Real property law

Key vocabulary: real property, personal property, tenements, hereditaments, freehold estates, leaseholds, the fee simple, the fee tail, the life estate, the estate pur autre vie, reversion, escheat, grantee/grantor, life tenant, remainderman, licence, easements, usufructs, mortgages, landlord/tenant, decedent /heir, assignor/assignee, lessor/lessee.

English-speaking jurisdictions generally distinguish between real property and personal property. Real property is a general term for land, tenements and hereditaments. On the other hand, personal property refers to everything, which does not fall under the heading of real property. This brief summary addresses key terms in relation to real property.

Real property can be divided into freehold estates and leaseholds. Freehold estates are those whose duration is not determined. By contrast, the duration of a leasehold is fixed or capable of being fixed. Essentially, there are four types of freehold estate: the fee simple, the fee tail, the life estate and the estate pur autre vie.

As its name suggests, a fee simple refers to a whole interest in a piece of real property and may pass through sale, inheritance or reversion, i.e. when the owner dies and there are no persons alive who have the right of inheritance, the property reverts to the State. Reversion is also referred to as an escheat. A fee tail is an inheritable estate, which lasts as long as the original grantee or any of his descendants live. A life estate is an estate granted only for the life of the grantee. When the life tenant dies, the remaindermen take possession, or the reverts (see above). An estate pur autre vie is similar to a life estate, except that the estate is granted for the life of someone other than the grantee.

A leasehold is generally created through what is referred to as a lease, which is a contract for exclusive possession, generally for a term of years, usually for a specified rent or compensation. A leasehold should not be confused with a licence. The crucial test for determining whether a lease or a licence has been created is whether there is exclusive possession. If there is no exclusive possession, there is no leasehold. A good example of this is where the property remains in the control of the grantor, such as in the case of a hotel room or dormitory.

Generally speaking, the Statute of Frauds requires that agreements regarding the sale of or interests in land must be in writing to be enforceable. In respect of leases, the Statute of Frauds for a particular jurisdiction will specify that leases for more than a certain number of years must be in writing to be enforceable, e.g. three years in England. For land sales, the Statute of Frauds requires a formal writing.

There are numerous other areas of real property law, which commercial lawyers deal with on a day-to-day basis. Real property law includes such things as easements, usufructs, mortgages and other financing measures.

Post-reading task. Decide whether these statements are true or false.

1. The term of years of a freehold estate is not fixed.

2. The term reversion refers to the passing of real property to the State when the owner of the property has died and has no legal heirs.

3. The term fee tail refers to an inheritable estate, which lasts as long as the original grantor or any of his descendants live.

4. A licence grants exclusive possession of a property.

5. The Statute of Frauds permits oral contracts in the case of leases if the duration is more than a certain number of stipulated years.

Ex. 1. Match each pair (1-28) with its explanation (a-bb).

decedent /heir	a person who has died / a person who is entitled to inherit property
grantor/grantee	a person who transfers property / a person to whom property is transferred (in real property law synonymous with assignor/assignee)
landlord/tenant	person (usually the owner) who gives another person a lease in turn for rent / a person to whom a lease is given in return for rent in real property law synonymous with lessor/lessee)
freehold estates	a right of title to land that is characterized by two essential elements: immobility(land or an interest) and indeterminate duration.
leaseholds	the real estate which is the subject of a lease (a written rental agreement for an extended period of time).
the fee simple	absolute title to land, free of any other claims against the title, which one can sell or pass to another by will or inheritance.
the fee tail	an estate in land subject to a restriction regarding inheritance; is passed by inheritance to the heirs of the body of the initial owner.
the life estate	the right to use or occupy real property for one's life.
reversion	any future interest kept by a person who transfers property to another, but retains some future right to it.
the estate pur autre vie	when a lease of lands or tenements is made to a man for the life of another person.
escheat	the power of a state to acquire title to property for which there is no owner.
licence	the permission granted by competent authority to exercise a certain privilege that, without such authorization, would constitute an illegal act.
easements	a liberty privilege or advantage, which one man may have in the lands of another, without profit; it may arise by deed or prescription.
remainder/ remainderman	a future interest held by one person in the real property of another that will take effect upon the death of a life tenant.
usufructs	the right of one individual to use and enjoy the property of another.
mortgages	a legal document by which the owner (i.e., the buyer) transfers to the lender an interest in real estate to secure the repayment of a debt, evidenced by a note.
tenements	any type of property of a permanent nature (land, houses, and other buildings, rights attaching thereto, such as the right to collect rent).
hereditaments	anything capable of being inherited.
deed	a written instrument, signed and delivered, by which one individual, the grantor, conveys title to real property to another individual.
interest	any right, claim, or privilege that an individual has toward Real or Personal Property.
title	the legal basis of the ownership of property; also a document serving as evidence of ownership of property.
to convey	to transfer title (official ownership) to real property (or an interest in real property) from one (grantor) to another (grantee) by a written deed.
corporeal	possessing a physical nature; having an objective, tangible existence; being capable of perception by touch and sight.
incorporeal	lacking a physical or material nature but relating to or affecting a body.
Covenant	an agreement, contract, or written promise between two individuals that frequently constitutes a pledge to do or refrain from doing something.
pledge	a Bailment or delivery of Personal Property to a creditor as security for a debt or for the performance of an act.
bailment	the temporary placement of control over, or possession of Personal Property by one person, the bailor, into the hands of another, the bailee, for a designated purpose upon which the parties have agreed.
adverse possession	The use or enjoyment of real property with a claim of right.

Ex. 2. Fill in the gaps with the words or phrases from ex. 1, make the necessary changes.

1. The voluntary transfer of a right or of property or the transfer of an interest in real property from one living person to another, by means of an instrument such as a deed is called a …………….

2. An interest in land that, being the broadest property interest allowed by law, endures, until the current holder dies without heirs is called …………………….. ……………………….

3. The ………………… is the party who leases the property, also called tenant in a real property lease, while the …………… is the party who gives the lease, also called landlord when the lease involves real property.

4. A joint ………….. is taking identical interests simultaneously by the same instrument and with the same rights of possession by two or more co-owners.

5. The use or enjoyment of real property with a claim of right when that use or enjoyment is continuous, exclusive, hostile, open and notorious is called an ………….. ………………….

6. Despite bargaining for months with its creditors, General Growth faced increasing pressure to handle its more than $25 billion in debt, largely in the form of short-term ……….. that will come due by next year.

7. When the individual (“grantee” or “life tenant”) retains possession of the land for the duration of his or her life, it is called a ……………… ……………...

8. An apartment-dweller with a one year lease has a …………. estate in his apartment and must pay rent.

9. When a tenant grants an estate of lesser maximum duration than his own, the ownership of the land returns to the original tenant when the grantee's estate expires. This is called a …………..

10. A …………… arises when a tenant with a fee simple grants someone a life estate, and specifies a third party to whom the land goes when the life estate ends. The third party is said to have a remainder. The third party may have some legal rights to limit the life tenant's use of the land.

11. Some states require that the ………. while selling the property be officially recorded to establish ownership of the property and/or provide notice of its transfer to subsequent purchasers.

12. Another common requirement in real estate contracts is that the ………… to the property sold be marketable, i.e. the seller must have proof that he or she is the real owner of all the property he or she is selling.

13. A …………… is a person who owns a house, a flat or an office and receives rent from someone for allowing them to live there, or use the building for business purposes.

14. The ………….. means that the landowner owns the land throughout his life unless he sells or gives it to someone else.

15. People entitled to the property of someone after he dies are called …………..

16. The ……………is a type of contractual arrangement that, if validly reached, is enforceable by a court. It can be phrased so as to prohibit certain actions and in such cases is sometimes called negative one.

17. Your neighbour’s right to use a footpath over your land, or your right not to have buildings or trees on your land block light to his windows is called an …………………...

18. The grantor of a ………….. ……………. is permitted to limit the inheritance to a specific group of lineal descendants of the grantee: to a man and his male bodily heirs, for example.

19. ……………….. is any kind of property which can be inherited.

20. ……………….. comprehends everything which may be held, provided it be of a permanent nature; and not only lands and inheritances which are held, but all the houses and buildings.

21. An ……………. takes place due to the lack of any person with a valid interest in the property, and is not usually linked to any illegality or wrongdoing.

22. The right of enjoying a thing, the property of which is vested in another, and to draw from the same all the profit, utility and advantage which it may produce, provided it be without altering the substance of the thing is a ……………..

23. When a lease is made to a man, to hold for the life of another person, it is called an estate ………..

Ex. 3. Choose the correct definition and make sentences of your own with the legal terms: 1. Conveyance

a) A statement made against your employer's interest.

b) The voluntary transfer of a right or of property.

c) The expiration of an option period.