Types of Estates: Freehold vs. Leasehold
A freehold estate conveys ownership rights, while a leasehold estate grants the right to possess and use property for a specific period without ownership.
Freehold estates represent ownership interests in real property and can be for an indefinite duration. The most common type of freehold estate is fee simple absolute, which is the highest form of ownership. Other types include life estates, where ownership is limited to the duration of someone's life. Leasehold estates, on the other hand, represent a temporary right to possess and use property under a lease agreement. They do not convey ownership and are for a defined period.
Owning a house with the right to sell it, will it, or give it away is a fee simple absolute estate. Renting an apartment for a year is a leasehold estate.
Focus on the duration of the estate. Freehold estates are indefinite, while leasehold estates have a specific term. Remember that a 'life estate' is still a freehold estate, even though its duration is tied to a life.
Related Terms
Practice Questions
In Michigan, when one joint tenant dies, their interest:
A hospital receives a gift of real property from an elderly couple who reserve to them- selves a life estate. The hospital is the
The holder of which of the following would be a “nonfreeholder?”
Which of the following can the grantor of a life estate NOT do?
The highest form of property ownership in the United States is:
A life estate may be granted
A Texas property owner grants an oil company the right to drill on their land. This is called:
In Texas, mineral rights:
A life estate in Texas can be measured by:
In New York, a cooperative apartment owner holds:
Related Concepts
A freehold estate represents ownership of real property with an indefinite duration.
A life estate is a freehold estate that grants ownership rights for the duration of someone's life.
A leasehold estate grants the right to possess and use property for a defined period of time, without conferring ownership.
The bundle of rights describes the rights associated with property ownership, allowing owners to use, control, enjoy, exclude others from, and dispose of the property.
Real property is immovable land and anything permanently attached to it, while personal property (also called chattels) is movable.