HISTORICAL DERIVATIONS
In English Common Law, the word property referred not to the thing owned, but rather to the rights which the
owner had: the rights to possess, use, encumber, transfer and exclude others. Property consisted of a “bundle of
rights” or a “bundle of interests” a person had in a thing, whether the thing was real or personal property.
The early English courts distinguished between lawsuits in which the landowner, if wrongfully ousted, could
recover the land itself (the “real thing”) and those lawsuits in which the owner could recover only monetary
damages. By bringing a “real action,” the owner could receive the return of the land, the “real property.” An
action for monetary damages was called “personal,” and the owner’s limited interest was labeled “personal
property.”
In the feudal society of medieval England, an estate was the ownership interest that a person had in the land.
The estate was termed a freehold estate when the owner’s interest was not subject to certain servile incidents or
demands of the overlord. Only an owner of a freehold estate could bring a real action. Therefore, only freehold
estates were regarded as real property. A freehold estate was of indefinite duration. A less-than-freehold estate
was an interest of specified duration.
Freehold Estates
A freehold estate could be an estate in fee or a life estate. An estate in fee could be either absolute or qualified.
An estate in fee simple absolute was the largest estate recognized by the law. Among other rights, its owner
controlled its disposition, including the right to will it. Upon disposition, this estate could become qualified by a
condition. For example, grantor A could sell the estate to grantee B on the condition that the property be used
as a hostel for itinerant musicians. If B changed the use, A could reenter the property and terminate B’s estate.
Hence, B’s fee estate could be defeated and was termed fee simple defeasible.
A life estate would be created if grantor A conveyed real property to B for the life of B or the life of some other
person, with the initial grant controlling disposition of the estate upon the death of B (or the death of the other
person). Again, this was a freehold because its duration was not fixed in specified temporal terms (i.e., months
or years).
Less-Than-Freehold Estates
Less-than-freehold estates were the rights of tenants who rented or leased real property. These estates were
personal property.