Maryland Home Improvement PSI Practice Exam

What distinguishes freehold estates from nonfreehold estates?

1. Are of indeterminable duration.

2. Terminate upon the death of the person on whose life they are based.

3. Are inheritable by the holder's heirs.

4. Are estates for a fixed term.

The correct answer is: Are of indeterminable duration.

Freehold estates are characterized by an indeterminate duration, meaning they do not have a fixed length and can exist indefinitely. These estates provide the owner with a greater degree of ownership rights and potential for ongoing control over the real property. This contrasts with nonfreehold estates, which are typically for a specified, limited duration, such as a lease. As a result, a freehold estate can continue until the owner decides to sell or otherwise transfer the property, or until specified conditions are met, while nonfreehold estates automatically terminate when the agreed-upon time expires. In addition, freehold estates are often inheritable, which allows the owner's heirs to inherit them upon their death, thereby providing long-term control and benefits that can pass down through generations. Nonfreehold estates, in contrast, are not inheritable as they are tied to a specific tenancy or agreement and do not pass to heirs in the same way. This distinction is vital in real estate law since it affects the rights of the property owners and how the properties may be transferred, disposed of, or inherited. Understanding these differences aids individuals in making informed decisions regarding property investments and ownership structures.