements with association obligations. “Townhouse” often describes architecture, not a definitive legal form of ownership. A timeshare may be a deeded interest or a contractual right to use accommodations. Know the interest actually sold. S05
Trusts and business entities
A trust commonly separates legal Title The legal ownership interest or rights in property, distinct from the deed documenting transfer. See Chapter 7. Glossary held by a Trustee A party holding property, powers, or duties under a trust or deed-of-trust arrangement. See Chapter 4, Chapter 15. Glossary from beneficial interests held for beneficiaries. The trust instrument and law define the trustee's powers. Partnership, corporate, and limited-liability-company ownership require verification of authority to sign. An individual's job title is not proof that the person can sell an entity's property.
Do not recommend a vesting form solely from a memorized chart. Tax treatment, inheritance, creditor protection, relationship status, and local law require professional advice.
Which arrangement usually has inheritable shares without automatic survivorship: tenancy in common or joint tenancy?