Real Estate Fundamentals - Chapter 6: Real Property Interests

In real estate the term "estate" refers to a large ranch or mansion or the accumulation of wealth or assets.

In real estate, there are essentially 2 kinds of estates: freehold and leasehold.

A freehold estate refers to the interest that a tenant has in real property.

A leasehold estate refers to an ownership interest in real property for an undetermined amount of time.

The most important type of freehold estate is called fee simple. It is the highest and most complete form of ownership in real estate that is possible.

Although fee simple is the most preferred ownership interest for the majority of people, it does NOT contain all of the allowable bundle of rights of ownership and does NOT represent absolute, unconditional ownership forever.

A variation of a fee simple is a fee simple absolute, a type of fee simple in which there are no limitations upon the ownership rights other than the government powers.

The second type of freehold estate is called a defeasible fee estate. It can be distinguished from fee simple in that it is a conditional form of real property ownership. Because the word defeasible means capable of being defeated, this type of ownership can be terminated because it is based upon a condition.

The official name of the owner of a life estate is dower.

An estate pur autre vie is an ownership interest in real property for the life or lives of someone other than the owner of the life estate.