Future Interests - Classifications of Reversions and Executory Interests

Question 2

In present estates, what is the default type?

Answer 2

Fee simple.

Question 3

A fee simple is created when…

Answer 3

A fee simple is created when the grantor uses the following language:

“O to A”
“O to A and his/her heirs”
“O to A forever”

Question 4

A defeasible fee is…

Answer 4

A defeasible fee is a conveyance in fee simple in which the grantor places express conditions on the conveyance

e.g., “O to A on the condition that . . .”

Question 5

Does a defeasible fee last forever?

Answer 5

A defeasible fee is capable of lasting forever, but may be terminated by the occurrence of an event.

Question 6

Who has the present possessory interest in a defeasible fee?

Answer 6

A defeasible fee gives the grantee a present possessory interest in the property.

Question 7

Who holds a future interest in a defeasible fee?

Answer 7

Depends on the language in the instrument. If spanish, then goes to a spanish person. JUUuuuuuust kiddding c’mon let’s have some fun here. Okay no but really what’s the rule?

A defeasible fee reserves a future interest in the property in the favor of the grantor or a third party.

Question 8

What are three main types of defeasible fees?

Answer 8

1. Fee simple determinable.
2. Fee Simple subject to condition subsequent
3. Fee simple subject to executory interest

Question 9

What is a fee simple determinable

Answer 9

A fee simple determinable is a conditional conveyance in which the grantor retains a possibility of reverter.

The possibility of reverter vests automatically when the condition is not met (i.e., the grantor does not have to reclaim the property, the interest automatically vests back to him).

A fee simple determinable is created when the grantor uses durational language, such as:
“While the property is used for farming”
“During the property’s use as a farm”
“Until the property is no longer used as a farm”

Question 10

Test Tip: what is the key for fee simple determinables?

Answer 10

DURATIONAL LANGUAGE:

“While the property is used for farming”
“During the property’s use as a farm”
“Until the property is no longer used as a farm”

Question 11

For fee simple determinable, does possibility of reverter vest automatically?

Answer 11

Yes, the possibility of reverter vests automatically when the condition is not met (i.e., the grantor does not have to reclaim the property, the interest automatically vests back to him).

Question 12

What is a fee simple subject to a condition subsequent?

Answer 12

A fee simple subject to condition subsequent is a conditional conveyance in which the grantor retains a right of entry. The right of entry does NOT vest automatically when the condition is not met (i.e., the grantor must reclaim the property). A fee simple subject to condition subsequent is created when the grantor uses conditional language, such as:
“Provided that the property is used for farming”
“On the condition that the property is used as a farm”

Question 13

For a FSSCS, does the right of reentry vest automatically?

Answer 13

No. The right of entry does NOT vest automatically when the condition is not met (i.e., the grantor must reclaim the property).

Question 14

Test Tip: what is the key to spotting FSSCS questions?

Answer 14

CONDITIONAL LANGUAGE, such as:

“Provided that the property is used for farming”
“On the condition that the property is used as a farm”

Question 15

What is a fee simple subject to an executory interest?

Answer 15

A fee simple subject to executory interest is a conditional conveyance in which a third party (not the grantor) is granted an executory interest in the property. An executory interest is a future interest that divests (i.e., terminates) an earlier interest.
For example:

“O conveys Greenacre to A and his heirs, but if Greenacre is no longer used as a farm, then to B and her heirs.” A has a fee simple subject to an executory interest. B has an executory interest, because B is a third party (not the grantor) and her interest divests A’s interest.

Question 16

MEE Tip: how do you spot a fee simple subject to an executory interest?

Answer 16

Look for a fee simple subject to a condition, but if the condition stops being met, there is a THIRD PARTY (not the grantor) who gets interest in the property.

eg, “O conveys Greenacre to A and his heirs, but if Greenacre is no longer used as a farm, then to B and her heirs.”
A has a fee simple subject to an executory interest. B has an executory interest, because B is a third party (not the grantor) and her interest divests A’s interest.

Question 17

Think quick, what kind of instrument is this: “A to B”

Answer 17

Fee simple

Question 18

Think quick, what kind of instrument is this: “A to B until B stops using land as farm”

Answer 18

Fee simple determinable

Question 19

Think quick, what kind of instrument is this: “A to B provided that B uses the land as a farm”

Answer 19

FSSCS

Question 20

Think quick, what kind of instrument is this: “A to B provided that B uses the land as a farm, and if not used as farm, then to C”

Answer 20

Fee simple subject to an executory interest

Question 21

Think quick, what kind of instrument is this: “A to B, until B stops using land as a farm, then to C”

Answer 21

Fee simple subject to an executory interest

Note: if they add the third party, then doesn’t matter if durational or conditional language, it’s a fee simple subject to an executory interest because doesn’t go back to grantor. BOOM.

Question 22

Springing vs. Shifting Executory Interest.

Answer 22

A springing executory interest divests the grantor, while a shifting executory interest divests a prior grantee.
“O conveys Greenacre to A and his heirs, but if Greenacre is no longer used as a farm, then to B and her heirs.” B has a shifting executory interest, because B’s interest divests A’s interest (prior grantee).

Question 23

MBE Tip: grantee executes deed that says, “to grantee to have and to hold the described tract of land in fee simple, subject to the understanding that within one year from the date of the instrument said grantee shall construct thereafter maintain and operate on said premises a public health center.”

What did grantor convey?

Answer 23

THIS IS FUCKED UP, so don’t get down on this. Just remember it and move on.

While this sounds an awwwwwwful lot like a FSD, courts dislike restraints on alienation, so if there is any question as to the interpretation of a conveyance, courts will favor a fee simple absolute over a defeasible fee. As a result, the grantee would be left with a fee simple absolute and a personal, contractual liability to use the property as instructed by the deed.

See Immauel MBE Q 51

Question 24

Do courts dislike restraints on alienation

Answer 24

Yes, yes they do. So if at all vague as to whether an FSD or FSSCS, then they’ll construe as fee simple apparently. See Immauel MBE Q 51

Question 25

What is the after-acquired title doctrine?

Answer 25

aka estoppel by deed

The grantor purports to convey an estate larger than the one he has; the grantor subsequently acquires the title he’s already purportedly conveyed; title automatically passes to grantee, by estoppel.