Freehold estates: fee simple, defeasible fees, life estates, and the bundle of rights

Classify the duration first

A freehold estate is ownership without a definite lease term. Ask: How long can it last, what ends it, and who takes possession next?

Fee simple absolute is the broadest estate: potentially perpetual, transferable during life, and capable of passing at death. Taxes, zoning, easements, and valid restrictions can still apply. They do not by themselves make the estate defeasible.

Defeasible fees

A fee simple defeasible can continue indefinitely but may end upon a specified event.

• Fee simple determinable: ends automatically upon the stated limitation. Land conveyed to a town so long as it is used as a park, with automatic return if that use stops, illustrates this form. The grantor retains a possibility of reverter.
• Fee simple subject to a condition subsequent: breach gives the grantor a right of entry, or power of termination. The grantor must exercise it; termination is not automatic.
• Fee simple subject to an executory limitation: the specified event shifts ownership to a named third party.

Actual deed interpretation depends on the whole instrument and applicable law; a use restriction alone does not establish forfeiture.

Life estates and future interests

A life estate ends at the death of the measuring person. If Elena holds an estate for her own life and conveys it to Marco, Marco's interest still ends when Elena dies. An estate measured by another person's life is pur autre vie.

The life tenant has present possession and may use the property and collect rent, but must avoid waste that injures future interests. A transfer of the life estate cannot enlarge its duration. When it ends, possession returns to the grantor under a reversion, or passes to a designated third party under a remainder. These future interests exist before their holders become entitled to possession.

The bundle of rights

• Possession: occupy or hold property.
• Control: determine lawful uses.
• Enjoyment: receive benefits, including rent.
• Exclusion: keep others out, subject to their lawful rights.
• Disposition: sell, give, or otherwise transfer an interest.

The rights can be divided. A lease transfers possession for its term while the owner retains a future right to possession. Identify both the duration of the estate and the right being exercised.