real estate interests
TRANSCRIPT
Chapter VII Real Estate Interests 1
REAL ESTATE INTERESTS Page 25 of the Outline
The word Estate refers to the degree, quantity, nature and extent of an owner’s interest in property. An estate must allow possession (either now or in the future) and must be measurable by duration. Estates are divided into 2 categories:
Freehold Estates
Non Freehold - Leasehold Estates
1. Freehold Estates last for an indeterminable length of time, such as for a lifetime or forever. They are further divided into:
A. Freehold Estates – An Estate In Land
Fee Estates
Life Estates
Chapter VII Real Estate Interests 2
Freehold Estates
Fee Estates
Life Estates
Ownership
Is
Absolute
•Fee Estates – Highest Form of Ownership •Unlimited or Indefinite Period of Time
•Inheritable
Freehold Estates
Fee Estates
Fee Simple Absolute
Fee Simple Defeasible
Life Estates
Freehold Estates
Fee Estates
Fee Simple Absolute
Fee Simple Defeasible
Life Estates
Highest & Best ownership-indefeasible
Chapter VII Real Estate Interests 3
Freehold Estates
Fee Estates
Fee Simple Absolute
Fee Simple Defeasible
Life Estates
‘’Qualified’ estate Subject to occurrence or non-occurrence of
an event…on the condition that…
Freehold
Estates
Fee
Estates
Fee Simple Absolute
Fee Simple
Defeasible
Fee Simple
Determinable Conditions
Precedent/Subsequent
Life Estates
“So Long As” “While”
“During” Page 22 of
the Module I Handout
Chapter VII Real Estate Interests 4
Freehold Estates
Fee Estates
Fee Simple Absolute
Fee Simple Defeasible
Fee Simple Determinable
Conditions Precedent/Subsequent
Life Estates
Do Something First Not Do Something
Later Page 23 of the Module
I Handout
Freehold
Estates
Fee
Estates
Life
Estates
Freehold Estates
Fee Simple
Estates Life Estates
Conventional
Life Estate
Legal
Life Estate Intentional
Chapter VII Real Estate Interests 5
Freehold Estates
Fee Simple
Estates Life Estates
Conventional
Life Estate
Ordinary
Life Estate
Pour Autre
Vie
Legal
Life Estate
Life Estate With Reverter Page 21of the Module I Handout
WARRANTY DEED
For value received, Buford T. Schmendeldorf, a widower,
Grantor(s) of Ada County of the State of Idaho, hereby
CONVEYS, GRANTS and WARRANTS TO Sally A.
Schmendeldorf, a single woman, for her life, Grantee(s) whose
mailing address is 1326 18th Street , Boise , Idaho 83709 in the
sum of Love and Affection ($0) the following described
property located in Ada County, State of Idaho:
Lot 1 Block 2 of Glennaire Subdivision as recorded in Book 1
of Plats, Page 13, records of Ada County.
Life Estate With Remainder Page 20 of the Module I Handout
WARRANTY DEED
For value received, Buford T. Schmendeldorf, a widower,
Grantor(s) of Ada County of the State of Idaho, hereby
CONVEYS, GRANTS and WARRANTS TO Sally A.
Schmendeldorf, a single woman for her life, with the
Remainder to William T. Schmendeldor, an unmarried man,
Grantee(s) whose mailing address is 1326 18th Street , Boise ,
Idaho 83709 in the sum of Love and Affection ($0) the following
described property located in Ada County, State of Idaho:
Lot 1 Block 2 of Glennaire Subdivision as recorded in Book 1
of Plats, Page 13, records of Ada County.
Chapter VII Real Estate Interests 6
Freehold Estates
Fee Simple
Estates Life Estates
Conventional
Life Estate
Ordinary
Life Estate
Pour Autre
Vie
Legal
Life Estate
Pour Autre Vie Estate (For the Life of Another) Page 19 of the Module I Handout
WARRANTY DEED
For value received, Buford T. Schmendeldorf, a widower,
Grantor(s) of Ada County of the State of Idaho, hereby
CONVEYS, GRANTS and WARRANTS TO Sally A.
Schmendeldorf, a single woman, for the life of Annie L.
Schmendeldorf, a single woman, Grantee(s) whose mailing
address is 1326 18th Street , Boise , Idaho 83709 in the sum of
Love and Affection ($0) the following described property
located in Ada County, State of Idaho:
Lot 1 Block 2 of Glennaire Subdivision as recorded in Book 1
of Plats, Page 13, records of Ada County.
Freehold Estates
Fee Simple
Estates Life Estates
Conventional
Life Estate
Legal
Life Estate
Dower and
Curtesy Homestead
Wife’s assets
Husband’s assets
Chapter VII Real Estate Interests 7
Freehold Estates
Fee Simple
Estates Life Estates
Conventional
Life Estate
Legal
Life Estate
Curtesy for him
Dower for her Homestead
Freehold Estates
Fee Simple Estates
Life Estates
Conventional Life Estate
Legal Life Estate
Community Property In Idaho
Homestead
Freehold Estates
Fee Simple Estates
Life Estates
Conventional Life Estate
Legal Life Estate
Curtesy for him Dower for her
Homestead
Chapter VII Real Estate Interests 8
B. Leasehold Estates Page 26 of the Outline - Page 38 of the Module I Addt’l Materials
The tenant’s rights to possess property for the term of a lease is a Leasehold Estate
› Parties Involved in Lease
Lessor (Landlord) Leased Fee Interest with a Reversionary Right
Lessee (Tenant) Leasehold Interest
Contract and Conveyance
Leasehold Estates
• Types of Leasehold Estates
• Estate for Years (Tenancy for Years)
• Has a specific beginning and specific ending and does not automatically renew
Leasehold Estates
• Types of Leasehold Estates
• Periodic Tenancy (Estate From Period to Period)
• Is for a specific period of time, but automatically renews. If the landlord wants to terminate, must provide notice.
Chapter VII Real Estate Interests 9
Leasehold Estates
• Types of Leasehold Estates
• Estate at Will (Tenancy at Will)
• (With the Landlord Consent Month to Month)
Leasehold Estates
• Types of Leasehold Estates
• Estate at Sufferance
• Continuing to occupy the premises improperly after a tenants lease rights have expired
Leasehold Estates Types of Leases Fixed Rental Leases
› Gross Leases (tenant pays only rent, landlord pays taxes, utilities, etc.)
› Net Leases (tenant pays rent + some expenses)
› Triple Net Leases (insurance, taxes, utilities)
Percentage Leases
› 9% - My Required Return on My Investment › $350,000 Gross Sales * 9% = $31,500
Chapter VII Real Estate Interests 10
Leasehold Estates
Percentage Leases
$ 1,500.00 x12 $ 18,000.00
$ 18,000.00 x 9% $ 200,000.00
$350,000.00
-$200,000.00
$150,000.00 x9% $ 13,500.00
Received
Rent $18,000.00
Total Rent $ 31,500.00
Monthly
Rent
Owner’s
Required
Investment
Return
Lessee’s Gross
Sales Volume
Sales Volume
Based on
Agreed Rent
Leasehold Estates
Percentage Leases
$ 1,500.00 12 $ 18,000.00
$ 18,000.00 9% $ 200,000.00
$200,000.00 -$200,000.00
$0 $ 0
Received Rent $18,000.00
Total Rent $ 18,000.00
Leasehold Estates
Variable Leases
› Step or Graduated Leases
› Indexed Leases (Idaho Economic Forecast)
Ground Leases
Oil & Gas Leases
Re-Evaluation or Reappraisal Leases
Agricultural Leases
› Cash Rental
› Crop – Livestock Share
› Share – Cash
Sale and Leaseback
Chapter VII Real Estate Interests 11
Leasehold Estates
Assignment, Subleasing & Novation Recording a Lease Discharge or Termination of Lease
› Notice › Expiration of Term › Breach of Conditions Tenant Breaches: Actual Eviction Landlord Breaches: Constructive Eviction
› Surrender and Acceptance › Destruction of Property › Foreclosure › Death of Parties
C. Idaho Statutes Related to Leases 1. Written or Oral (If Over One Year, It Must Be in Writing) 2. Rights and Responsibilities of Landlord and Tenant
Possession
Entry by the Landlord (Must be covered in the lease)
Security Deposits (Not for normal wear and tear)
Care of Property
Tenant’s Property – Abandoned or Unclaimed Property Laws
Rent Increase – 15 Days Notice
Other Changes in Lease Agreement Terms – (15 Days on periodic leases)
Leasehold Estates Rights and Responsibilities of Landlord and Tenant
• Termination Due to Breach • Landlord’s Remedies (Notice to cure. Cure in 3 days or start an
action)
• Tenant’s Remedies (Notice to cure. Cure in 3 days or start an action)
• Floating Homes Residency Act • Requires a written agreement
• Must define a specific moorage
• Mobile Home Park Landlord-Tenant Act • 90 days to terminate by Landlord, 30 days by tenant