Estates and tenancies could probably be one of the most important things you could learn about the true ownership rights you have over your property. Estates and Tenancies dictate whether you’re a tenant or landlord by fee simple means.

What is “Fee Simple” you ask?

Lucky for you, we’ve already covered this segment in an article we titled “Estates & Tenancies, Your Real Estate Ownership Rights”. As mentioned in the previous article just provided, Estates and Tenancies are interchangeable in this context. If you’d like to learn more about:

• Freehold Estate
• Fee Simple Title
• Life Estate
• Estate in Reversion
• Remainderman and
• The Bundle of Legal Rights

We highly recommend you start with that article and follow up with this one. It will help you to better understand the Bundle of Legal Rights and how that is associated with today’s topic of non-freehold or leasehold estates.

TECHNICAL NOTE: Keep in mind that a leasehold estate is an interest a tenant holds in real property. In technical terms, while the tenant is holding a leasehold estate, the landlord simultaneously holds a reversion estate. (Also talked about in our previous article.)

RELATED ARTICLE: Property Management: The Process

Unlike a fee simple estate, which provides for an indefinite time and untethered scope of ownership. A leasehold estate always has a definite beginning and end. Its duration is known and opposite of absolute ownership, this estate does not provide ownership rights. This is very important as not all of the legal rights usually associated with a real property will transfer to the tenant. All ownership rights will stay with the landlord and the tenant will have a limited scope of ownership.

What are the estates afforded to a tenant?

• Estate for Years
• Tenancy at Will
• Tenancy at Sufferance

In most of these cases, you could probably just look at the name of the different types of estates and come with a conclusion as to what each one refers to. At first glance, they are pretty much self-explanatory but for this conversation, we will delve into them a little deeper. The most severe of the three is Tenancy at Sufferance. It comes with the most feud between a tenant and their landlord and can even extend to the legal system.

RELATED ARTICLE: Florida’s First-Time Home Buyer Down Payment Assistance Program

An estate for years is the most common of all tenancies for non-homeowners across the united states. An estate for years has a definite start and end date. This can be compared to your typical rental agreement for a 1-year contract. You have a start and an end date, while the owner of the property holds a reversion estate until your contract runs out and you choose not to renew.

This type of estate conveys limited ownership rights, also known as “Basic Property Rights”. The basic property rights conveyed are limited to the “Right of Quite Enjoyment and Exclusion”. This limited ownership does not allow the tenant to have access to the title or the right of disposition.

RELATED ARTICLE: Preparing to Buy your Home

A tenancy at will is exactly just that… At Will. This is also a very common type of tenancy. A tenancy at will has a beginning start date. However, it does not provide for an ending date of the agreement. This is because in most cases, a tenancy of such a manner can be easily acquired after the initial estate for years agreement expires. Once the estate for years is no longer active, the tenant can continue with their basic legal rights of quite enjoyment or exclusion on a week-to-week basis or a month-to-month basis.

A tenancy at will is still an agreement. Albeit a verbal agreement and in some cases, written as stated in the initial contract. A tenancy at will usually provides for exceptions that acknowledges a tenant’s right to continue their estate but instead of “for years”, it is “at will”.

RELATED ARTICLE: How To Avoid Getting Your Home Loan Application Denied

A tenancy at sufferance is probably the last position you want to be in. This estate is only present after a tenant’s contract has expired or they do not meet their contractual financial obligations. If the contract expires and the landlord has given their 60 days’ notice to vacate, and the tenant does not leave the premises, a tenancy at sufferance will be created.

A tenancy at sufferance focuses on some key points.

• Ending date of legal tenancy
• Landlord consent
• Continuous possession of property by tenant

If the tenant chooses to continue occupying the property and making payments and the landlord decides to leave the tenant in the premises with full consent, then a tenancy at will is created. This automatically solves all the problems for the tenant and concludes our wrap up of Estates and Tenancies, two-part SAGA!

If you liked this article and learned something from it, please send us a message so that we can know what our readers and potential clients are most interested in.