Estates in Land and Future Interests Flashcards
What is a right of first refusal?
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.
How is a fee simple absolute created?
It is presumed unless the language shows a clear intent to create another estate
What is created here? “O to T and his heirs”
Fee simple absolute
What is a defeasible fee estate? What are the types?
It is an estate in land that has the characteristics of a fee simple, but it might not last forever.
It includes:
- Fee simple determinable (FSD)
- Fee simple subject to condition subsequent (FSSCS)
- Fee simple subject to executory limitation (FSSEL)
How is the FSD created?
Using durational words, like “so long as,” “during,” “while,” and “until.”
How do the FSD and teh FSSCS end?
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
How is the FSSCS created?
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.”
How does the FSSEL end?
Automatically upon the happening of some condition; possession passes to the grantee holding the future interest rather than the grantor
How is a life estate created?
It is created by express language (usually “for life”) or by implication
What happens if a life tenant dies before the measuring life dies?
The life estate passes to the life tenant’s estate until the measuring life dies
What are the rights and duties of a life tenant?
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
What is voluntary waste?
Any affirmative act beyond the right of maintenance that causes harm to the premises; any change from the normal use
To whom is a life tenant liable if he commits waste?
The holder of the future interest
What is the open mines doctrine?
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.
What is permissive waste and how does a life tenant avoid it?
Permissive waste is where a tenant has failed to maintain the estate (inaction)
To avoid permissive waste, life tenant must:
- Make ordinary repairs (not improvements or replacements)
- Pay all taxes on the property
- 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
What is ameliorative waste and when is it allowed?
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:
- Market value is not diminished
- Remaindermen don’t object; OR
- Substantial or permanent conditions deprived property of value/usefulness
What is the grantor’s interest in a FSD?
Possibility of reverter
What is the grantor’s interest in a FSSCS?
Right of entry/power of termination
What is a reversion?
The interest kept by the grantor when the grantor gives a grantee less than the durational estate the grantor had
What is the difference between a vested and a contingent remainder?
Vested remainder is certain, while contingent remainder is a possibility
What happens when the language creating a FSSCS is ambiguous?
Example: “To X for the purpose of building a gym”
It will be construed to create a covenant rather than a condition, because forfeiture of title is not favoreed under the law
What is required for a vested remainder?
- Ascertainable holder of interest
- No express condition precedent
What is a vested remainder subject to open?
- There is no condition to be satisfied before taking possession
- Conveyed to a class of people
- 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
How do we determine when a class has closed?
Rule of convenience: a class closes when any member can demand possession
