(1) Property: Conveyance of Present/Future Interest

Question 1

Overview of Present/Future Interests

Answer 1

Present Interests
1. Fee Simple
2. Fee Simple Determinable
3. Fee Simple Condition Subsequent
4. Fee Simple Subject to Executory Interest (Shifting/Springing)
5. Fee Tail
6. Life Estate

Future Interest
1. Vested Remainder - Subject to Open
2. Vested Remainder - Subject to Complete Divestment
3. Contingent Remainder
4. Reverter
5. Right of Re-Entry
6. Reversion

Question 2

Fee Simple

Present Interest

Answer 2

(“and heirs”)

Fee simple is absolute ownership with no future interest. Under common law the words “and heirs” are required but not under the modern trend.

Question 3

Fee Simple Determinable

Answer 3

(“as long as, while, during”)
Definition: A fee simple determinable is a conditional conveyance that allows the grantor to retain a possibility of reverter.

Rule: It is created when the grantor uses words of duration in the conveyance to indicate that the interest being conveyed will automatically terminate if a specified condition occurs.

Question 4

Definition & Rule:

Fee Simple Subject to a Condition Subsequent

Present Interest

Answer 4

(“but if”)
Definition: A fee simple subject to a condition subsequent is a conditional conveyance that allows the grantor to retain a right of re-entry.

Rule: It is created when the conveyance expressly states that the interest being conveyed is subject to the grantors right of re-entry if a specified condition occurs.

Question 5

What happens when the event occurs under Fee Simple Condition Subsequent?

Present Interest

Answer 5

Nothing, if the condition occurs the grantees present interest in the property will be lost only if the grantor affirmatively exercises his right of re-entry and re-takes possession of the land.

Question 6

Definition & Rules

Fee Simple Subject to Executory Interest

Present Interest

Answer 6

Definition: A fee simple subject to an executory interest is a conditional conveyance of real property, in which a third-party will be entitled to the property upon the occurrence of a specified condition.

Rule: It is created when the grantor uses words such as “To person A, so long as (or but if) … to person Y”.

a. Shifting Executory Interest
Rule: A shifting executory interest is when the interest goes from grantee to grantee.

Ex. To B and his heirs but if C returns to Paris then to C.

b. Springing Executory Interest
Rule: Springing is when the interest goes from grantee to grantor to grantee.

Ex. To B for life and one year after B’s death to C and his heirs.

Question 7

Fee Tail

Present Interest

Answer 7

(“heirs of the body”)

A fee tail is when an estate can only be passed down to the grantees blood descendants. The fee fail has been eliminated in most states and is treated as fee simple.

Question 8

Life Estate

Present Interest

Answer 8

(“To A for life”)

A life estate is a present possessory estate that is limited in duration by the life of the grantee.

Question 9

Rights and Obligations of a Life Estate Tenant

Present Interest - Life Estate

Answer 9

A life tenant has the right of (a)possession, (b) the right to all rents and profits during possession, and (c) the right to lease, sell or mortgage their interest in the property (i.e., the right of alienation).

Question 10

Does the life tenant need to ensure the land benefits the remainderman?

Present Interest - Life Estate

Answer 10

NO, the life tenant is under no obligation to ensure the land benefits the remainderman.

Question 11

Is the life tenant responsible for damage caused by 3rd parties?

Present Interest - Life Estate

Answer 11

NO, the life tenant is not responsible for damage caused by 3rd parties.

Question 12

Who is responsible for the mortgage? And who is responsible for the interst of a mortgage?

Present Interest - Life Estate

Answer 12

The life tenant is responsible for the interest of a mortgage but the remainderman is responsible for the mortgage.

Question 13

Life Estate Pur Autre Vie

Present Interest - Life Estate

Answer 13

(“To B for the life of C”)

A life estate measured by the life of a 3rd party.

Question 14

Types of Remainders

Future Interests

Answer 14

1. Vested Remainder
2. Vested Remainder Subject to Open
3. Vested Remainder Subject to Complete Divestment
4. Contignent Reminader

Question 15

Vested Remainder

Future Interests

Answer 15

A vested remainder is an interest that is not subject to any conditions precedent and is created in an ascertainable grantee. “to B for life, then to C and his heirs.”

Question 16

Vested Remainder Subject to Open

Future Interests

Answer 16

A remainder to a class of grantees whose identity, share and number is determined in the future. However there must be one ascertainable class member. Those born after the class closes are not apart of the class. The class closes when any member of the class becomes entitled to immediate possession of the property.

Ex. Group of children at death of donor – “to my children”)

Ex. To B for life and then to B’s children as they turn 18”. B has 3 kids, 10, 15 and 20 – the property interest may be shared if the younger children turn 18)

Question 17

Vested Remainder Subject to Complete Divestment

Future Interests

Answer 17

There is one ascertainable grantee and the occurrence of a condition subsequent will completely divest the remainder interest.

Ex. To B for life and then to C but if C has no children then to D’s children. – C has a vested remainder interest but if he is not survived by his children at the time of B’s death then C’s interest will be divested

Question 18

Contingent Remainder

Future Interests

Answer 18

A remainder is contingent if it is created in a grantee that is unascertainable or if it is subject to an express condition precedent to a grantee’s taking.

Ex. “to B for life, remainder to C’s heirs.” If C is alive at the conveyance then C’s heirs are not yet ascertainable and the remainder is contingent.

Question 19

Reverter

Future Interests

Answer 19

A possibility of reverter is a future interest retained by the grantor when a fee simple determinable is conveyed. If such condition occurs, the present possessory interest in the grantee will automatically terminate and vest in the grantor.

Question 20

Right of Re-entry

Future Interests

Answer 20

A right of re-entry is a future interest retained by the grantor after a fee simple subject to a condition subsequent is granted, wherein the grantor has the right to re-enter and take the property if a specified condition occurs. The present interest is lost only if the grantor exercises the right it does not automatically terminate.

Question 21

Reversion

Future Interests

Answer 21

A reversion is the future interest held by the grantor after a life estate or estate for years when the future interest is not conveyed to a 3rd party. Reversions are not subject to the rule against perpetuities.

Question 22

Restraints on Alienation (Definition)

Future Interests

Answer 22

A restraint on alienation occurs when the grantor attempts to restrict the alienability or transferability of the land. 3 types of restraints exist: (1) disabling restrains – all transfers are void; (2) forfeiture restraints – land is forfeited if a transfer is attempted; AND (3) promissory restraints – an attempted transfer breaches a covenant.

Question 23

Enforcing Restrains

Future Interests

Answer 23

Restraints are enforceable based on (1) the interest conveyed; AND (2) whether the restraint is reasonable.

A restrain is reasonable if the restraint lasts for a specific period of time or concerns the appearance or purpose of the land.

All absolute restrictions on alienation or transferability on fee simple estates are void and unenforceable.

Question 24

Rule of Perpetuities

Future Interests

Answer 24

A specific future interest is only valid if it vest by the end of a living being plus 21 years.

The court is against restricting property interest, if it falls outside of the rule of perpetuities, the court will rule against it.

Question 25

When does the Rule of Perpetuities not Apply?

Future Interests

Answer 25

Doesn’t apply to future interests which revert to the grantor.