The news was out last week that Hugh Hefner’s Playboy mansion was put up for sale for $200 million. The price is a reach, according to local Los Angeles brokers as the value is in the land at a third of the price. But, one hitch is along with the purchase you agree to allow Mr. Hefner live in the property for the remaining years of his life.
I am assuming this would mean he and his 29 year old wife Crystal Harris would most likely reserve rights to the entire property. It would be an interesting dynamic otherwise to have a buyer shacking up with the playboy and all that goes along with it.
Most likely what a buyer is agreeing to in the purchase is a life estate in favor of Mr. Hefner who becomes the life tenant. The life tenant relinquishes all control of the property and essentially can only use the property similar to that of a tenant.
I am uncertain why Mr. Hefner would sell with a life estate other than he may need the cash, but doesn’t want to give up the property. Perhaps he wants to avoid probate, but most people of his stature would have a separate entity or trust own the real estate.
This is a great segue into the introduction of the four categories of estates used in real estate title interests.
A freehold estate includes a fee simple estate, defeasible estate and finite estate. A fee simple estate is the most common that many of us have as it gives us the most rights to the real estate for an undetermined length of time. A defeasible estate places conditions that need to occur in order for the estate to continue, while a finite estate is for a specific period of time and includes a life estate because it remains while a person is alive.
A leasehold estate is created when you rent or lease your real estate. This would include a lease for a specific period of time (estate for years), a month-to-month lease (periodic estate), a lease for as long as we both agree to it (tenancy at will) and a lease that continues after your agreement expired (tenancy at sufferance).
A concurrent estate is an estate you would hold along with someone else. This would include a joint tenancy, tenancy in common and a statutory estate. A statutory estate is one created by law such as community property or homestead.
Finally, an equitable estate does not give you any ownership or possession rights, but rather an interest in. This would include future interests such as a gift or trust, incorporeal interest such as the right to a property you may have through an easement and lastly, a lien.
Coming in close to 22,000 square feet if you ended up purchasing the mansion you could negotiate a way to share the house with Mr. Hefner and his wife, but you probably wouldn’t be able to keep up with him and his partying for very long.
Photo: Public Domain