Introduction

An estate is a present or future claim to actual property ownership and possession. Estates can be divided into several different types. An individual's level of involvement in a piece of real estate and the nature of that involvement is referred to as their "estate in land." Two primary categories are utilized to categorize estates in land: Freehold vs. Nonfreehold Estates. Estates held in freehold by the owner are referred to as such, while estates held in non-freehold by tenants are called such.

Freehold Estates

Freehold estates are estates with indefinite duration, meaning they can exist for a single lifetime or continue indefinitely. Some freehold estates are referred to as "estates of inheritance," which means that the estate remains in existence after the holder's lifetime and passes on to the holder's living heirs when they pass away, either by the terms of their will or the requirements of the law. Examples of this type of estate include the fee simple estate and the defeasible fee estate, both of which last for an indefinite amount of time and can be inherited by the beneficiaries of the owner.

In contrast to a scenario in which one person owns a freehold estate, and another person owns a future interest in the land, this one involves none of those things (such as a remainder or possibility of reverter). In this scenario, the person who owns the freehold estate on the property is the one who is regarded as the legitimate owner of the home. On the other hand, a holder of a non-freehold estate is deemed to be, at best, a co-owner with the person with the future interest in the property. The person who owns the estate that does not have freehold status is typically referred to as the tenant, whereas the person who owns the future interest is typically referred to as the landlord.

However, this does not necessarily imply that holders of a freehold estate will have the property for longer than holders of a non-freeholder estate. On the other hand, a freehold estate can be terminated within minutes of its creation (for example, if the receiver of a life estate passes away immediately upon the transfer). Still, a non-freehold estate can continue for any duration of time that falls short of eternity.

Different Types Of Freehold Estates

There are three different types of freehold estates: a life estate, a fee simple estate, and a fee tail estate.

• Fee Simple Absolute A fee simple absolute is the most extensive interest in real property that an individual can possess because it is entirely limited to the individual and the individual's heirs and is forever. It is not subject to any limitations or conditions. In other words, a fee simple absolute is the most extensive interest in real property that an individual can possess.
• The Fee Is Straightforwardly Determinable One definition of a fee simple determinable remains in place up until the occurrence of a particular event. This fee is also referred to as an introductory or qualifying fee. When such a situation arises, the estate will be terminated automatically by the operation of the law. At that point, the grantor or the heirs will be entitled to claim possession of the property again.
• Free and Clear, Pending the Satisfaction of a Condition Subsequent: The difference between it and a fee simple determinable is that the latter loses its validity due to the law's natural progression upon the indicated event. A fee spartan contingent on fulfilling the following condition remains in effect even after the event that triggered the condition. It does so until the grantor sells the estate or exercises its authority to terminate it.

Nonfreehold Estates

The preposition seisin is employed to imply ownership; the person who is "seised" of an estate is considered to be the estate owner. A non-freehold estate is established by a rental or lease arrangement, which may be written or verbal. This type of estate is also known as a leasehold estate.

The tenant or lessee of a property held under a non-freehold estate does not have any ownership interest in the underlying real property; instead, they only have the right to use the property by the lease provisions or rental agreement. The landlord retains ownership of the property (lessor).

Common Examples

Both freehold and non-freehold estates are relatively widespread in the United States, even though their respective titles are not considered everyday expressions. One way to think of a freehold estate is as a piece of real estate for which an individual possesses both the title and the deed, while another way to think of a non-freehold estate is as a piece of real estate for which someone pays rent to use it.

Conclusion

Since their introduction in Anglo-Saxon England, the terms "freehold" and "non-freehold" have been used in legal documentation about real estate transactions; nevertheless, the distinctions between the two are rarely clarified. When you buy a piece of real estate, you gain ownership of a freehold estate. You are the owner. You need to pay taxes on it. Your name is on a deed, and you can leave the property to whoever you choose to inherit it. A renter, sometimes known as a leaseholder, is someone who does not own the property but has the right to use it for a predetermined amount of time. This tenant is residing in a property that is not freehold.