What are the characteristics of each kind of estate

Nonfreehold estates are a type of real property that you have a limited right to use or occupy but don’t own. In effect, you lease the property without holding any ownership over it. For example, a nonfreehold estate may include a condo you rent. In contrast, with a freehold estate condo, the unit is owned by the tenant outright.

These types of property are generally called nonfreehold estates; however, two other names for them are leasehold estates or less than freehold estates. Additionally, since nonfreehold estates involve tenants, they are sometimes referred to as tenancies.

Tenancy For Years

Tenancy for years is a type of estate created by a lease. When the tenant enters this type of lease agreement, they have it for a fixed amount of time. The contract outlines the beginning and end date for the tenancy. Because of this, neither the tenant nor the landlord has to notify each other about termination of the lease. The documentation already specifies the dates. At the end of the term, the tenant either moves out from the property or renews it.

You may also hear a tenancy for years referred to as an estate for years or tenancy for a definite term.

Tenancy From Period To Period

Tenancy from period to period, or periodic tenancies, are leases that do not have a defined end date. The agreement may still identify a length of time for the occupancy. However, the landlord and tenant can extend the tenant’s stay, renewing indefinitely.

Both parties can also agree that notice is necessary before the lease’s termination. Although, the contract should note that, along with the time needed for the notice.

Tenancy At Will

You may hear of a tenancy at will referred to alternatively as an estate at will. Under this type of agreement, either the owner or the tenant can terminate it at any time.

The two parties do not use a binding contract or lease. The agreement also doesn’t typically specify the occupancy’s time length or the way the tenant pays. Instead of a contract, local and state laws govern the tenure. People often seek this out when they want to flexibly move rentals without breaking any contracts.

Tenancy At Sufferance

A tenancy at sufferance works somewhat similarly to a tenancy at will. Like the latter, it does not occur under a contract or lease. Instead, it is a type of tenancy that takes place after the tenant’s lease expires but before they leave the property.

So, it occurs without a lease, under the landlord’s permission. However, the tenant still has to adhere to the contract’s original conditions, such as rent payments. If the tenant does not comply, the landlord can evict the tenant without any notice.

Tenancy at sufferance is also called estate at sufferance and is the lowest form of estate known to law.

An estate includes a present or future right to ownership and/or possession of real property. The amount and type of interest that an individual has in real property is called an "estate in land." While an estate in land grants the right to possess the property, an interest, such as an easement, bestows only a right to use the land.

Estates in land are divided into two main classifications: freehold estates and nonfreehold estates. Freehold estates are those involving ownership, while nonfreehold estates are those involving tenants.

Freehold estates are estates of indefinite duration that can exist for a lifetime or forever.

Some types of freehold estates are classified as "estates of inheritance," where the estate continues beyond the life of the holder and descends to their living heirs upon death as specified by the will or by law. Examples include the fee simple estate or the defeasible fee estate, which continue for an indefinite period and are inheritable by the owner's beneficiaries.

Other freehold estates are referred to as "estates not of inheritance" or "life estates," which exist only for the term of a person's life. The ordinary conventional life estate with remainder or reversion, for example, does not continue for an indefinite period but terminates when the person on whose life the estate is based, or the life tenant, becomes deceased.

Nonfreehold Estates

A nonfreehold estate is an interest in real property that is less than a freehold estate. Nonfreehold estates are not inheritable and are said to exist "without seisin." Seisin denotes ownership: An individual who is "seised" of an estate is the owner of the estate.

Also known as a leasehold estate, a nonfreehold estate is created through a lease or rental agreement that can be either written or oral.

The holder of a nonfreehold estate (the tenant or lessee) holds no ownership interest in the real property and only has the right to use the property as established in the terms of the lease or rental agreement. Ownership remains with the landlord (lessor).

Types of Nonfreehold Estates

Because nonfreehold estates involve tenants, they are often referred to as "tenancies." There are four types of tenancies:

Tenancy for Years

Also called an estate for years or tenancy for a definite term, this is an estate that is created by a lease. A lease is a contractual agreement where a tenant takes a leasehold interest in a real property for a specified duration. The defining characteristic of a tenancy for years is that the term must have a definite beginning and end; that is, a beginning date and either a specific time period (such as one year or one month) and an end date must be declared. As long as a lease is for a definite term, it is identified as a tenancy for years. These leases terminate automatically at the specified end date without the need for notice by either party.

Tenancy From Period to Period

A tenancy from period to period is an estate that exists when the tenancy is for a definite initial time but is automatically renewable unless terminated by the lessor or lessee with prior notice that the tenancy is to be ended. These estates, which are also called "periodic tenancies", are of indefinite duration since they can be renewed indefinitely. A tenancy from period to period may be from year to year, month to month, week to week, or even day to day, and renews for a like period of time. For example, a month-to-month periodic tenancy is renewable in one-month periods until it is terminated at the end of a month through proper notice by either party.

Tenancy at Will

A tenancy at will, or an estate at will, exists at the pleasure of both the lessor and the lessee. This type of tenancy can be terminated at any time "at the will" of either the owner or the tenant. A tenancy at will lease agreement might contain language that expresses that the lease may be terminated instantly when notice is given. In practice, a tenant is generally entitled to a reasonable amount of time in which to vacate the property. Landlords may prefer a tenancy at will when a property is for sale and any tenants would have to vacate quickly. Tenants may favor a tenancy at will if they plan on renting only for a short period of time; for example, prior to moving or while waiting to move into a new home.

Tenancy at Sufferance

A tenancy at sufferance is the lowest form of estate known to law. Also called an estate at sufferance, it exists indirectly as the result of circumstance, and is never deliberately created. This type of tenancy arises when a person goes into possession of land in a lawful manner but remains on the property without any right to do so, and without the owner's consent. The only difference between a tenant at sufferance and a trespasser is that the tenant at sufferance had at one time a right to be on the property but has stayed beyond the terms of the previous agreement. For example, a tenant who remains after a one-year lease has terminated, without consent or recognition from the owner, becomes a tenant at sufferance. The tenant can be evicted at any time without notice.

The Bottom Line

Estates in land can be broadly classified as either freehold or nonfreehold. A freehold estate indicates ownership, while a nonfreehold estate, sometimes referred to as the law of landlord and tenant, involves a lessor and lessee arrangement. It is possible that various types of nonfreehold estates can apply to the same rental over a period of time.

For example, a tenant could start out with a one-year lease (tenancy for years). And once that period is over, the tenancy could switch to a month-to-month basis (tenancy from period to period). The type of estate that a person has in real property establishes the duration and the scope of their rights to ownership and/or possession of the property.

What are the characteristics of an estate?

What are the 3 main characteristic of property?

What are physical characteristics of real estate?

What are the characteristics of the property market?