Estate System Flashcards
What are the types of present possessory estates?
- Freehold estates
- Life Estates
- Non-freehold estates
What are the types of Freehold Estates?
- Fee Simple Absolute
- Defeasible Estates
- Fee tails
What is a free simple absolute?
A fee simple absolute is the best type of estate, in which a holder has all possible rights that a person may have in a parcel of land
How is a fee simple estate created?
“To A and their heirs” or “To A”
What is a defeasible Estate?
A defeasible estate is an estate that may terminate upon some happening or event before its maximum duration has run
What are the types of defeasible estates?
- Fee simple determinable
- Fee simple subject to condition subsequent
- Fee simple subject to executory interest
What is a fee simple determinable estate?
An estate that terminates automatically on the happening of a named future event and automatically reverts back to the grantor
What happens to a fee simple determinable upon the occurrence of a named future event?
The estate returns to the grantor
How is a fee simple determinable created?
A FSD is created by durational language “for so long as” “during” “until” or “while”
What is a fee simple subject to condition subsequent?
An estate that MAY terminate on the happening of a named future event and grantor MAY choose to re-enter
How is a fee simple subject to condition subsequent created?
FSSCS is created through conditional language as to the occurrence of a condition that will terminate the estate, with the power of termination expressly reserved to the grantor.
May include language like “provided however,” “however if” “on condition that” “in the event that”
What is the difference between a fee simple determinable and a fee simple subject to condition subsequent?
A FSD automatically terminates upon the occurrence of a named condition, a FSSCS may terminate upon the will of the grantor, who retains right of re-entry, but doesn’t necessarily HAVE to terminate
What is fee simple subject to executory interest?
An estate where termination occurs on the happening of an event that terminates the estate, with property passing to a third party other than the grantor
How is a fee simple subject to executor interest created?
My be created using either conditional or duration language, and will specify the third party executory interest
What is a fee tail?
Common law: an estate that descended to a grantee’s children only
Modern law: fee tails are disfavored and instead treated as fee simple absolutes
What is a life estate
a life estate lasts for the duration of the grantee’s life, and can be made defeasible
What is a life estate pur autre vie
A life estate whose duration is measured by the life of someone other than the grantee
What is a non-freehold estate?
A term estate is a non-freehold estate that is limited in duration
What are the types of future interests?
- possibility of reverter
- power of termination / right of reentry
- reversionary interest
- remainder
- executory interest
What is the possibility of reverter
Possibility of reverter is a future interest in the grantor that follows a determinable estate
How is a possibility of reverter created?
Creation of a fee simple determinable automatically creates a possibility of reverter - no special language
Are possibilities of reverter transferable?
Under majority modern law, rights of reverter are freely transferable, devisable and descendible
What is power of termination?
Power of termination or right of reentry is a future interest in the grantor when the grantor attempts to create a fee simple subject to condition subsequent or a defeasible life estate
How is a right of reentry and power of termination created?
Grantor must specify in conveyance that upon the happening of an event the property won’t automatically revert, but instead grantor may exercise right of reentry and could take affirmative steps to retake the property
Are powers of termination / rights of reentry transferable?
Under modern majority the power of termination is descendible and devisable however, the power of termination cannot be transfered inter vivos
WHat is a reversionary Interest
A reversion is a future interest retained by the grantor when the grantor transfers less than a fee interest to a third person (e.g. what happens after a life estate)
How is a reversionary interest created?
Language the allows grantor to retain an interest, such as “A to B for 10 years”
Are reversionary interests transferable?
Under modern law a reversionary interest is freely transferable, devisable and descendible
What is a remainder?
A remainder is a future interest created in a third person that is intended to take effect after the natural termination of the proceeding estate
How is a remainder created?
With language specifying a third party who will inherit: “from A to B for life, then to C”
What are the types of remainders
- Contingent remainders
- Vested remainders
What is a contingent remainder?
A remainder that is not vested
What are the types of vested remainders?
- Vested remainder
- Vested remainder subject to total divestment
- Vested remainder subject to open
What are the requirements for a remainder to be vested?
A remainder is vested to the point that it is:
1. created in an ascertainable person
2. Not subject to any condition precedent, other than the termination of the preceding estate
What is a vested remainder subject to total divestment?
A remainder that is presently vested but may be terminated on the happening of a future event
How is a vested remainder subject to total divestment created?
“A to B for life, remainder to C, so long as liquor is never served on the premises”
What is vested remainder subject to open?
A remainder to a calss with at least one ascertainble member who has satisfied any conditions precedent to vesting, but where others may join the class later
When do classes open for purposes of vested remainders subject to open?
Inter vivos conveyances: classes open at the time of the conveyance
Testamentary conveyances: classes open at the death of the testator
When do classes close for the purposes of vested remainders subject to open?
Under the Rule of Convenience a class closes as soon as one member of the class becomes entitled to immediate possession of the property
What are the limitations regarding classes for vested remainders subject to open?
Classes are subject to Rule Against Perpetuities, such that if any member of a class could potentially claim in a way that violates the RAP, the entire class gift will fail
What does rule against perpetuities apply to vested interests?
RAP doesn’t generally apply to vested interests, except in the cases of vested remainders subject to open
What is the rule of convenience?
A class closes as soon as one member of the class becomes entitled to immediate possession of the property
What are executory interets?
An executory interest is a future interest in a third person that cuts short the previous estate before it would have naturally terminated
What are the types of executory interests?
- Shifting executory interest
- Springing executory interest
How is an executory interest created?
Any interest created in a third party that follows the granting of a fee
What is a shifting executory interest?
An executory interest that passes from one grantee to another
What is a springing executory interest?
An interest that transfers from a grantor to a grantee
Are executory interests subject to the Rule Against Perpetuities?
Yes
What are present interest holders obligations to future interest holders regarding their property?
Owners of a less than fee estate cannot commit waste by harming the property at the expense of the person who will hold it after them
What are the types of waste present estate holders may not commit?
- Voluntary waste
- Permissive waste
- Ameliorative waste
What is rule regarding voluntary waste and life tenants?
Life tenants cannot intentionally or negligently damage property and if they do they are liable for damage
What is rule regarding permissive waste and life tenants?
Life tenants must take reasonable steps to avoid damage and failure to do so constitutes permissive waste and the life tenant will be held liable
What is ameliorative waste as it pertains to life tenants?
Ameliorative waste is when a life tenant makes improvements to the land
What is rule regarding ameliorative waste and life tenants under common law?
Life tenants are not allowed to make substantial alterations unless authorized to do so, and life tenants could be liable for costs of restoring the land to its previous condition
What is modern law rule regarding a life tenant creating ameliorative waste?
A life tenant is allowed to commit ameliorative waste if:
1. market value of the remainderman’s interest is not impaired
2. changes are permitted by the remainderman
3. a substantial and permanent change in the neighborhood justifies the improvement
When do remaindermen have standing to sue for past or future waste?
Vested remaindermen: can sue for damages or an injunction to stop the waste from occurring
Contingent remainderment: cannot sue for damages and can only sue for an injunction to stop the waste from occurring
What can vested remainderman sue for regarding present interests committing waste on property
Damages or an injunction to stop the waste from occuring
What can contingent remaindermen sue for regarding present interests committing waste on proeprty?
Only an injunction to stop the waste from occuring
What is the rule against perpetuities?
An interest is invalid if it will not vest in a life in being plus twenty one years
What types of interests does rule against perpetuities apply to?
- executory interests
- contingent remainders
- remainders subject to open
- purchase options
- rights of first refusal
- powers of appointment
When will an interest stand as being valid regarding rule against perpetuities?
If it’s not possible to interpret the facts as someone claiming an interest more than 21 years after everyone currently alive is dead.
When will an interest be void against the rule against perpetuities?
If it’s possible to interpret the facts as someone being able to claim an interest more than 21 years after everyone currently alive is dead.
Are total restraints on alienation on a fee vallid?
Generally no
When are total restraints on alienation valid?
Total restraints on alienation are not preferred and will generally not be held valid on a fee, but may be upheld if reasonable on less than a fee
What are partial restraints on alienation
Purchase options and rights of first refusal
Are partial restraints on alienation valid?
Purchase options and rights of first refusal will both be valid if reasonable
