Introduction to the Estate System


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Terms:


Estate:
An ownership interest in real property.

Freehold Estate:
An interest in land held in fee simple, fee tail or in a life estate.


Unlike Contract and Criminal Law, the law of Real Property has, to a large extent, remained constant over a very long period of time. In no area is this more evident than in the Estate System. The Estate System deals with the levels and types of ownership that are possible with regard to real property. It is based on the real property ownership system that existed during feudal times, and it has not developed much in spite of the obsolescence of some of its aspects.

Ownership of property can be divided in terms of

  1. space,
  2. occupancy or
  3. time.

If property is divided in terms of space, such as where two people each own half of the land, it is not really owned by both parties at all. One half of the property is owned by each. For example:


Property divided in terms of occupancy occurs when two people have the right to occupy a single parcel of property. In such a case, both parties own the property, but the property is not really divided among them, because both parties have the right to possess all of it. For example:


Ownership of real property can also be divided in terms of time. That is, a person can have the right to own the parcel for a certain period of time. After this time is over, the right to possess the property will shift to another person. For example:


In this example, Jim has the right to possess the property for the next fifty years, but then the right to the property will shift to Joan, who will then retain it in perpetuity (forever) unless she gives that right to a different person. As we will discuss later, Jim has a “term of years” in the property (he has a right to possess it for a certain number of years), while Joan has a “remainder” interest in the property.

It is this last category that the estate system deals with. That is, the estate system deals with property that is divided in time between different owners. [The second type of division discussed above, that of the right to occupancy, is the subject of a later chapter in this course, Concurrent Ownership.]

The Estates

The “estates,” or levels of ownership in real property, are divided into two categories: the “freehold” estates and the “non-freehold” estates. The freehold estates are considered a higher level of ownership than the non-freehold estates. However, in terms of practical law, there is very little difference between them. The 6 basic types of estates are:

Freehold estates:

  1. The Fee Simple
  2. The Fee Tail
  3. The Life Estate

Non-Freehold estates:

  1. The term of years
  2. The periodic tenancy
  3. The tenancy-at-will

The freehold estates are the subject of this chapter, while the non-freehold estates will be discussed briefly in this chapter, but are primarily the subject of a later chapter in this course, the chapter of “Landlord-Tenant” law.



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