Freehold, and Non-Freehold Flashcards
Future Interest: Grantee’s Remainder
- FI on T (grantee)
- Takes naturally and immediately upon termination of preceding estates (patiently waits, NEVER affects precedent estate)
- NEVER follows defeasible fees: FSD, FSSCS, or fee simple, FSSEI
Types: vested or contingent
- Vested Remainder: ascertainable taker AND upon natural expiration of precedent estate AND no conditions precedent
- Vested Remainder subject to Open (*anti-lapse statutes apply): vested in group, one member is born/ascertainable, other members may be added, estate of already dead members lapse unless anti-lapse applies
- Rule of convenience closes class whenever ANY member is entitled to take, otherwise RAP issues
- Contingent Remainder: UNascertainable taker/unborn (e.g. “to X for life, then to Y’s children,” and Y has no children), OR subject to condition precedent (O keeps reversion to ensure there NO gaps in seisin if condition is not met and grantee fails to take)
If LE dies before grantee meets condition, prop goes back to O as FS subject to Springing Exec Interest in Grantee e.g. “to X for life, then to Y when Y reaches 21,” X dies and Y is only 18, O has FSSSEI until Y is 21
RAP
no interest is good unless it must vest, if at all, w/in 21yrs of after the death of the measuring life who was alive at the creation of the interest (moment of conveyance)
If any possibility that interest may vest after 21yrs, RAP voids interest even if interest can also vest w/in 21yrs
ALWAYS apply RAP to ECO:
- Exec Interests
Also apply RAP to ASSIGNABLE right of first refusal treated as EI (NOT to non-assignable)
- Contingent Remainders
- Vested Remainders Subject to Open (class gifts)
Exception: RAP does not apply to charity-to-charity transfer (both MUST be charities)
Perpetuities Savings Clause: saves grant by ensuring vesting w/in time period of RAP (e.g. “if act happens during lifetime, or w/in 21yrs after X dies, then to Y and his heirs.”)
Transfers by Will: apply RAP when O dies
Transfers by Deed: apply RAP when deed takes effect (cross-reference w/Wills and Trusts rules)
Types of Concurrent Estates
JT
TIC
Tenancy by the Entirety
- CA distribution at death and division upon divorce or separation follow Lucas case and anti-Lucas statutes
Life Estate
Life Estate: e.g. “to A” or “to A for life”
- LE pur autre vie: life estate measured by life of another e.g.: to X for the life of Y = X has LE measured by life of Y. Majority: if life tenant dies before measuring life, LE passes to estate of life tenant until LE ends
Law of Waste
Life tenant MUST maintain (continue normal use of land)
- Duty limited by max and min life tenant can do
Voluntary waste: affirmative action beyond maintenance that causes harm to prop.
- Liable to future interest
- Depletion of natural resources is waste unless consumption is normal use of land (open mines doctrine - NOT apply to crops)
Permissive waste: failure to maintain
- LTenant avoids liability: 1) repair (CANNOT replace), 2) pay taxes, 3) pay mortgage debt (interest only) BUT all three are limited to amount of profits received, if no profits received but using the prop then reasonable rental value, OR No duty if tenant receives no profits and does not use prop
- If taxes are not paid: future interest holder must pay or interest is eliminated at tax sale
Ameliorative waste: LTenant may substantially alter prop to increase prop value ONLY if conditions have changed rendering prop relatively worthless
JT
TTIP: four unities MUST be present at the outset. Language MUST be clear otherwise law favors TIC (e.g. “as JT w/RS” if anything else e.g. “jointly” then it’s TIC)
Time: all JT interests must vest at the SAME time
Title: grant is by the SAME instrument
Interest: JT take SAME kind and SAME amount of interest
Possession: JT must have SAME right of possession
Involuntary Severance: sale (conveyance), mortgage (Majority rule: lien theory does not sever, Minority rule: title theory severs title), Contract of Sale (on date K is signed), Creditor’s sale (only when judicial sale takes place, so if title passes to other JTs before judicial sale, creditors have no recourse)
- CA distribution at death and division upon divorce or separation follow Lucas case and anti-Lucas statutes
Future Interests in Grantee
Remainder: holder has standing to sue for waste
Exec Interest: holder has NO standing to sue for waste
Future Interest: O’s Possibility of Reverter
FSDPOR: POR goes ONLY w/a grant of a FSD (determines how long FS lasts)
- Terminates AUTOMATICALLY on occurrence of event
KEY WORDS: so long as, while, during, until
Tenancy by Entirety
Four Unities TTIP plus Unity of Marriage
NOT severable by one party
Terminated by: divorce, mutual agreement, execution by joint creditor
- CA division upon divorce or separation follow Lucas case and anti-Lucas statutes
Future Interest: O’s Reversion
DEFAULT when Grantor conveys less than full estate Grantor has
Reversion for life: LTenant conveys LE or less to grantee
Types of Future Interests retained by Grantor and Grantee
FI: interest exists now BUT possession takes place (if at all) in future
FI retained by Grantor: Reversion (when O conveys less than O’s full estate), Poss of Reverter (if FSD), Right of Re-Entry
- Not subject to RAP because vested, freely transferable on death (will), freely transferable inter vivos (deed) except for RoRE
FI retained by Grantee: Remainder (patiently waits), Exec Interest (cuts off preceding interests)
TIC
NO unities required EXCEPT unity of possession (co-tenants are entitled to: possession of whole and undivided 1/2 interest)
TIC is default: Language MUST be clear otherwise law favors TIC (e.g. “as JT w/RS” if anything else e.g. “jointly” then it’s TIC)
Freely alienable: co-T can devise, sale, etc
- CA distribution at death and division upon divorce or separation follow Lucas case and anti-Lucas statutes
Future Interest: O’s Right of Re-Entry
If O conveys FSSCS, then O keeps RoRE
KEY WORDS: provided, however; but if; on condition that
Freehold Estates
Fee simple: CL language must be clear. Modern FSA is presumed unless otherwise
- FSA: potentially lasts forever, MUST be fully alienable (no restrictions on alienation e.g. “if X tries to sell…” restrictions are voided
- Exception: rights of first refusal are OK
- Conditions are OK (e.g. “if X allows Y onto prop…”)
Life Estate: e.g. “to A” or “to A for life”
- LE pur autre vie
- Restraint on alienation OK e.g. “to X for life then to Y, but if X tries to sell then LE to Y”
Fee tail: lock prop into Grantee’s family e.g. “to A and heirs of his/her body”.
Modern law presumes FSA (apply unless exam says CL)
Incidents of co-tenancy: accountability, and contribution
For JT, TIC, and TbyE
Accountability: co-T does NOT have to account to other co-T for profits, EXCEPT: 1) Ouster: one co-T keeps other co-T off prop, 2) agreement to share, 3) lease of prop by co-T to Third Party
Contribution: duty to pay depends on expenditure
- Improvements OR non-necessary repairs: NO duty to pay BUT may be recouped from co-T later at sale of prop or partition
- Repairs: Yes but ONLY for necessary
- Mortgage: Yes if signed by all co-Ts
- Taxes: Yes
