California Real Estate Practice Exam

Which type of estate is a freehold estate?

1. Estate at will

2. Estate for years

3. Estate from period-to-period

4. Fee simple estate

The correct answer is: Estate at will

A fee simple estate is a type of freehold estate, characterized by the most complete ownership of real property. It implies that the owner has indefinite duration of ownership and can use the property without restrictions from the previous owner, apart from local laws. A fee simple estate can be inherited and sold, making it the highest interest in real estate recognized by law. In contrast, an estate at will, estate for years, and estate from period-to-period are all classified as non-freehold estates or leasehold estates. They signify temporary rights to occupy or use the property, often under a specific agreement or contract. This means they do not provide the same level of ownership or interest in the property as a fee simple estate. Consequently, these leasehold interests can be terminated more readily and do not offer the same rights of inheritance or permanence. Understanding the different types of property interests is essential in real estate practice, as it affects ownership rights, duties, and the transferability of property. The fee simple estate stands out for its full ownership rights and the potential for indefinite possession, distinguishing it from the more temporary non-freehold estates.