Estates in Land and Future Interests

Question 1

What is a right of first refusal?

Answer 1

It gives the holder of the right the first chance at buying the land when the owner sells it. It is not an invalid restraint on alienation.

Question 2

How is a fee simple absolute created?

Answer 2

It is presumed unless the language shows a clear intent to create another estate

Question 3

What is created here? “O to T and his heirs”

Answer 3

Fee simple absolute

Question 4

What is a defeasible fee estate? What are the types?

Answer 4

It is an estate in land that has the characteristics of a fee simple, but it might not last forever.

It includes:

1. Fee simple determinable (FSD)
2. Fee simple subject to condition subsequent (FSSCS)
3. Fee simple subject to executory limitation (FSSEL)

Question 5

How is the FSD created?

Answer 5

Using durational words, like “so long as,” “during,” “while,” and “until.”

Question 6

How do the FSD and teh FSSCS end?

Answer 6

The FSD ends automatically and goes to the grantor, who holds the future interest

The FSSCS does not end automatically; the grantor, who holds the future interest, must take steps to re-enter and reclaim the land

Question 7

How is the FSSCS created?

Answer 7

Using words that are conditional, like “but if,” “provided,” “however,” and “upon condition that.”

The grantor must carve out the right of reentry. The failure to do so results in the condition being ignored.

Example: “to A, but if X event happens, grantor reserves the right to reenter and retake.”

Question 8

How does the FSSEL end?

Answer 8

Automatically upon the happening of some condition; possession passes to the grantee holding the future interest rather than the grantor

Question 9

How is a life estate created?

Answer 9

It is created by express language (usually “for life”) or by implication

Question 10

What happens if a life tenant dies before the measuring life dies?

Answer 10

The life estate passes to the life tenant’s estate until the measuring life dies

Question 11

What are the rights and duties of a life tenant?

Answer 11

A life tenant must only maintain the estate – that means continuing the normal use of the land in its present condition

Anything more ore less than merely maintaining the estate = waste

Question 12

What is voluntary waste?

Answer 12

Any affirmative act beyond the right of maintenance that causes harm to the premises; any change from the normal use

Question 13

To whom is a life tenant liable if he commits waste?

Answer 13

The holder of the future interest

Question 14

What is the open mines doctrine?

Answer 14

Depletion of natural resources is waste unless the normal use of the land was to deplete them. The sale of crops grown on the land is not waste.

Question 15

What is permissive waste and how does a life tenant avoid it?

Answer 15

Permissive waste is where a tenant has failed to maintain the estate (inaction)

To avoid permissive waste, life tenant must:

1. Make ordinary repairs (not improvements or replacements)
2. Pay all taxes on the property
3. Pay the interest on the mortgage of the entire property

*Limited to the amount of income received by the land or the reasonable rental value of the land

Question 16

What is ameliorative waste and when is it allowed?

Answer 16

Ameliorative waste is a type of voluntary waste that occurs when the affirmative act alters the property substantially but increases the value of it

A life tenant can only demolish or substantially alter a property if:

1. Market value is not diminished
2. Remaindermen don’t object; OR
3. Substantial or permanent conditions deprived property of value/usefulness

Question 17

What is the grantor’s interest in a FSD?

Answer 17

Possibility of reverter

Question 18

What is the grantor’s interest in a FSSCS?

Answer 18

Right of entry/power of termination

Question 19

What is a reversion?

Answer 19

The interest kept by the grantor when the grantor gives a grantee less than the durational estate the grantor had

Question 20

What is the difference between a vested and a contingent remainder?

Answer 20

Vested remainder is certain, while contingent remainder is a possibility

Question 21

What happens when the language creating a FSSCS is ambiguous?

Example: “To X for the purpose of building a gym”

Answer 21

It will be construed to create a covenant rather than a condition, because forfeiture of title is not favoreed under the law

Question 22

What is required for a vested remainder?

Answer 22

1. Ascertainable holder of interest
2. No express condition precedent

Question 23

What is a vested remainder subject to open?

Answer 23

1. There is no condition to be satisfied before taking possession
2. Conveyed to a class of people
3. The size of the taker’s share is unknown because class remains open and future persons may qualify as members of the class

It is also called a vested remainder subject to partial divestment

Question 24

How do we determine when a class has closed?

Answer 24

Rule of convenience: a class closes when any member can demand possession

Question 25

What is the womb rule?

Answer 25

An exception to the rule of convenience

A member of the class who is in gestation will share with his the other class members (e.g. his siblings)

Question 26

What is a contingent remainder?

Answer 26

Something has to happen or be known before the remainder can be possessory

Examples:

1. Condition
2. Grantee not in existence
3. Identity of exact taker unknown

Question 27

When, if at all, do vested and contingent remainders become possessory?

Answer 27

Upon the natural expiration of the estates coming before them

They never affect the estate that comes before

Question 28

What are the characteristics executory interest?

Answer 28

• Future interest in a grantee
• Operates to divest or cut short the estate that comes before it (does not come into possession at the natural expiration of the earlier estate)
• NOT a remainder
• Holder of the interest can’t sue life tenant for waste

Question 29

Shifting vs springing executory interest

Answer 29

Shifting: an executory interest which operates by taking title from one grantee to another grantee

Springing: an executory interest which operates by taking title from the grantor and giving it to the grantee

Question 30

To which future interests does RAP apply?

Answer 30

1. Contingent remainders
2. Executory interests
3. Vested remainders subject to open

Question 31

What is the rule against perpetuitues? (State it)

Answer 31

No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest

Question 32

What is the likely result when an interest is executory and is about how the land is used?

Answer 32

The grant is typically void

Question 33

How does RAP affect future interests in the grantor?

Answer 33

It doesn’t. Future interests in the grantor will not be void no matter hwo long it might take for the property to go back to the grantor.

Question 34

At what time is the validity of a grant determined under RAP?

Answer 34

If by deed, look to the time of conveyance

If by will, look to the time of the testator’s death

Question 35

What is the problem of the fertile octogenarian?

Answer 35

Anyone, regardless of age, is capable of having purposes children for the purposes of RAP

Question 36

What is the key exception to RAP?

Answer 36

Charity-to-charity (BOTH grantees must be charities)