Future interests: defeasible fees Flashcards
Fee simple determinable
A fee simple determinable is an interest limited by specific durational language, e.g., “so long as,” “while,” and “during.”
The grantor retains a “possibility of reverter.”
Fee simple subject to condition subsequent
A fee simple subject to condition subsequent is limited by specific conditional language, e.g., “but if,” “provided that,” and “on the condition that.”
The grantor retains a “right of entry,” which must be exercised to be effective.
Fee simple subject to executory interest
Upon granting a fee simple subject to an executory interest, a grantor retains no interest in the property.
The holder’s interest may be divested by another grantee, who holds an “executory interest” on the occurrence of a condition.
Fee simple absolute: charitable trusts
A charitable trust is one with a stated charitable purpose made to benefit the community at large or a particular segment of the community. In a charitable trust, the beneficiaries must be reasonably numerous and unidentifiable.
But if the language of a conveyance limits only the purpose for which the property is to be used, it is treated as transferring a fee simple absolute interest in the property.
Alienation: right of reentry
A right of reentry may not be transferred during the holder’s lifetime.
Ambiguities
When the terms of a conveyance are ambiguous, courts construe the instrument to effectuate the grantor’s intentions.
Courts typically adopt a preference for a fee simple subject to condition subsequent.
Fee simple subject to condition subsequent: right to terminate
The grantor must explicitly retain the right to terminate the fee simple subject to condition subsequent in the conveyance.
But courts may be willing to imply a forfeiture provision when none was expressly set forth in the deed.
If the court does not imply a right to terminate, then the transfer is in fee simple absolute because no one has the right to terminate for a condition broken.
