Do You know What Estates and Title Terms in Real Property mean? Learn here.


Updated from a previous post in July 2014.

Have you ever wondered what the differences of holding title or estate in a property are? Do you want to know what they mean to you exactly as it relates to Real Estate?

Reading the below terms and definitions will help clear up the common confusion in holding title/estate in Real Property (Real Estate).

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>Estates in Real Property

Fee Simple: this means absolute and complete ownership, subject only to governmental restrictions. Ownership interest with complete power to use, dispose of, and to allow the property to descend to heirs. (Ex: ownership of Residential home)

Life Estate: this means ownership of the property for only the lifetime of a specific individual or individuals. (Ex: ownership of Residential home for lifetime only)

Estate for Years: this means tenancy for a specified fixed term; terminates automatically once term is up. (Ex: Residential lease terminating at end of term; no notice needed)

Periodic Tenancy: this means estate for a period of time with renewal options and no fixed termination date, unless otherwise stated with notice. (Ex: Residential lease renews automatically with previous time terms)

Tenancy at Will: this means Tenant has possession of property with the landlord’s consent for an indefinite period; expires upon the death of the Tenant or Landlord. (Ex: Residential lease)

Tenancy at Sufferance: this one is the lowest type of estate; this occurs when a Tenant who came into possession of a property lawfully, under a valid lease, holds over after the lease has expired without consent of the landlord. (Ex: Residential lease)

 

>Title in Real Property

Title to real property may be held in two ways; Ownership in Severalty or Concurrent Ownership.

  • Ownership in Severalty: this happens when one person holds tittle to property individually; the property is owned in severalty. Real Property may be owned in severalty by a natural person (a human being) or an artificial person (such as a corporation, a city, or state).
  •  Concurrent Ownership: this happens when title is held by two or more individuals.

 

Types of Concurrent Ownership:

Tenancy in Common: is the most basic form of ownership. In a Tenancy in Common, two or more individuals each hold separate title to an undivided interest in a single piece of property. Each tenant in common has the right to share possession of the whole property, not just a specified part of it. Tenants in common may have equal or unequal interests, have no right of survivorship, and heirs inherit interest of original owner.

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In the event Owner C dies, this happens:

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Joint Tenancy: in this form of ownership, two or more individuals are joint and equal owners of the property. Joint Tenancy has right of survivorship, in the event of death of one of the joint tenants. This one offers no rights to heirs.

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In the event Owner C dies, this happens:

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Community Property: in this form of ownership, all property owned by a married couple is classified either as the separate property of one spouse or as the community property of husband and wife. (This only applies to Community Property states: AZ CA ID LA NV NM TX WA WI)

Tenancy by the Entirety: for states that do not have a community property system, married couples may hold title to property as Tenants by the Entirety. This form of ownership can only be created by a married couple, a tenant cannot convey their interest to someone else without the consent of the other tenant (spouse), and includes right of survivorship. (Recognized in many states; GA does not recognize this form of ownership)

 

Do you have any questions or comments? Please let me know!


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