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What is a Nonfreehold Estate? | Real Estate Exam Prep Videos - YouTube
Channel: The Real Estate Classroom
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everybody my name is Paul the Chesky and
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welcome to the real estate classroom
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YouTube channel this YouTube channel is
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strictly reserved for those people
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trying to study to pass their real
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estate licensing exam and we provide
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videos and tools and tips for those
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students to pass their real estate exam
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before we get started please very
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important let's get some traffic for the
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channel give this video a thumbs up hit
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that red subscribe button and hit that
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little notification bell before I get
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into this video I highly recommend that
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you watch another video so you have some
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basis for this one up in the upper right
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hand corner of your screen there's going
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to be an eye that should pop up about
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right now that is a link to a previous
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video I did on freehold and non freehold
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Estates where I explain both of them in
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fact the reason I'm doing this one
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specifically on non freehold is in that
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previous video I didn't feel like I
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explained the concept well enough for
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you to have the information that you
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need for the lice the real estate
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licensing exam so I decided to do a
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supplemental video here alright if you
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watch the video already you know that a
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freehold estate means ownership a non
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freehold estate means non ownership in a
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freehold estate we had three concepts or
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three key three key terms we had fee
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simple absolute meaning the owner had
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absolute ownership to to the bundle of
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rights we had the fee simple defeasible
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where the person owned it but there was
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a restriction that prevented absolute
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fee simple ownership and then we had the
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life estate where there was ownership
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but again the life tenant had a lot of
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restrictions the the non freehold estate
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means non ownership and legal interest
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so non ownership very important to
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remember that but even though there's
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non ownership the individual does have a
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legal interest in the property and the
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most common is the landlord tenant
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relationship when a lease is signed
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between the landlord and the tenant that
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landlord-tenant relationship or that non
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freehold estate is been
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created and we have to call it something
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because both sides have interest because
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remember the landlord has before the the
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lease agreement was signed the landlord
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has the legal right of ownership and the
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legal right of possession so when the
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lease is signed the landlord is
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transferring to the tenant the legal
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right of possession but maintains the
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legal right of ownership so therefore
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they both have a legal interest in the
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property very important that you know
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the landlord's legal interest is called
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a leased fee interest and the tenants
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legal interest in the property is known
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as a leasehold interest the way I used
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to remember this when I sat where you
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are is the tenant or the landlord
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charges a fee called rent and the tenant
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if they don't pay that fee called rent
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then they hold the property hostage
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until the eviction happens so we call
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the legal interest that the landlord and
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the tenant have in a non freehold estate
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then landlord has leased fee interest
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and the tenant has the leasehold
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interest now we now have to define the
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quality of this estate or the quality of
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the the legal interest and I'm sure
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you've already heard this before but now
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we're just gonna use the legal terms so
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there are four potential qualities in a
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non freehold estate so we already know
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they have a legal interest and this is
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what they call them but here is this
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represents the quality of that legal
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interest the first one is what we call
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tenancy for years in tenancy for years
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means for example on an apartment lease
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that is a one-year lease it could be a
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six-month lease it could be a two-year
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lease in commercial it could be a
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five-year lease the key with tenancy for
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years means there is a fixed expiration
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date all right it has a fixed defined
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expiration date it doesn't have to
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technically be for a full year it could
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be for a three month period a six month
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period
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the key is tenancy for years means
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there's a fixed expiration this lease
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ends
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March 31st 2020 periodic tenancy means
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its month-to-month most of you have
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heard of a month-to-month lease
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agreement that's the quality of this
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legal interest tenancy at will simply
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means that at any time the landlord or
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the tenant can give notice and they
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immediately have to get out in fact with
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the periodic tenancy as you know where
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it's month-to-month usually some type of
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notice to vacate it has to be given by
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the landlord or the tenant typically
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it's 30 days in most states tenancy for
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will though just means I could give
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notice right now either the landlord or
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the tenant could give notice and they
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have to leave immediately quite honestly
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most hotels run on a tenancy at will
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because you can pay and you're there for
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24 hours or whatever checkout time is
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but if you throw a loud party they can
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come up and throw you out at any time
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and you're not entitled to a refund
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because it's a tenancy at will
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relationship that is the quality of the
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estate and then the last one is tenancy
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at sufferance
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now the key root word here is sufferance
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this is where the tenant is in the
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property still has the legal right of
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possession has it been paying the rent
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and the eviction hasn't happened yet so
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the landlord has no money coming in and
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it holdover tenant that is called
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tenancy at sufferance so again just to
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recap it non freehold estate means non
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ownership legal interest the tenant has
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what's called a leasehold interest and
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the landlord has what's called a leased
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fee interest and then these four items
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that's the quality of the estate or the
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quality of the legal interest in that
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landlord-tenant relationship a lot of
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key terms in there I know and I kind of
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shotgun through but if you have any
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questions or you need clarification down
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below in the comment section please ask
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and I will return with an answer or the
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clarification okay before I go do me a
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favor if you have already taken the exam
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would you please do me a favor if you
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had a question on anything relating to a
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freehold or an on freehold estate please
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put it down in the comment section you
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don't have to know what the question was
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precisely just generically that way
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you're sharing that information with the
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community that's using this channel I
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would appreciate that okay that's all I
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have for this video if you have not
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taken your real estate exam yet
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best of luck we'll see in the next video
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