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
Real property is immovable land and anything permanently attached to it, while personal property (also called chattels) is movable.
Joint tenancy is a form of co-ownership in which two or more persons hold equal, undivided interests in property with the right of survivorship. When one joint tenant dies, their interest automatically passes to the surviving joint tenants.
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
Community property is a form of ownership recognized in certain states where property acquired during marriage is considered equally owned by both spouses, regardless of who earned the money or whose name is on the title.
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: