LAW 603 Lecture Notes - Lecture 7: Beneficiary (Trust), Concurrent Estate, Lease
28 May 2018
School
Department
Course
Professor
Lecture 7 - Real Property: Interests and Leases
Monday, March 12, 2018
12:19 PM
Overview
• This class focuses on legal interests in real property, i.e., land and attachments to land (fixtures).
o From reasonable depth to reasonable height
• Two essential aspects are considered:
o Types of legal interests in real property
o Leases
Topics
• Interests in Land
o Fee Simple
o Life Estate
o Leasehold Estate
• Forms of Ownership
o Single Ownership
o Joint Ownership
• Non-possessory Interests
• Leases
Interests in Land
• Refers to the rights that a person can enforce in regard to a particular piece of land.
• The highest o ost sigifiat iteests i lad ae efeed to as estates i lad.
o Fee Simple
o Life Estate
o Leasehold Estate
Fee Simple
• Fee simple is the highest level or form of real property entitlement or bundle of interests.
• It is what we typically consider to be complete ownership.
o E.g., the purchase of a home, including the associated property, without a mortgage or any
other charge or lien
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• Parties with an interest in land in fee simple can possess it indefinitely, sell it, lease it or give it
away at any time, for any consideration, or they can transfer it as part of their estate on death.
• Within certain limitations, they can deal with the land as they wish.
• Limitations
o A party cannot use the land in a manner that creates a nuisance or special and unusual
danger, or otherwise breaches the rights of neighbours.
o Government Regulation
▪ Land use restrictions;
▪ Environmental restrictions and requirements.
o Expropriation
▪ Governments have the inherent right to expropriate land for public purposes.
Life Estate
• Life estate is the right of exclusive possession of eal popet fo the duatio of a peso’s life.
o It is a lesser form of entitlement to real property than fee simple (it contains fewer rights);
o It is usually in effect during the life of the holder of the life estate;
o It automatically terminates with death, and possession automatically reverts to the person
who holds the property in fee simple.
• The holder of a life estate interest is liable for any waste to the property, i.e., any acts that
significantly impair the value of the property.
• Granting of a life estate interest frequently is useful for family estate purposes.
o E.g., a father in his will passes on ownership (i.e., fee simple) in the family home to his
daughter, with a life interest for the possession and use of the home granted to his widow.
• Life estate interests in real property are of minimal practical benefit for dealing with property for
commercial purposes.
Leasehold Estate
• Leasehold estate is the right of exclusive possession of real property for a prescribed period of
time.
• The period must be established at the beginning.
Forms of Ownership
• Individual Ownership
o The owner is a single person (it iludes a legal peso suh as a opoatio;
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o The person exclusively owns the prescribed real property;
o The person can deal with the real property as he or she sees fit.
• Shared Ownership
o Two or more parties own a single piece of real property;
o Each of them has an undivided interest in the entire property.
• Types of Shared Ownership
o Joint tenancy (joint ownership)
o Tenancy-in-common (co-ownership)
• Joint tenancy
o The interests of the parties are identical;
o The interest of each party automatically transfers to other party on death (right of
survivorship);
o Each party cannot independently transfer its interest to someone else. (E.g., in most cases,
spouses and partners purchase homes as joint tenants.)
• Tenancy-in-common
o The parties need not have identical interests in the real property;
o Each party can dispose of its interest in the real property as it wishes (no right of
survivorship).
What do you Think?
• Class 7 Fact Scenario
o The alternatives are joint tenants or tenants-in-common.
o Joint Tenants
▪ The building would automatically pass from one party to the other on the death of
one of them;
▪ This approach could lead to problems if their relationship (business and personal)
ends.
o Tenants-in-common
▪ This allows each party to transfer his or her one-half interest to others, which may be
an attractive option if either or both desire to pass on their interest to their own
children;
▪ This approach could also lead to problems if their relationship (business and personal)
ends.
• Business Decision 15.1, p. 369
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Lecture 7 - real property: interests and leases. Overview: this class focuses on legal interests in real property, i. e. , land and attachments to land (fixtures), from reasonable depth to reasonable height, two essential aspects are considered, types of legal interests in real property, leases. Interests in land: fee simple, life estate, leasehold estate. Fee simple is the highest level or form of real property entitlement or bundle of interests. Limitations: a party cannot use the land in a manner that creates a nuisance or special and unusual danger, or otherwise breaches the rights of neighbours, government regulation. Land use restrictions: environmental restrictions and requirements, expropriation, governments have the inherent right to expropriate land for public purposes. Life estate is the right of exclusive possession of (cid:396)eal p(cid:396)ope(cid:396)t(cid:455) fo(cid:396) the du(cid:396)atio(cid:374) of a pe(cid:396)so(cid:374)"s life. It is a lesser form of entitlement to real property than fee simple (it contains fewer rights);
