©2011 Cengage Learning
California Real Estate
Principles
Chapter 2
Part II: Estates and
Methods of Holding Title
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Owner’s Rights
ESTATES
1. Freehold
POSSESSORY-INDETERMINATE DURATION
(Rights of Owner)
TITLE
FEE SIMPLE
ABSOLUTE
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DEFEASIBLE
LIFE ESTATE
REVERSION
REMAINDER
Fee Simple Estate
 Fee Simple Absolute:
 No private restrictions
 The HIGHEST form of ownership
• Fee Simple Qualified (Defeasible)
– Title is subject to private restrictions
NOTE: All property subject to governmental controls
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LIFE ESTATE
I grant 123 Elm Street to
my mother for her life,
and after her death, to
the Real Estate
Scholarship Fund
Foundation.
Mrs. Smith
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REMAINDER
LIFE ESTATE
I grant to my land
to my mother for
her life, and upon
her death the land
reverts to my
estate.
Mr. Kelly
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REVERSION
LIFE ESTATE
I grant my home to the Real
Estate Scholarship
Endowment Fund, but I
reserve the right of
possession to my home for
the rest of my life.
Mr. J.R. Smith
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RESERVATION
Tenant’s Rights
2. Less-Than-Freehold
POSSESSORY-LIMITED DURATION
(Rights of Tenant)
LEASE-LEASEHOLD-CHATTEL REAL
ESTATE
FOR YEARS
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TENANCY
AT WILL
TENANCY AT
SUFFERANCE
PERIODIC
TENANCY
OWNERSHIP
ONE Owner
1. SEVERALTY
CORPORATION
LIMITED PARTNERSHIP
LIVING TRUST (Inter Vivos)
REIT
SEPARATE PROPERTY
JOINT VENTURES
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INDIVIDUAL
TAKING TITLE WHEN
UNMARRIED
 Title Taken As:
 “A Single Man” or “A Single Woman”
 Never Been Married
 “An Unmarried Man” or
 “An Unmarried Woman”
 Was Married
 Not Married When Acquired
 “Sole and Separate property”
 Are Married
 Acquired During Marriage
 Keeping Separate From Marriage Funds
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OWNERSHIP
 Multiple Owners
2. CONCURRENT
Joint Tenancy
Tenancy in Common
Community Property
Partnership Property
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JOINT TENANCY





Right of survivorship
Equal shares for all joint tenants
No probate. Cannot will the title
interest
Surviving tenant gets title free of
debts of deceased
Four unities must exist:
1.
2.
3.
4.
T
T
I
P
ime
itle
nterest
ossession
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J T
C SELLS
A
B
TO D
A
B
D
C
A & B ARE STILL JOINT
TENANTS D IS A
TENANT IN COMMON
RIGHT OF SURVIVORSHIP
C DIES
A
B
C
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A
B
Registered Domestic Partner
 Rights equal to husband & wife in California due
to Domestic Partnership Law as of January 2005.
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 No right of survivorship. Can leave property by a will
 Involves Probate. Can convey without co-owner’s
permission
 Equal right of possession. Must pay % share of
expenses
 Each owner may sever interest without permission of
others
 Undivided interest in the whole
 Example: A 1/3, B 2/3 or A ¼, B ¼, C ½
C DIES
A
B
C
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A
B
C’s HEIRS
TENANCY IN COMMON
CHARACTERISTICS OF
COMMUNITY PROPERTY
1.
2.
3.
4.
5.
Property acquired during valid marriage or
registered domestic partnership
EXCEPTIONS:
-property acquired before marriage or registered
domestic partnership
-property acquired during marriage or registered
domestic partnership by gift or
inheritance, if not commingled
Equal Co-Managers, Both signatures required to
sell or lease
Each spouse or registered domestic partner has
the right to will to whomever, unless they agree to
the right of survivorship
No probate if left to surviving spouse or registered
domestic partner
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COMMUNITY PROPERTY
 Can ONLY be with held with a spouse or registered
domestic partner
 Real property acquired during the marriage or
registration
 If no title is stated, the Court presumes all property
is Community Property
 Either party may separately will their share
 Requires both signatures to sell or lease
 Injured spouse has one year to void action
 Limited probate proceedings for spouse, no
probate if community property with right of
survivorship
 Undivided interest. Equal management, control,
rights, ownership and possession
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COMMUNITY PROPERTY
HUSBAND WIFE
H
W
W
H DIES INTESTATE
H
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W
H DIES
WILLS ALL HIS PROPERTY TO V
V
W
SEPARATE PROPERTY
 Property owned before marriage or registered
domestic partnership
 Gift or inheritance during marriage or registered
domestic partnership
 Sale proceeds/profit from sales of separate
property
 COMMINGLED becomes community property
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TENANCY IN PARTNERSHIP
 Two or more persons join for a business
 Rights not assignable
 Partners are jointly and severally liable
 General partner
 General partner is responsible for debts
 Unlimited liability for the business debts
 Limited partner
 Only responsible up to the amount invested
 Frequently used for real estate syndicates
©2011 Cengage Learning
Review Quiz Chapter Two
1.
The SE ¼ of the NW ¼, and the SW ¼ of the NE ¼,
and the SW ¼ of Section 22 contains:
a. 2 ½ acres
b. 240 acres
c. 45 acres
d. 165 acres
2. A person appointed by the court to handle the estate:
a. Executor (trix)
b. Administrator (trix)
c. Devisor (ee)
d. Testator (trix)
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Review Quiz Chapter Two
3. A type of deed that contains an after acquired
clause:
a. grant deed
b. quiet deed
c. quitclaim deed
d. gift deed
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Review Quiz Chapter Two
4. “A” deeds to “B” and “B” takes possession but
does not record the deed. “A” then tells a friend
“C” about the deed to “B.” “A” then deeds the
same property to “C” who records the deed.
Based on this information, title probably vests in:
a. “A”
b. “B”
c. “C”
d. both “B” and “C”
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Review Quiz Chapter Two
5. If a married person with one child dies intestate
and leaves separate property, the descendant’s
interest passes to the:
a. surviving spouse and child
b. surviving child, and not the surviving spouse
c. surviving spouse, and not the surviving child
d. surviving parents
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Review Quiz Chapter Two
6. The highest form of ownership a person can have
in a piece of property is:
a. fee simple absolute
b. fee simple qualified
c. life estate
d. testate estate
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Review Quiz Chapter Two
7. “A” deeds a life estate to “B” and upon “B”s death
title is to return to “A.” This is an example of what
type of life estate?
a. estate in reversion
b. estate in reservation
c. estate in remainder
d. estate in severalty
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Review Quiz Chapter Two
8. A valid joint tenancy must have the four unities of:
a. time, title, interest, remainder
b. title, time, possession, interest
c. interest, right, possession, time
d. time, title, occupancy, possession
9. Janet owned a home prior to marriage to Jorge. Upon
marriage, Janet’s home:
a. remains her separate property unless commingled
b. automatically becomes community property
c. is converted to joint tenancy
d. must have a deed recorded showing her married
name
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Review Quiz Chapter Two
10. In which one of the following ways are joint
tenancy and community property similar?
a. title can only be held by husband and wife
b. both provide the right of survivorship
c. all owners have the right to will their interest in
the property
d. ownership shares are equal
©2011 Cengage Learning
Answers to Chapter 2 Review Quiz
1. B
6.
A
2. B
7.
A
3. A
8.
B
4. B
9.
A
5. A
10. D
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