Concepts Definitions

• Leasehold Estate (Non-Freehold Estate): An interest in real property that grants a tenant the right to use and possess a property for a defined or indefinite period, but without ownership title. Despite being an interest in real property, it is classified as personal property (also called “chattel real”).

    ◦ Estate for Years (Term Tenancy): A type of leasehold estate that has a specific beginning and ending date. It terminates automatically on the specified end date without the need for notice from either party. Its duration can be shorter or longer than one year.

    ◦ Periodic Tenancy (Estate from Period to Period): A lease agreement that continues for successive periods (e.g., month-to-month, year-to-year) until one party gives notice to terminate.

    ◦ Tenancy at Will (Estate at Will): An occupancy of real estate with the owner’s consent for an indefinite period, which either party can terminate at will, often without a formal written agreement or regular payment of rent.

    ◦ Tenancy at Sufferance (Estate at Sufferance): Occurs when a tenant remains in possession of a property after the lease term has expired, and the landlord has not yet demanded they vacate but continues to accept rent.

• Lien: A legal claim on a property that serves as security for a debt or obligation. It represents a non-possessory interest in real property. Liens can be voluntary (e.g., a mortgage initiated by the owner) or involuntary (e.g., a tax lien or judgment lien imposed without the owner’s direct agreement).

    ◦ Mortgage: A financial contract between a property owner (mortgagor/borrower) and a lender (mortgagee) that creates a specific and voluntary lien on real property as collateral for a loan.

    ◦ Deed of Trust (Trust Deed): A security instrument used to create a voluntary lien on real property to secure a debt, involving three parties: the trustor (borrower), beneficiary (lender), and trustee (neutral third party).

    ◦ Property Tax Lien: An involuntary and specific lien placed on property for unpaid property taxes.

    ◦ Judgment Lien: An involuntary and general lien resulting from a court judgment for unpaid debts, which can attach to all properties owned by the debtor.

    ◦ Mechanic’s Lien: An involuntary and specific lien created by law against real property as security for payment for labor and materials used for property improvement, typically filed by unpaid contractors or subcontractors.

• Freehold Estate: An estate in land where ownership is for an indefinite length of time. It is considered the highest form of estate ownership, granting the holder the right to use, possess, lease, or dispose of the property. Examples include Fee Simple Estates (Fee Simple Absolute, Fee Simple Qualified) and Life Estates.

• Estate in Co-tenancy: A form of shared ownership interest in real property by two or more persons or entities.

    ◦ Joint Tenancy: Ownership by two or more parties with an undivided interest and the right of survivorship (the surviving owners automatically acquire the deceased owner’s share). It requires “unity of time, title, interest, and possession” (TTIP).

    ◦ Tenancy in Common: Ownership by two or more persons, with each having an undivided interest but without the right of survivorship. Each owner can transfer their interest independently.

• Personal Property (Personalty or Chattel): Any property that is not real property and is generally movable. Examples include household furnishings, jewelry, corporate stock, and promissory notes. A lease, though granting rights to real property, is categorized as personal property.

• Real Property (Realty): Land and anything permanently attached to it, including natural resources (like mineral and water rights, airspace) and man-made improvements (such as buildings, fences, and sidewalks). It also includes the “bundle of rights” associated with ownership. The primary document to confirm ownership is the deed.

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