Classification of estate interest Flashcards
A fee simple absolute is
An outright ownership of the property by the grantee and grantee’s heirs
-cannot be divested
What are the types of present interest?
- Fee
- Life
- Term
the following words are needed to create a fee simple absolute
A conveyance is presumed to be fee simple absolute (e.g. from A to B)
A defeasible fee estate is:
A fee estate that can terminate upon the happening of some event
A determinable estate is created by
When the grantor uses durational language
e.g. until, while, so long as
How does a determinable estate terminate?
A determinable estate terminates automatically on the happening of a named future event
A Fee Simple Subject to a Condition Subsequent can be created when?
When the grantor uses conditional language
e.g. on condition, provided, but if
If language is ambiguous for defeasible estates, then treat as
Fee Simple Subject to a Condition Subsequent
Fee Simple Subject to Executory Interest Can be created by?
Conditional language or durational
If the condition or duration happens, then reverts to a third party
What is a Fee Tail? Legality?
Attempt to limit ownership of property to lineal descendents
-void
How to read: A to B and the heirs of his body?
A to B
-fee tails are void; gives in fee simple absolute
A life estate lasts:
estate that lasts for the duration of someone’s life
A life estate pur autre vie is:
when someone other than the grantee is the measuring life
If tied to multiple people, both must die before reversion
“A to B for the life of C.”
If B dies before C, it becomes part of B’s estate and will continue so long as C is still alive.
Defeasibility of life estate
Life estates can be made defeasible.
A term estate is:
When someone owes a property that is not determined by the length of someone’s life
Example: “A to B for 50 years.” “A to B for 1 year.”
A possibility of reverter is:
The future interest created whenever the grantor creates fee simple determinable
(durational language) –> automatically created
If grantor uses durational language, upon the happening event what happens
Automatically reverts back to grantor
Future interest in prop can go where
2
- To grantor
2. To third party
Type of future interest grantor can have
3
- Possibility of Reverter
- Right of Entry/Power of Termination
- Reversion
Type of future interest a third party can have
2
- Executory interest
2. Remainder
Transferability of possibility of reverter?
Freely transferable
A right of reentry(power of termination) is:
the future interest that can be created in the grantor when the grantor attempts to create a fee simple to a condition subsequent
How to create a right of reentry?
Has to be spelled out right of re-entry in the conveyance or it does not exist
(becomes a fee simple if there is just the condition)
EXAMPLE: “A to B provided that B uses the premises for residential purposes.” If B ever stops using the premises for residential purposes, A or A’s heirs can enter and retake the property.
Difference between right of reentry and possibility of reverter
Has to be spelled out v. automatically created
How to enforce a right of reentry?
Upon the happening of the condition, the grantor has to exercise the right of reentry to take the property back from grantee
What happens when condition occurs in a fee simple to a condition subsequent when right of reentry is not spelled out?
The property cannot be taken; however, the grantor can file breach of contract claim for damages
A reversion is
≠ right of reentry and possibility of reverter
+
Any other situation where grantor leaves a gap in ownership of property
=
a future interest created in the grantor when they have not fully conveyed the property (fills in gaps)
An executory interest is:
a future interest created in favor of a third party that
cuts short*
the preceding estate before it would naturally have terminated
Every future interest that cuts a fee short will be?
an executory interest
A remainder is:
a future interest that follows
naturally*
the preceding estate
A Contingent Remainder is
any remainder that is not vested
An interest that could be taken away
EXAMPLE: “A to B for life, then to the oldest child of C then living.” Would be a contingent remainder. We don’t know who the oldest child is going to be until B dies. There is a condition precedent to that person taking—they must be alive when B dies.
A Vested Remainder is
2
An interest that cannot be taken away
- The remainder must be created in an ascertainable person
- There must not be any condition precedent other than termination of the preceding estate.
A vested remainder subject to condition subsequent or vested remainder subject to complete divestment is:
A vested remainder that could be lost entirely after the ascertainable person receives the property (condition on the vested remainder)
A vested remainder subject to open, sometimes called a vested subject to partial divestment, is:
Class gift situation
If the class is open, the more that come in diminish the ownership of the others.
How are class openings created?
A class is deemed to open the moment the class opens
- inter vivos conveyance = when it is made
- testamentary conveyance = when testator dies
Rights do not vest until the class is open
When does a class close?
class closes as soon as at least one member of the class comes into immediate possession of the land
EXAMPLE: “A to B for life, remainder to the children of C.” When B dies, C has two children living. Those two children would be entitled to take immediate possession of the property. This would close the class. If any other children of C are born after that point, they are shut out of the class.
Rule of Convenience
a class closes as soon as at least one member of the class comes into immediate possession of the land
-if there is a potential member that is alive but has to satisfy a condition precedent to join the class, they are allowed to do so even after the class is closed
EXAMPLE: “A to B for life, then to the children of C who reach the age of 25.” At B’s death, C has two children: one is 30 and one is 20. A year after B dies, another child is born to C. 30 year old has a vested remainder—ascertainable, over the age of 25—and can go into immediate possession. This closes the class. Any child who is alive but has not satisfied the condition may try to do so. If the 20 year old reaches 25, he will join the class. The child born a year after B died is shut out.
Doctrine of Worthier Title
“A to B for life, remainder to A’s heirs.” Whether or not A included “remainder to A’s heirs,” the property would have gone to A’s heirs via a reversion. Should pass by descent rather than the devise.
Do not include “remainder to A’s heirs” to effectuate the transfer to A’s heirs, just have a descent ransfer
Waste determines
what someone who owns land can or cannot do with it
When is an owner of property prohibited from committing waste?
when they are someone who has less than a fee estate
term, life
Voluntary Waste
Volitional Act
a tenant cannot intentionally or negligently damage property attached to it that would damage a later interest
Permissive Waste
The life tenant must take reasonable steps to guard against damage the property, when they fail to do so and damage results, this is permissive waste.
Failure to act
Three types of waste?
- Voluntary waste
- Permissive Waste
- Ameliorative waste
What is Ameliorative waste?
the tenant makes improvements to the land
- common law: tenant could be sued to return to original condition
- modern law: tenant allowed
Modern law allows ameliorative waste if?
3
Allowed
1. market value of the property is not impaired
+ either
2. permission of remainder man; or,
3. change to neighborhood that justifies improvement
Who has standing to sue for waste?
holder of a remainder
For waste, A vested remainderman can sue for?
- damages; and, or,
2. injunction to stop future waste
For waste, a contingent remainderman can sue for?
only an injunction to stop future waste
A total restraint on alienation is?
if you try to sell property, then you lose the property
A total restraint on a fee?
A total restraint on less than a fee?
On a fee is void
If less than a fee, will be upheld if reasonable
A partial restraint on alienation is?
2
- purchase option
- right of first refusal
Both are valid if reasonable under the circumstances
rule against perpetuities only applies to?
5
(1) Does not apply to present estates.
(2) Only applies to three future interests:
(a) executory interest
(b) contingent remainder
(c) vested remainder subject to open
(3) Two other interests are subject to the rule:
(a) purchase option
(b) right of first refusal
(4) All other future interests are exempt.
What to examine in rule against perpetutities analysis?
At the time of creation, is there a possibility?
If rule against perpetutities applies, what is the analysis?
Can I create an interpretation under the facts that someone can be claiming under one of those interests more than 21 years after everyone currently alive is dead?
What happens when rule against perpetutities wipes out an interest?
Read the conveyance omitting the voided interest
Joint tenancy is
a form of concurrent ownership, where each co-tenant owns an
undivided interest in the whole of the property
+
has a right of survivorship.
Tenancy in common is
common is a form of concurrent ownership, where each co-tenant owns an
undivided interest in the whole of the property.
Key difference between joint tenancy and tenancy in common?
Joint tenancy creates a right of survivorship
Any conveyance to two or more people is presumed to create what unless specifically stated otherwise?
Common law?
Majority?
Common Law: Joint Tenancy
Majority: Tenancy in common
How to specifically state otherwise that a conveyance to two or more people is a joint tenancy?
- with the right of survivorship
- as joint tenants
The right of survivorship says that:
upon the death of joint tenant, the property automatically transfers to the remaining joint tenant(s)
What wins:
right of survivorship v. will
right of survivorship > will
How to create a joint tenancy?
2
unity of interest: each joint tenant must have an equal ownership interest in the property
unity of possession: each joint tenant must have the equal right to possess the entire parcel
How to create a tenancy in common?
unity of possession: each tenant in common must have the equal right to possess the entire parcel
Main differences between joint tenancy and tenancy in common
2
JT
- has right of survivorship
- each JT must have = interest
Tenancy by the Entirety is
a joint tenancy only between a husband and a wife
What happens to tenancy by entirety in event of divorce?
Severs the JT and becomes tenancy in common
How to sever a joint tenancy?
3
Done by an inter vivos act of one of the parties.
- partition action to court to create tenancy in common
- contracting to sell interest in property
- if joint tenant mortgages their interest in land
What happens when a joint tenancy is severed?
becomes a tenancy in common
What happens when a joint tenant contracts to sell interest in a property or mortgages the property?
Joint tenancy remains intact between remaining joint tenants
+
Interest sold is held as a tenancy in common between all parties
if joint tenant mortgages their interest in land, what happens
(lien theory v. title theory)
Transferring a lien on property will not severe tenancy
Transferring a title on property will severe tenancy
Rights and Duties of Co-Tenants
- Each co-tenant is entitled to possess the whole property.
- Profits
- Expenses
If a co-tenant is denied such whole property possession, what can they do
can sue for damages or ejectment
If profits produced by one of the co-tenant’s efforts, then how is it split
stays with the co-tenant who earned it; unless, co-tenant prevented the other from entering the land –> then owed a share
If profits generated by what a third party is doing with the property (rent), what is split to co-tenant?
pro rata share of rent
What is a co-tenant’s liability to taxes/mortgage payments?
pro rata share of taxes/mortgage payments
-the one who is in primary occupation has primary obligation
What is a co-tenant’s liability for repairs?
There is no duty of repair placed upon a co-tenant
- it is at their own expense and cannot put on co-tenants
- if rented, can offset repairs against third-party rents before the pro-rata distribution
What is a co-tenant’s liability for improvements?
There is no duty of improvement placed upon a co-tenant
-however, if the improvement creates increased sale price + sold then, increase goes to co-tenant
How can a tenancy at will be terminated?
- landlord conveying interest;
- death of either party
- landlord leasing property to someone else
- tenant causing place to fall into disrepair
