Property Ownership

Fee Simple Absolute

Details: Owner has full bundle of rights; can sell, lease, will, or encumber the property

Example: "To John and his heirs" — John owns the property outright with no conditions

Tip: Fee simple absolute is the default estate and the most common on the exam

Fee Simple Defeasible

Details: Determinable: automatic reversion ("so long as," "while," "during"). Condition subsequent: grantor must take action to reclaim ("but if," "on condition that")

Example: "To the school district so long as it is used for educational purposes" — if not, ownership reverts automatically

Tip: Look for trigger words: "so long as" = determinable (automatic). "But if" = condition subsequent (requires action)

Life Estate

Details: Life tenant has full use but cannot commit waste. Remainderman or reversioner gets property at death

Example: "To Mary for life, then to Tom" — Mary is life tenant, Tom is remainderman

Tip: Life tenant must pay taxes, insurance, and maintenance — cannot damage (waste) the property

Leasehold Estates

Details: Estate for years (fixed term), periodic tenancy (auto-renewing), estate at will (either party can terminate), estate at sufferance (holdover tenant)

Tip: Estate for years has a definite end date and does NOT require notice to terminate

Joint Tenancy (TTIP)

Details: TTIP: same Time of acquisition, same Title (deed), equal Interest shares, equal Possession rights

Example: A and B own as joint tenants; when A dies, B automatically owns 100% (no probate)

Tip: Right of survivorship bypasses the will — property goes directly to surviving joint tenant(s)

Tenancy in Common

Details: Only requires unity of possession; interests can be unequal (e.g., 60/40 split)

Example: A owns 60% and B owns 40%; when A dies, A's 60% goes to A's heirs (not B)

Tip: Default form of co-ownership in most states if no other form is specified

Tenancy by the Entirety

Details: Has right of survivorship; neither spouse can sell or encumber without the other's consent

Example: Married couple owns home as tenancy by the entirety; creditor of one spouse cannot force a sale

Tip: Not recognized in all states — protects property from individual creditors of one spouse

Community Property

Details: Separate property: owned before marriage, gifts, or inheritance. Community: acquired during marriage with marital funds

Tip: Recognized in 9 states (AZ, CA, ID, LA, NV, NM, TX, WA, WI). Both spouses must agree to sell

Bundle of Rights (PACED)

Details: These five rights collectively define real property ownership

Tip: Remember PACED: Possession, control (Also called "use"), exclusion, enjoyment, disposition

Possession

Details: Can be transferred via lease; owner retains ownership but gives up possession

Control (Use)

Details: Limited by zoning laws, deed restrictions, and other regulations

Example: Owner can remodel, landscape, or operate a home business (subject to zoning)

Exclusion

Details: Exceptions: law enforcement with warrant, utility easements, eminent domain

Disposition

Details: Can be limited by liens, deed restrictions, or co-ownership agreements

Easement Appurtenant

Details: Dominant estate = benefits. Servient estate = burdened. Transfers automatically with the property

Example: Landlocked parcel A has a driveway easement across parcel B. A = dominant, B = servient

Tip: Easement appurtenant requires two parcels and "runs with the land" (transfers to new owners)

Easement in Gross

Details: Personal (non-transferable) or commercial (transferable, e.g., utility easements)

Example: Power company has an easement in gross to run lines across your property

Liens

Details: Voluntary (mortgage) vs involuntary (tax lien, mechanic's lien, judgment lien). Specific (one property) vs general (all property)

Tip: Property tax liens have HIGHEST priority — they come before all mortgages regardless of recording date

Deed Restrictions (CC&Rs)

Details: Run with the land; enforceable by other property owners in the subdivision

Example: CC&Rs prohibit fences over 6 feet, require architectural approval for exterior changes

Tip: When zoning and deed restrictions conflict, the MORE restrictive rule applies

Metes and Bounds

Details: Uses distances (metes) and directions (bounds/bearings); always returns to the starting point

Example: "Beginning at the oak tree, N 45° E for 200 ft, then S 45° E for 100 ft..." back to POB

Tip: Oldest method — used in the original 13 colonies and states with irregular boundaries

Rectangular (Government) Survey

Details: Township = 36 square miles (6mi × 6mi) = 36 sections. Section = 1 square mile = 640 acres

Example: The NW 1/4 of the SE 1/4 of Section 10 = 40 acres (640 ÷ 4 ÷ 4)

Tip: To calculate acres: start with 640, divide by each fraction. 640 ÷ 4 ÷ 4 = 40 acres

Lot and Block (Plat Map)

Details: Most common for residential subdivisions; plat map is filed at county recorder's office

Example: "Lot 5, Block 3, Sunset Heights Subdivision, as recorded in Book 12, Page 45"

Tip: Simplest and most common method for subdivided residential properties

General Warranty Deed

Details: Five covenants: seisin, right to convey, against encumbrances, quiet enjoyment, warranty forever

Tip: Best deed for buyers. Grantor guarantees title even against defects from PRIOR owners

Special Warranty Deed

Details: Does NOT protect against defects from prior owners — only from grantor's own actions

Example: Common in commercial transactions and bank sales (REO/foreclosure)

Quitclaim Deed

Details: Used to clear clouds on title, transfer between family members, or add/remove spouse from title

Tip: Least protection for grantee but most effective at removing clouds on title

Adverse Possession

Details: Must be: Open & notorious, Hostile, Actual, Continuous, Exclusive (OHACE) for the statutory period (varies by state)

Example: Neighbor builds fence 2 feet onto your land and maintains it openly for 20 years

Tip: All five elements must be met for the entire statutory period — missing one defeats the claim

Riparian Rights

Details: Owner can use reasonable amount for domestic purposes; cannot divert or diminish flow to downstream owners

Tip: Riparian = Rivers (both start with R). Rights attach to the land, not the person

Littoral Rights

Details: Owner has rights to the water's edge (mean high water mark for oceans)

Tip: Littoral = Lakes (both start with L). Owner does NOT own the water itself

Prior Appropriation

Details: Common in western states with scarce water. Rights can be lost through non-use (abandonment)

Example: Farmer A diverted water in 1950, Farmer B in 1970 — A has senior rights even in drought

Tip: Used in arid western states (CO, NV, AZ). Unlike riparian, does NOT require property adjacent to water

Police Power

Details: Includes zoning, building codes, environmental regulations, rent control

Example: City passes zoning ordinance restricting an area to residential use only

Tip: Police power is the broadest government power — NO compensation is required

Eminent Domain

Details: Must be for public use/benefit and owner must receive fair market value

Example: State takes a strip of private land to widen a highway — owner receives market value

Tip: The legal process of taking property is called "condemnation"; the power is "eminent domain"

Taxation

Details: Based on assessed value; creates a lien on property. Non-payment can lead to tax sale

Tip: Tax liens take PRIORITY over all other liens, including first mortgages

Escheat

Details: Prevents property from being ownerless; state becomes owner of last resort

Example: Owner dies with no will and no living relatives — property escheats to the state

Tip: Remember PETE: Police power, Eminent domain, Taxation, Escheat