I. ESTATES IN LAND A. PRESENT FREEHOLD ESTATES; B. FUTURE INTERESTS

Question 1

A. PRESENT FREEHOLD ESTATES
1. Fee Simple Absolute: The Estate That Will Never End
alienation
a. Characteristics of the Estate

Jerry willed the farm in upstate New York to Elaine, but provided that if Elaine tries to sell the farm during her lifetime it goes to George.
Jerry to Elaine, but if Elaine allows Newman on the property during her lifetime, then to George.

Jerry to Elaine, but if Elaine tries to sell the property during her lifetime George has a right of first refusal.

Answer 1

a. Characteristics of the Estate
The distinguishing characteristics of this estate are that it runs forever and is freely alienable
Any attempt to put a direct restraint on alienation (transfer) is void; ignore the restriction.

Elaine has FSA
George has nothing

ok, condition on the exercise is permissible

A Right of First Refusal is not an invalid restraint
is telling the owner who is the first one can buy it when owner wants to sell

Question 2

b. Creation of a fee simple

Grant language is merely “To A”.

Answer 2

Courts will presume a fee simple unless language shows a clear intent to create another estate.
A gets fee simple

Question 3

2. The Defeasible Fee Estates: The Estates That Might End

Answer 3

These estates in land have the characteristics of the fee simple but might not last forever. However, the duration is not measured by (1) life time or (2) specific date. These may terminate upon the happening of a condition

Question 4

a. The Fee Simple Determinable

The key difference between a Fee Simple Determinable and the Fee Simple Subject to Condition Subsequent

Answer 4

Look for magic words that are durational
Remember these words: so long as, during, while, until

The key difference between a Fee Simple Determinable and the Fee Simple Subject to Condition Subsequent is that the Fee Simple Determinable ends automatically. The holder of the future interest is the grantor and he just wait patiently for the present estate to end

Question 5

b. The Fee Simple Subject to Condition Subsequent

Answer 5

Look for magic words that are conditional
Remember these words: but if, provided, however, upon condition that

Remember, the Fee Simple Subject to Condition Subsequent does not end automatically. The holder of the future interest is the grantor and he must take steps to reenter and claim the land

Question 6

c. The Fee Simple Subject to Executory Limitation

Answer 6

c. The Fee Simple Subject to Executory Limitation
No need to focus on magic words with this estate.
Like the Fee Simple Determinable, the Fee Simple Subject to Executory Limitation will end automatically upon the happening of some condition but it is different because possession will then pass to another grantee. The future interest is not retained by the grantor.

Question 7

3. Life Estate: The Estate That Will End
   a. Characteristics of the Estate

A house in California was conveyed from Jerry to Elaine. The language was “to Elaine for life, but in no event for more than 10 years.”

Answer 7

The distinguishing characteristic of this estate are that it is never measured by time, but only by life.
It is only transferable during life, not at death

Elaine doesn’t have life estate, measure by time

Question 8

b. Creation of the Conventional Life Estate
Jerry conveys his ranch “to Elaine for life, then to George and Kramer.”
In his will, Jerry left the ranch “to George and Kramer after the death of my dear friend Elaine.”

Answer 8

1) Can create by express language.
2) Can create by implication. Reason: that must have been what grantor meant.

Eliane has life estate

Question 9

c. Creation of the Life Estate Pur Autre Vie

If A dies before B, who possesses the land?

“To A for life.” Later A sold her life estate to B.

If B dies before A, who possesses the land?

Answer 9

HYPO: “To A for the life of B.”

The life estate pur autre vie is expressly created in the conveyance.
The majority rule is that it passes to A’s estate until B dies.

A life estate pur autre vie is created by virtue of A’s conveyance. A cannot convey more than she has. This is the more common creation of the life estate pur autre vie.
The majority rule is that life estate passes to B’s estate until A dies.

Question 10

d. Forfeiture restrictions on life estates
Jerry to Elaine for life, then to George, but if Elaine tries to sell her life estate, that estate terminates and the property goes to George in fee simple.
Is this restriction on alienation OK?

Answer 10

yes; Language that would terminate a life estate if holder tries to transfer it does not violate the rule prohibiting restraints on alienation.

Question 11

*** e. Rights and Duties of Life Tenant – Waste

Voluntary waste:
Depletion of natural resources
The sale of crops grown on the land

Answer 11

All life tenant can do is maintain the estate, and that means continuing the normal use of the land in its present condition.
If life tenant does more than or less than merely maintaining the estate, then life tenant is guilty of waste.

any affirmative act beyond the right of maintenance that causes harm to the premises
Life tenant can only continue the normal use; any change of use is voluntary waste, and life tenant is liable to the holder of the future interest.
Watch Out! Depletion of natural resources is waste unless the normal use of the land was to deplete them. Facts to trigger this concept will be harvesting timber, mining coal, extracting oil and gas, or any other type of minerals. This is called the open mine doctrine. The sale of crops grown on the land is not waste

Question 12

*** e. Rights and Duties of Life Tenant – Waste
Permissive waste:

Limitation on life tenant’s liability

Answer 12

where tenant has failed to maintain the estate

Life tenant must do three things to avoid permissive waste:

1, Repair: Life tenant must keep property in repair, but is only responsible for ordinary repairs, not improvement/ replacemnet.

2, Taxes: Life tenant pays all taxes on the property
Watch Out! Holder of future interest must make sure taxes get paid, because a tax sale terminates the future interest. Purchaser at tax sale gets Fee Simple.

3, Interest: Life tenant pays any interest on any mortgage. Does the holder of the future pay anything? pay principle.

Limitation on life tenant’s liability: For all three above, life tenant’s obligation is limited to the amount of income received from the land, or, if the life tenant is personally using the property, the reasonable rental value of the land.
What about insurance? Life tenant does not have to insure the property.

Question 13

*** e. Rights and Duties of Life Tenant – Waste
Ameliorative waste:

HYPO: An old residential mansion is now surrounded by heavy industry. The life tenant wants to tear down the mansion, thus making the underlying land much more valuable for other uses. The holder of the future interest objects.
Can the life tenant tear it down?

Answer 13

Ameliorative waste: is a special type of voluntary waste that occurs when the affirmative act alters the property substantially but increase the value of it.

yes

RULE: If changed conditions have made the property relatively useless in its current use, the life tenant can tear it down without liability to the holder of the future interest.

Question 14

***B. FUTURE INTERESTS

Answer 14

This is a present interest in the land with a future right of possession. The interest exists now, but possession will not come until later, if at all.
Overview: For the exam we are concerned with two topics Classifying the interests
Applying the Rule Against Perpetuities (RAP)

Question 15

• **B. FUTURE INTERESTS

1. Classification of Future Interests

Answer 15

Need to first ask, “who holds the future interest?”
If the answer is grantor, then the only possible choices are the (1) Reversion, (2) Possibility of Reverter, and (3) Right of Entry (or Power of Termination).
NOTE: If any chance that property might go back to Grantor, then one of these is kept even if there are other future interests created.

If the answer is grantee, then the only possible choices are the (1) Remainders and (2) Executory Interests.
NOTE: There are subcategories of each that we will define to properly identify the future interest.

Question 16

a. Future Interests in the Grantor: The Reversion

O to A for life.
O to A for life. Later A grants the property to B for life. What interests do each have after the A to B conveyance?
O to A for life (A is 86 years old). Later A leased to B for 50 years; Ten years after A gives B the 50-year lease, A dies.
Who is entitled to possession?
HYPO: O to A for life, then to B and his heirs if B survives A.

RAP?

transfer?

Answer 16

The Reversion is the interest kept by the Grantor when Grantor gives a Grantee less than the durational estate the Grantor had.
A: life estate; O: reversion in fee simple
B: life estate from A; A: reversion in B’s life estate; O: reversion in fee simple
B: term of years (leasehold for 50 yrs); A: reversion in B’s life estate; O: reversion in fee simple; O entitled
A: life estate; B: contigent remainder in fee simple; O: reversion in fee simple

Regardless of the Reversion’s characteristic is certain or speculative, a reversion is never subject to RAP.

Reversions can be transferred freely.

Question 17

b. Future Interests in the Grantor: Possibility of Reverter

Jerry to Elaine and his heirs for so long as no liquor is consumed on the premises.

RAP?

transfer?

Answer 17

E: fee simple determinable; J: Possibility of Reverter

Remember, the Fee simple determinable ends automatically when the condition happens. This means that the Possibility of Reverter does not have to do anything to be entitled to take possession.

The Possibility of Reverter is never subject to RAP, and is freely transferable.