Estates in Land / Concurrent Estates / Leasehold Est.

Question 1

A future interest held by a grantor after a fee simple determinable is a _________; a future interest held by a grantor after a fee simple subject to a condition subsequent is a _________.

Answer 1

possibility of reverter, right of entry

Question 2

A future interest in a third party that divests a prior vested interest in a grantor is a ____________.

A future interest in a third party that divests a prior vested interest in a grantee is a __________.

Answer 2

springing executory interest

shifting executory interest

Question 3

Rule Against Perpetuities (RAP) does not apply to _________?

Answer 3

Life Estates

Question 4

When is a future interest devised by a will created?

Answer 4

At the testator’s death

Question 5

If a portion of a transfer is found to violate the Rule Against Perpetuities, how will courts treat the transfer?

Answer 5

The portion of the transfer that violates the rule is void, and the rest is valid.

Question 6

Which doctrine or rule closes a class so the Rule Against Perpetuities does NOT apply?

Answer 6

Rule of Convenience

Question 7

What is the name of the most common modern approach that has replaced the traditional Rule Against Perpetuities?

Answer 7

The “wait and see” approach

Question 8

If two tenants hold a tenancy in common, the co-tenant with a 1/3 share has the right to possess _____ of the property.

Answer 8

All

Question 9

Does a A co-tenant have the right to collect contribution from other co-tenants for paying more than his portion of operating expenses?

Answer 9

NO.

A co-tenant does not have the right to collect contribution from other co-tenants for paying more than his portion of operating expenses.

Question 10

Do tenants in common as well as joint tenants generally have a right to compel partition?

Answer 10

YES.

Tenants in common as well as joint tenants generally have a right to compel partition.

Question 11

The Rule Against Perpetuities (RAP) applies only to ________________________?

Answer 11

The Rule Against Perpetuities (RAP) applies only to contingent future interests—ie, future interests that are held by unknown/unborn persons or subject to a condition precedent–and voids any such interest that may not vest for more than 21 years after some relevant life in being at the creation of the interest.

Question 12

RAP - Does it apply to Powers of Appointment?

What do powers of appointment give a Life Tenant (LT)?

Answer 12

RAP does apply to powers of appointment, so the exercise of this power is valid only if a trust would vest or fail to vest by the end of the life in being plus 21 years.

The power of appointment gives a life tenant the right to designate recipients of a beneficial property interest. If the life tenant does not exercise this power, then the property will go to the designated remainderman.

The powerholder has the right to designate the recipients of a beneficial property interest (eg, trust). This power can be either:

• general – if there are no limitations on the disposition of the property OR
• non-general – if there are limitations on the disposition of the property (eg, restrictions on the recipients, time, or manner of the disposition)

Question 13

RAP (visual)

Answer 13

Question 14

Is a right of first refusal subject to RAP? If so, why?

Answer 14

A right of first refusal is a contractual right to purchase property before any other person if the owner later decides to sell. As a result, it is a contingent future interest that is subject to the Rule Against Perpetuities (RAP).

RAP renders such interests void if there is any possibility that they could vest more than 21 years after some relevant life in being at the creation of the interest.

Therefore, rights of first refusal almost always violate RAP if they are not set to terminate—either temporally (eg, calendar date) or by referencing a life in being (eg, within 21 years of the grantee’s death)—within the perpetuities period.

Question 15

Consent b/w Co-Tenants in Common (visual)

Answer 15

Question 16

Tenancy in Common

Answer 16

Tenancy in common is concurrent ownership of land where each co-tenant has a share of the property but an equal right to possess the whole property (ie, separate but undivided interests).

A co-tenant may transfer his/her own interest without the other co-tenants’ consent.

However, a co-tenant cannot transfer other co-tenants’ interests or bind them under a contract affecting the property (eg, a boundary-line agreement).

Question 17

Can a co-tenant in common bind another co-tenant to a K affecting the shared property (i.e., boundary line agreement)?

Answer 17

NO.

Although a tenant in common may freely transfer his/her interest to a third party, that tenant cannot transfer another co-tenant’s interest or bind another co-tenant to a contract affecting the shared property.

Question 18

Fee Simple Estates (visual)

Answer 18

Question 19

What is required to be catergorized as a freehold estate?

Answer 19

To be categorized as a freehold (eg, life estates, estates in fee), an estate must be immobile (eg, land, fixtures) AND last for an indeterminate duration (eg, for the life of X).

In contrast, a leasehold is an immobile estate that lasts for a limited duration (eg, 15 years).

Question 20

Can a co-tenant of a tenancy in common bring an action to partition?

Answer 20

YES.

A co-tenant may bring an action to partition (ie, divide) the property and, absent an agreement to the contrary, a court must grant that request.

There are two types of partition:

1) In kind – physical division of the property into distinct lots that are proportionate to each co-tenant’s ownership interest

2) By sale – forced sale of the property where the proceeds are divided in accordance with each co-tenant’s ownership interest

Partition in kind is the preferred method of partition. But when physical division of the land is impossible, impracticable, or inequitable, a court will grant a partition by sale.

Question 21

Joint Tenancy with ROS (visual)

Answer 21

Question 22

Does a joint tenant of a JTROS have an interest to devise upon death?

Answer 22

NO.

A joint tenancy is a type of concurrent estate in which each co-tenant has an undivided and equal interest in the property with the right of survivorship.

The right of survivorship means that a joint tenant’s interest disappears upon his/her death and the remaining joint tenants’ interests automatically expand to absorb it. Therefore, a joint tenant has no interest to devise upon death.

A joint tenant’s interest disappears upon his/her death and the remaining joint tenants’ interests automatically expand to absorb it (ie, right of survivorship). Therefore, a joint tenancy interest cannot be devised.

Question 23

Is a life estate freely transferable?

Answer 23

Yes.

But since it is followed by a future interest that will become possessory once the life estate terminates, the life tenant has a duty to prevent waste.

Question 24

A fee simple determinable is following by what future interests?

Answer 24

An FSD is followed by either:

1) a possibility of reverter – when the estate automatically reverts back to the grantor upon the happening of the specified event (presumed if not expressly stated) or
2) an executory interest – when the estate automatically passes to a third party upon the happening of the specified event (must be expressly stated).

Both these future interests are freely transferable during life, devisable by will, and descendible by inheritance.

Question 25

May a court require an accounting if one co-tenant appears to be indebted to the other?

Answer 25

YES

Co-tenants in common must proportionately share their rights (eg, receiving rent) and duties (eg, paying property taxes, mortgage, agreed improvement costs).

A court must grant a co-tenant’s request to partition (ie, divide) the co-tenancy and may require an accounting when one co-tenant seems to be indebted to the other.

Question 26

What happens to a judgment lien that is filed on a deceased tenant’s property interest?

Answer 26

Under a joint tenancy, a deceased tenant’s property interest disappears and is absorbed by the surviving tenants due to the right of survivorship. As a result, a judgment lien on the deceased tenant’s interest also disappears.

Question 27

Co-Tenant’s Rights & Duties

Answer 27

1. Possession — each co-tenant has rights to possess the whole
2. Rent and profits — a tenant is not required to pay rent or reimburse co-tenants for tenant’s use of land
   * But each co-tenant has a right to share in rents from third parties and profits derived from use of land that depletes its value (e.g., timber, oil and gas, mining, etc.)
3. Adverse possession — tenants may not acquire title to the exclusion of co-tenants through adverse possession
4. Carrying costs — each tenant is responsible for his fair share of taxes, interest, etc.
5. Repairs — co-tenants may seek contribution for reasonable repairs, but must inform co-tenants before making repairs
6. Improvements — no right to contribution for improvements; but co-tenants are entitled to credit for an increase in value attributable to the improvement (and also liable for any resulting loss)
7. Waste — a co-tenant can bring an action for waste against another co-tenant during the life of the tenancy
8. Partition/sale — tenants may seek judicial partition; if property cannot be divided, permitted to sell and apportion the proceeds
   * Tenants can agree not to partition, but only for a limited time

Question 28

Effect of lifetime transfer & death on JTROS (visual)

Answer 28

Question 29

What are the 4 leasehold estates?

Answer 29

An estate in which the tenant has a present possessory property interest and the landlord has a future interest (reversion)

1) Tenancy for years

• Lasts for a fixed period of time
• Requires a definitive beginning and end date
• If duration is longer than one year, lease must be in writing (required under SoF)
• Terminates automatically at the end of the fixed period
  
  • No notice is required
• Also referred to as “estate for years,” “term for years,” or “fixed term tenancy”

2) Periodic tenancy
* Tenancy estate that repeats until terminated
3) Tenancy at will
* Either party can terminate at any time without notice
4) Tenancy at sufferance
* Tenant has possession by virtue of wrongfully remaining after termination of a lease (holdover tenant)

Question 30

Perodic Tenancy

Answer 30

A leasehold that is continuous for successive intervals (e.g., weeks or months) until either party gives notice of termination

Creation — can be express, implied, or by operation of law

• Express agreement — conveyed to tenant for agreed interval
• Implication — a lease that does not specify duration, but provides for rent to be paid at set intervals
• Operation of law — two situations:

1) Invalid lease — if tenant takes possession despite an invalid lease (e.g., lease violates SoF), periodic tenancy arises upon landlord’s acceptance of payment

• Period of the tenancy is determined by the period the payment covers

2) Holdover tenant — if landlord accepts rent from a holdover tenant, a periodic tenancy arises for the period the payment covers

Termination — tenant must give proper notice, which requires:

1) Sufficient time — tenant must give notice one full period in advance; year-to-year tenancies require six-month notice

2) Effective date — effective date of termination must be at the end of the period of the tenancy

• Note — parties can agree to modify these requirements

Question 31

1) Which leasehold estates require an express agreement to be created?
2) Which leasehold estates require notice of termination?

Answer 31

1) The leasehold estates that require an express agreement are:

• Tenancy for Years
  
  • ​The SOF applies to a tenancy for years that is longer than one year.
  • No notice required for termination
• Perodic Tenancy*
  
  • *(can be express, implied, or by operation of law)
• Tenancy at Will
  
  • without an express agreement courts treat the lease as an implied perodic tenancy
  • ​Terminable by either party at any time without notice

2) The leasehold estates that require an notice for termination are:

• Periodic Tenancy
  
  • Tenant must give proper notice of termination, which requires:
    
    • Sufficient time — tenant must give notice one full period in advance; year-to-year tenancies require six-month notice
    • Effective date — effective date of termination must be at the end of the period of the tenancy

Note — parties can agree to modify these requirements

Question 32

Cy pres Doctrine - RAP

Answer 32

n a few jurisdictions, the cy pres doctrine allows a court to reform a conveyance to come as close as possible to the grantor’s intent while staying within the bounds of the Rule Against Perpetuities—eg, by reducing the time limit for a future interest to vest to 21 years after the end of the last life in being when the interest was created.

Question 33

Under common law, the Rule in Shelley’s Case applies when an instrument grants:

Answer 33

Under the common law, the Rule in Shelley’s Case applies when an instrument grants:

1) a freehold estate (eg, life estate) to a person

AND

2) a remainder to the same person’s heirs or the heirs of that person’s body.

When this occurs, that person is considered to hold the freehold estate AND the remainder, so the person’s heirs take nothing under the granting instrument.

And if there is no intervening interest, then under the doctrine of merger, the freehold estate and the remainder merge so that the person takes in fee simple absolute (FSA).

Question 34

Are remainders–whether vested or contingent–fully transferable during grantee’s lifetime, devisable by will, and inheritable through intestate succession?

Answer 34

YES.

Remainders–whether vested or contingent–are fully transferable during grantee’s lifetime, devisable by will, and inheritable through intestate succession.

*At common law and in a minority of jurisdictions, contingent remainders are not transferable during the grantee’s lifetime.

Question 35

Life Tenant’s Duties

Answer 35

Duty to pay current charges

• Life tenant must pay all current charges due during life tenancy (eg, property taxes, mortgage interest) up to financial benefit received from property
• But this duty is limited to the financial benefit that the life tenant receives from the property.
  
  • Therefore, there is no duty to pay these charges if the life tenant is not in possession of the property and does not receive rent or other income from the property.

Duty to prevent waste

• Life tenant must prevent affirmative waste (ie, voluntary waste), permissive waste & ameliorative waste

Duty to make ordinary repairs

• Life tenant must make reasonable repairs to preserve property

Question 36

To create a joint tenancy, the property must be conveyed with the express intent to create survivorship rights and four unities must coexist (PITT):

What happens if not all of the four unities exist?

Answer 36

To create a joint tenancy, the property must be conveyed with the express intent to create survivorship rights and four unities must coexist (PITT):

Possession – tenants share an equal right to possess or use the property

Interest – tenants have an equal interest in the property

Time – property interests simultaneously vest in all tenants

Title – property interests received in the same instrument of conveyance

A conveyance that meets some but not all of these requirements creates a tenancy in common, in which each tenant has an equal right to possess the entire property but no survivorship rights. As a result, a tenant in common’s interest can be devised or inherited.

Question 37

RAP - Rule of Convenience

Answer 37

The Rule of Convenience closes class membership once any member of the class is entitled to immediate possession of a share in the class gift.

Said another way: The Rule of Convenience prevents the Rule Against Perpetuities from being applied to class gifts by closing class membership when any member of the class is entitled to immediate possession of a share in the class gift.

Question 38

Defeasible Life Estate

Answer 38

A defeasible life estate is a life estate that may be terminated upon the death of an individual OR by the occurrence of a stated event (e.g., “to my companion for life or until she vacates the premises”).

A defeasible life estate is followed by a reversion (if the estate reverts to the grantor) or an executory interest (if the estate passes to a third party).

These future interests may be transferred during life or upon death.

Question 39

Joint Tenancy w/ 4-Unities (essay answer format)

Answer 39

A joint tenancy exists when at least two people own property with the right of survivorship.

In addition to the right of survivorship, each joint tenant must have the four unities: the right to possess or use the property and equal interests which were created at the same time and in the same instrument.

• Possession, Interest, Time, Title (PITT)

The severance of joint tenancy may occur in several ways and converts it into a tenancy in common.

A joint tenant may grant a mortgage in his joint tenancy interest. In title theory states, which is the minority of states, the granting of a mortgage constitutes a transfer of title. A transfer of title severs the joint tenancy and converts it into a tenancy in common.

Question 40

Does the execution of a lease sever a joint tenancy?

Answer 40

There is a split among jurisdictions with respect to joint tenancies when one joint tenant leases his interest.

Some jurisdictions hold that the lease destroys the unity of interest and thus severs the joint tenancy, while other jurisdictions believe that the lease merely temporarily suspends the joint tenancy, which resumes upon expiration of the lease.

Question 41

Tenants in Common (essay answer from Themis re Tenant’s rights)

Answer 41

A tenancy in common exists when two or more co-owners have an equal right to possess property, but do not have a right of survivorship.

In that case each co-tenant holds an undivided interest with unrestricted rights to possess the whole property, regardless of the size of the co-tenant’s interest.

Each tenant can unilaterally transfer, devise, mortgage, or lease his interest to a third party, without affecting the interest of the other tenants.

Question 42

In a Joint Tenancy, how is rent from 3rd parties handled? (themis essay Q)

Answer 42

A co-tenant must account to other co-tenants for rent received from third parties, but can deduct operating expenses, including necessary repairs, when calculating net proceeds.

Third-party rents are divided based on the ownership interest of each tenant.

If the execution of the lease did not sever the joint tenancy than the husband and wife own the property still as joint tenants. The third-party rent should therefore be divided equally between the two of them.

Question 43

What does a lifetime transfer of a joint tenant’s interest do to a JTROS?

Answer 43

A joint tenancy is a type of concurrent estate in which each co-tenant has an undivided and equal interest in the property with the right of survivorship.

A lifetime transfer of a joint tenant’s interest severs that interest from the joint tenancy relationship, and it becomes a tenancy-in-common ownership interest.

Question 44

Vested Remainders vs. Contingent Remainders

Answer 44

A remainder is a future interest that is capable of becoming possessory upon the expiration of a life estate or term of years. Remainders are either:

1) Vested

• Remainder not subject to condition precedent & held by identifiable living person
  
  • Example: “… remainder to A”

2) Contingent

• Remainder subject to condition precedent or held by unknown / unborn person
  
  • “… remainder to A, but only if A outlives B”
  • “… remainder to my heirs”

Question 45

Can remainders be given as a class gift to a group of unspecified persons whose number, identity, and share of the interest are determined in the future?

Answer 45

YES.

A remainder may be given as a class gift to a group of unspecified persons whose number, identity, and share of the interest are determined in the future.

If at least one but not all members of the class receive a vested remainder at the time of the conveyance, then that vested remainder is subject to open.

Additional members can be added once they satisfy the condition precedent. But absent a closing date, the rule of convenience closes the class once any member becomes entitled to immediate possession of the property.

Question 46

Is the right of entry alienable during life?

Answer 46

NO.

The right of entry is fully transferableupon death—meaning that it is devisable by will or descendible through intestate succession—but in most states it is not alienable during life.

Question 47

Is a FSSCS automatically terminated upon the occurrence of the stated condition?

Answer 47

NO.

Unlike a fee simple determinable, an FSSCS is not automatically terminated. Upon the occurrence of the stated condition, the FSSCS will terminate only if the holder of the right of entry (here, the coworker) affirmatively demonstrates an intent to terminate—e.g., by bringing an eviction action.

Question 48

RAP - Right of First Refusal

Answer 48

Rights of first refusal are generally subject to the Rule Against Perpetuities, so this contingent future interest is void if it there is any possibility that it could vest more than 21 years after some relevant life in being at the creation of the interest.

Question 49

When the holder of a life estate transfers their interest, the grantee receives a life estate measured by the life of whom?

Answer 49

When the holder of a life estate transfers that interest, the grantee receives a life estate measured by the life of the grantor.

Question 50

Does the rule of convenience apply when the grantor specifies that the class should remain open even though a member of the class is entitled to immediate possession of a share of the class gift?

Answer 50

NO.

Since the rule of convenience is a rule of interpretation, it does not apply when the grantor specifies that the class should remain open even though a member of the class is entitled to immediate possession of a share of the class gift.

Question 51

In a FSSCS that is limited by the specific conditional language “provided that” and has explicitly reatined the right of reentry, does the grantor waive his right to reentry by failing to assert it upon the occurnce of the condition?

Answer 51

NO.

The owner may waive this right, but the mere failure to assert it does not constitute a waiver

Question 52

Is an inter vivos transfer of a joint tenancy permitted?

Answer 52

YES.

Although it does severe the joint tenancy and creates a tenancy in common.

Question 53

What duties do co-tenants generally owe each other?

Answer 53

Although co-tenants owe a duty of fair dealing to each other, co-tenants generally do not owe fiduciary duties to each other.

However, a fiduciary obligation can be imposed on co-tenants who jointly purchase the property in reliance on each other or acquire their interests at the same time from a common source, such as by gift, will, or inheritance.

Typically, these co-tenants will be related or in a confidential relationship. The primary situation in which such a co-tenant is found to have a fiduciary obligation arises when the property is sold at a tax or mortgage foreclosure sale and a co-tenant acquires the property.

In such a situation, the other co-tenants have the right to reacquire their original interests by paying their due contributions within a reasonable time.

Question 54

Generally, does a co-tenant have the right to be reimbursed by other co-tenants for repairs made to the property, even when those repairs are necessary?

Answer 54

NO.

Co-tenants do not have the right to be reimbursed by other co-tenants for repairs made to the property, even when those repairs are necessary.

A co-tenant cannot compel other co-tenants to share in the expenses for repairs made to the property, UNLESS

(i) those repairs are necessary and
(ii) the co-tenant brings an action for accounting or partition.