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Chapter 48
INTERESTS IN REAL PROPERTY
A. Freehold Estates
1. Fee Estates
a. Fee Simple Estate
b. Qualified or Base Fee Estate
2. Life Estates
3. Future Interests
a. Reversions
b. Remainders
B. Leasehold Estates
1. Creation and Duration
a. Definite Term
b. Periodic Tenancy
c. Tenancy at Will
d. Tenancy at Sufferance
2. Transfer of Interests
a. Transfers by Landlord
b. Transfer by Tenant
3. Tenant's Obligations
a. Destruction of the Premises
b. Eviction
c. Abandonment
4. Landlord's Obligations
a. Quiet Enjoyment
b. Fitness for Use
c. Repair
c. Landlord's Liability for Injury Caused
by Third Parties
C. Concurrent Ownership
1. Tenancy in Common
2. Joint Tenancy
3. Tenancy by the Entireties
4. Community Property
5. Condominiums
6. Cooperatives
D. Nonpossessory Interests
1. Definition of Easements
2. Type of Easements
3. Creation of Easements
a. Express Grant or Reservation
b. Implied Grant or Reservation
c. Necessity
d. Dedication
e. Prescription
4. Profits `a Prendre
5. Licenses
Cases in This Chapter
Home Rentals Corp. v. Curtis
Tucker v. Hayford
Kettler v. Security National Bank of Sioux City
Borton v. Forest Hills Country Club
Chapter Outcomes
After reading and studying this chapter, the student should be able to:
Identify and explain the freehold interests: (1) fee simple, (2) qualified
fee, (3) life estate, (4) remainder interest, and (5) reversionary
interest.
Distinguish between a vested and contingent remainder.
Explain the primary rights and obligations of landlords and tenants.
Identify and explain the various forms of concurrent ownership of real
property.
Identify and describe the various ways in which an easement may be
created.
TEACHING NOTES
Interests in real property may be divided into possessory and nonpossessory
interests.
• Possessory interests, or estates, may also be characterized in two
di*erent ways: (1) as freehold estates (those that exist for an
indefinite time or for the life of a person) and (2) less-than-freehold
estates, also known as leasehold estates (which exist for a
predetermined time).
• Nonpossessory interests in property include easements, profits `a
prendre, and licenses.
Interests in property may be owned by one person or concurrently by two or
more persons, each of whom is entitled to an undivided interest in the entire
property.
*** Chapter Outcome ***
Identify and explain the following freehold interests: (1) fee simple, (2) qualified fee,
(3) life estate, (4) remainder interest, and (4) reversionary interest.
A. FREEHOLD ESTATES
A freehold estate is a right of ownership of real property for an indefinite
time (fee estate) or for the life of a person (life estate). The most valuable
estates in real property are usually present estates that combine immediate
possession with ownership at least for life.
Fee Estates
Fee estates include the right to immediate possession for an indefinite time
and the right to transfer the interest by deed or will. Fee estates include both
fee simple and qualified fee estates.
Fee Simple Estate— Fee simple means the property is owned absolutely.
The absolute rights to transfer ownership and to transmit ownership by
inheritance are basic characteristics of a fee simple estate. Fee simple is the
largest estate in land; all other estates derive from it.
Life Estates
A life estate is an ownership right in property for the life of a person.
A remainder is the ownership estate that takes effect when the prior life
estate terminates. The property may either revert to the grantor and his
heirs, or to another party: for example, “to Alex for life and then to Mario
and his heirs.” Alex is the life tenant, and Mario is the remainderman.
A life tenant may make reasonable use of the property as long as he does
not commit “waste,” (any act or omission that permanently injures the realty
or unreasonably changes its characteristics or value).
Future Interests
Not all interests in property carry the right to immediate possession, even
though the right and title to the interest are absolute. For example, when
property is devised by will “to Andrew during his life and then to Barbara and
her heirs,” Barbara has a definite, existing interest in the property, but she is
not entitled to immediate possession. Future interests are two types:
*** Chapter Outcome ***
Distinguish between a vested and contingent remainder.
A vested remainder is one in which the only contingency to possession by
the remainderman is the termination of all preceding estates created by the
transferor.
A contingent remainder is one in which the right to possession depends on
the happening of some event in addition to the termination of the preceding
estates.
NOTE: See Figure 48-1: Freehold Estates.
B. LEASEHOLD ESTATES
• A lease is both a contract and a grant of land.
• Contract: The owner of the land, the landlord, grants to another, the
tenant, an exclusive right to use and possess the land for a definite or
ascertainable period.
• Grant: The possessory term granted by the landlord is an estate in
land called a leasehold estate. The landlord retains a reversion in the
property.
The Uniform Residential Landlord and Tenant Act, which was promulgated by
the Uniform Law Commission, provides a comprehensive system for
regulating the relationship between landlords and a tenants and governs
most persons who reside in rental housing.
Creation and Duration
The usual requirements for a contract apply. In most jurisdictions, leases for
a term longer than a specified period — generally either one year or three
years — must be in writing. (A few states require that all leases be in
writing.)
De nite Term — Automatically expires at the end of the term. No notice to
terminate is required.
Periodic Tenancy — A lease of indefinite duration that continues for
successive periods unless terminated by notice. A periodic tenancy may
arise by implication, when no term is stated in the lease. This creates a
tenancy at will.
Tenancy at Will — A lease which allows either party to terminate at any
time or which does not specify a duration. No notice is required to terminate.
Tenancy at Su(erance — A tenancy at su*erance arises when a tenant
fails to vacate the premises at the expiration of the lease. A tenancy at
su*erance exists until the landlord either dispossesses the tenant or holds
her for another term.
Transfer of Interests
Both the tenant’s possessory interest and the landlord’s reversionary interest
in the property may be freely transferred in the absence of contractual or
statutory prohibition — the one major exception: the tenancy at will.
Transfers by Tenant — A tenant may dispose of his interest either by (1)
assignment or (2) sublease. Most standard leases expressly require the
landlord’s consent to an assignment or subletting of the premises.
In a sublease, the tenant transfers less than all of her rights in the lease and
thereby retains a reversion in the leasehold. The sublessee has no obligation
to the landlord but only to the original tenant.
*** Chapter Outcome ***
Explain the primary rights and obligations of landlords and tenants.
Tenant’s Obligations
The leasehold estate carries only an implied obligation of the tenant to pay
rent, but the lease contract almost always contains an express promise or
covenant by the tenant to pay a specified amount of rent at specified times.
Most leases provide that if the tenant breaches any of the covenants in the
lease, the landlord may declare the lease at an end and regain possession of
the premises. Under common law, the tenant’s failure to pay rent when due
gives the landlord only the right to recover a judgment for the amount of the
rent but does not give him the right to oust the tenant from the premises. In
most jurisdictions, however, the common law rule has been changed by
statute to allow the landlord to dispossess the tenant for nonpayment of
rent, even if the lease provides no such right.
Unless the lease makes specific provisions to the contrary, the tenant is
under no duty to make repairs to the leased premises. Nevertheless, the
tenant is obliged — by law, so it need not be stated in the lease — not to
cause substantial injury to the premises.
Destruction of the Premises — If the tenant leases land and a building
Landlord’s Obligations
Under common law, the landlord has few obligations to her tenant.
Quiet Enjoyment — The tenant’s right to physical possession, use, and
enjoyment of the premises free of the landlord’s interference. The landlord
CASE 48-1
HOME RENTALS CORP. v. CURTIS
Appellate Court of Illinois, Fifth District, 1992
236 Ill.App.3d 994, 602 N.E.2d 859, 176 Ill. Dec 913
http://scholar.google.com/scholar_case?
case=12032393052396288209&hl=en&as_sdt=2&as_vis=1&oi=scholarr
Harrison, J.
[In February 1989, Home Rentals agreed to rent a single-family residence
to Chris Curtis, Ed Domaracki, Mike Fraser, and Carson Flugstad
(tenants), all of whom were students at Southern Illinois University. The
terms of the written lease stated that the lease was to commence on
August 17, 1989, and to expire on August 13, 1990. The tenants were to
receive the premises in “good order and repair,” rent was to be $740 per
month, and a $500 deposit was required. The tenants initially paid $1,980
to cover the deposit and advance rent for the last two months of the
lease.
clean the house, but the roach problem continued even after professional
extermination, and Home Rentals did nothing about the plumbing. The
tenants were never able to stay in the house. On August 21, the tenants
finally sought housing elsewhere. They advised Home Rentals that they
would not be living in the house, returned the keys, and reported the
condition of the house to the city of Carbondale’s Code Enforcement
Division. The city notified Home Rentals on August 25, 1989, that it had
found numerous city code violations and warned the corporation that the
house would be posted “occupancy prohibited” unless all violations were
corrected within 72 hours. By August 28, 1989, eleven days after the
A constructive eviction occurs where a landlord has done “something of a grave and
permanent character with the intention of depriving the tenant of enjoyment of the
premises.” [Citation.] Because persons are presumed to intend the natural and probable
consequences of their acts, constructive eviction does not require a finding that the landlord
had the express intention to compel a tenant to leave the demised premises or to deprive him
of their beneficial enjoyment. All that is necessary is that the landlord committed acts or
omissions which rendered the leased premises useless to the tenant or deprived the tenant of
the possession and enjoyment of the premises, in whole or part, making it necessary for the
tenant to move. * * *
Home Rentals correctly points out that a tenant may not abandon premises under the
theory of constructive eviction without first affording the lessor a reasonable opportunity to
correct the defects in the property [citation], but such an opportunity existed here. Home
Rentals’ president, Henry Fisher, admitted that he actually inspected the premises as early as
August 13. * * *
* * *
For the foregoing reasons, the judgment of the circuit court of Jackson County is
affirmed.
Affirmed.
Fitness for Use — Under common law, the landlord is under no obligation
to maintain the premises in livable condition or to make them fit for any
purpose. Most courts, however, now impose an implied warranty of
habitability that requires leased premises to be habitable including adequate
weatherproofing; heat, water and electricity, as well as clean, sanitary, and
