real estate interests

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


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


Life Estates

Highest & Best ownership-indefeasible


Freehold Estates

Fee Estates

Fee Simple Absolute


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


Freehold Estates

Fee Estates

Fee Simple Absolute


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


Freehold Estates

Fee Simple


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




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:




Freehold Estates

Fee Simple


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




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:



Freehold Estates

Fee Simple


Conventional

Life Estate

Legal

Life Estate

Dower and

Curtesy Homestead

Wife’s assets

Husband’s assets


Freehold Estates

Fee Simple


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


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


• 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.


Leasehold Estates


• Estate at Will (Tenancy at Will)

• (With the Landlord Consent Month to Month)

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


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


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

real estate interests

Documents