College of agriculture, science and education (case) | BACHELOR OF EDUCATION WITH ADVANCED STANDING | BUSINESS LAW ∏ | | Presented by: Kimberly Morrison-Leigh |

Presented to: Dr. Golding

Identify the different interest in land and state what are the legal principles that are related to the acquisition of interest in real property.

The law recognizes different sorts of interests, called estates, in real property. The type of estate is generally determined by the language of the 5 deed, lease, bill of sale, will, land and grant through which the estate was acquired. Estates are distinguished by the varying property rights that vest in each, and that determine the duration and transferability of the various estates. A party enjoying an estate is called a "tenant."
There are several different ways a party can own an interest in real property. There are possessory types of interests and non-possessory types of interests. This lesson explains the main types of real property ownership.
Possessory Interests
When we talk about ownership interests in real property, we're actually talking about many different types of ownership. Ownership interests come in various forms and, depending on the type of interest, a landowner's rights may be limited. Let's start by exploring some of the possessory interests possible when owning land. A possessory interest is the intent and right of a party to occupy or exercise control over a particular plot of land. This is the type of ownership most of us think about when we think about land ownership. There are three main types of possessory interests: fee simple absolute, life estate, and leasehold. Let's start with the greatest possible interest in land.
Fee Simple Absolute
A fee simple absolute is an ownership interest that includes all rights in the land. Just as the name suggests, this type of estate represents absolute ownership of the land. A fee simple absolute owner may do whatever he or she chooses with the land. The owner can use the land, destroy the land, give the land to someone else, and take items from the land. The landowner is limited only by zoning and building codes, or other governmental restrictions.
The landowner can deed or will the entire fee simple estate to another person. This means that, should the landowner die without a will, the fee simple absolute ownership will automatically pass to the owner's heirs. Sometimes a fee simple interest isn't absolute. There are times when a fee simple interest is granted, but the interest comes with certain conditions. These are known as conditional estates. Let's look at two examples.
A fee simple determinable is an ownership interest that automatically ends when a specified event occurs. For example, let's say that I grant my farm to a local agricultural college. My deed says that I grant my land to the university, 'as long as it is used for educational purposes.' This means that, if the university stops using the land for educational purposes, the grant automatically ceases and I own the land again. Or, if I'm deceased, my heirs will own the land.
This is similar to a fee simple subject to a condition subsequent. In this type of ownership interest, a landowner may reclaim the land if a specified event occurs. Notice that, unlike the fee simple determinable, the ownership interest doesn't automatically terminate. For example, let's say that I grant my land to the university, but specify that, 'if corn ceases to be grown on the land, I can reclaim the land.' So, if the university decides not to grow corn, I can reclaim the land, or my heirs may reclaim the land if I'm deceased.
Life Estate
Let's turn to another form of possessory interest. A life estate is a land interest that expires upon the death of a specified person. For example, let's say that I grant my land as a life estate to my stepsister Susie. This means that Susie can occupy, possess, and enjoy the property during her lifetime, just as if it were a fee simple. However, Susie's ownership interest in the land will automatically stop upon her death. Rather than passing to her heirs, the land will pass back to me. Or, if I'm deceased, the land will pass to my heirs. Susie can't will the property to another person.
Life estates aren't common, but this type of interest can be helpful for estate planning purposes. Let's say that I'm married to Marvin. I want Marvin to be able to live on and enjoy my land after my death, so I grant him a life estate. However, after Marvin's death, I want my land to go to my heirs, rather than Marvin's heirs. The life estate assures that the land will revert to me, or to my heirs, upon Marvin's death. If I granted Marvin a fee simple, then the land would go to Marvin's heirs upon Marvin's death.
Leasehold
The last type of possessory interest is called a leasehold estate. A leasehold, or lease, is an interest in real property that grants possession for a particular duration. The lease can last for one year, can last for many years, can be week-to-week, or can be month-to-month. The duration doesn't matter, as long as it's specified in some way. A leasehold doesn't grant actual title to the land. Therefore the lease owner can't will the property to someone else. Rather than a deed or title, the lease owner will have a lease agreement that dictates the rights and obligations of both the lease owner and the property owner. The lease will terminate and the property owner will regain all rights if one or both parties violate a term of the lease agreement.
Leases are quite common. There are four main types of leases: 1. Estate for years. In this type of lease, the duration of the lease is specified as a certain period using calendar time. The lease both starts and ends on a particular date, as set out by the property owner.

2. Periodic tenancy. In this type of lease, the exact duration of the entire lease isn't specified, though the lease is for a definite period of time that automatically renews. These leases usually run month-to-month or week-to-week until either the lease owner or the property owner gives notice of termination.

3. Tenancy at will. In this type of lease, either party can terminate the lease at any time and for any reason, though most states require that notice of termination be given to the other party. The lease start date is specified but the end date is indeterminate.

4. Tenancy at sufferance. In this type of lease, a specified lease date has expired, but the tenant remains on the property. This type of leasehold begins as an estate for years, but then converts into a periodic tenancy. For example, I lease an apartment through January 1, but I fail to find another apartment by January 2. So, I remain in my current apartment and my lease converts to a month-to-month until I either sign a new lease with my current landlord, or I terminate the lease by giving notice and moving out.

Legal Interests
The interests in or over land which are capable of being legal interests are those identified in s.1(2) Law of Property Act 1925. They are * An easement, right or privilege in or over land equivalent to the duration of an estate in fee simple absolute in possession or a term of years absolute; * A rent charge, i.e. the land is charged with the payment of an annual or periodic sum to a rent charge owner (this does not include rent paid under a lease).; * A charge by way of legal mortgage; * A right of entry exercisable over or in respect of a legal term of years absolute or as an extension to a legal rent charge.
If it falls within s.1(1) or (2) LPA 1989, a right will be legal if it has been created with proper formality, which usually means the use of a deed:
Equitable interests
Traditional Equitable interests
These include: * the interest of a beneficiary under a trust. A trust exists when the legal estate in property is held by one person (known as a trustee) upon trust for another (known as a beneficiary), either because an express trust is created or because equity recognises that a trust exists because of the circumstances:
For example; Steve buys land with money provided by Angela. Steve will hold the legal estate in the land as a trustee on trust for Angela who is known as a beneficiary. * The interest arising under a contract relating to a legal estate or legal interest e.g. an agreement to buy land. If Steve agrees to buy the land from Angela as soon as the agreement is made Steve will have an equitable interest in that land. * Restrictive covenants. A restrictive covenant is a contract contained in a deed by which one person promises not to do something on his land