Virginia Real Estate: Types of Land Ownership
If you are a landowner or are thinking about purchasing land, there are several things you need to know before you begin your investment. Land comes in several different shapes, sizes, and types of ownership. These types of ownership can have significant impacts on several other aspects of your life including estate planning, liability for injuries on the property and much more. Ownership can be defined by several factors including how long you can stay on the land, what you are allowed to do on the land, and what other people who invested with you can do with the land.
So what are the major types of land ownership?
Fee Simple
This category of land ownership refers to a complete grant of title to the property. If you own land in fee simple, you own the land outright. The types of limitations that can be placed on a fee simple ownership are limited. A common example of a fee simple ownership is if your grandmother were to deed you complete ownership of the family farm. Common limitations on ownership may include that you are required to continue operating the land as a family farm. In the event that you fail to continue to operate the land as a family farm, you may potentially forfeit your rights to the property under some situations.
The law further splits up fee simple ownership into several subcategories, but those subcategories are best discussed with your real estate lawyer.
Life Estate
The next category of land ownership is a life estate. A life estate is a grant of ownership in land for a limited period of time. This period of time is commonly measured by the land owner’s life span. A common example of a life estate is if your grandmother were to deed you the family farm for your entire life time, the family farm to pass on to a grandchild at the time you are deceased.
Leasehold Interest
The next major category of land ownership is a leasehold estate. The most common example of a leasehold estate is a leasing agreement with a landlord. Upon signing a leasing agreement, you have an interest in staying in the land pursuant to the terms of the lease. Another example that is common in the rural United States is a leasehold farming interest. Many farmers in the rural United States lease farming land from the federal government. Some private industries also do this type of leasehold estate. For example, a cocoa farm may lease a house and the land to a tenant for farming purposes.
Condominiums
The last major category of land ownership is a condominium. A condominium is a larger property that has been split into several pieces. These pieces are then sold to individuals. These individuals are then allowed access to common areas, but must pay for upkeep of those common areas. This type of ownership structure is common in major metropolitan areas.
Why You Need a Lawyer
If you are considering purchasing land or selling land, it is important to know what your options are for categories of land ownership. You can bargain certain types of land ownership to increase or decrease the costs of ownership. Knowing your specific needs and outlining those needs can help you acquire the type of land ownership best for you. The categories above are not an exhaustive list of types of ownership.