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.
Types of Estates: Freehold vs. Leasehold is tested in the Property Ownership section of the real estate exam. Questions typically present a scenario and ask you to apply the concept. Here are examples of how exam questions are phrased:
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?”
Practice with all 10 related questions below to build confidence in this topic area.
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
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.
A freehold estate represents ownership of real property with an indefinite duration.
A leasehold estate grants the right to possess and use property for a defined period of time, without conferring ownership.
A life estate is a freehold estate that grants ownership rights for the duration of someone's life.
Riparian rights concern properties bordering flowing bodies of water (rivers, streams), while littoral rights concern properties bordering non-flowing bodies of water (lakes, oceans).
Frequently Asked Questions
Study This in Your State
Types of Estates: Freehold vs. Leasehold may have state-specific rules. Choose your state to study Property Ownership with localized content: