III. Possessory Estates

Question 1

What is a Fee Simple? (language)

Answer 1

An estate capable of being inherited by whoever turns out to be the heir of the fee simple owner, can have no limits put on inheritability.

“To A.”

Question 2

If you die intestate; who gets your shit?

Answer 2

(1) Issue: descendants: children, grandchildren, etc.
(2) Parents: ancestors: parents, grandparents, etc.
(3) Collateral: brothers/sister, aunts/uncles, cousins, etc. (all else related)
(4) if none of 1-3: escheat to state

Question 3

Estate for Life

Answer 3

“To A for Life” Lasts A’s lifetime

Reversionary Interest of O: A’s life estate returns to O upon A’s death

Question 4

What are the 3 types of restraints on alienation? (restraints on property transfer)

Answer 4

(1) disabling restraint: very strong limitation: grantee may not transfer interest at all
(2) forfeiture restraint: try to transfer and it’s forfeited and lost to another person
(3) promissory restraint: grantee promises that his interest won’t be transferred (less strong: K-like so damages are the result)

Question 5

Numerus Clausus Principe

Answer 5

requires owners to create only legally recognized property interests

Restricts freedom of ownership to promote easy transferability of property rights

Question 6

What are the 3 objections for laws against restraints on alienation?

Answer 6

Makes property unmarketable for the best use!

Perpetuates the concentration of wealth 

Discourages improvements to land because cannot sell it

Question 7

What are the 3 laws of waste?

Answer 7

If two people have interest in property, those interests conflict.

Affirmative waste: acts that substantially reduce the value.

Permissive waste: negligence that reduces the value of the property.

Ameliorative waste: uses that increase rather than decrease the market value.

Question 8

What are 3 remedies for waste?

Answer 8

Remedy: injection, damages, extreme case forced transfer

Question 9

What are defeasible estates?

Answer 9

Estate will terminate prior to natural end point upon the occurrence of any future event

Question 10

Fee Simple Determinable?

Answer 10

Will end automatically:
To “A so long as” - triggered by time/duration

Land belongs to school as long as premises are used for school purposes

Os Future Interest = possibility of reverter

Question 11

Fee Simple Subject to Condition Subsequent

Answer 11

May be cut short or divested at transferor’s wish. Triggered by an event or condition

“To A, but if X happens, right to re-enter”

If not used for school purposes, grantor has a right to re-enter and retake the premises

Os Future Interest = right of entry

Question 12

Fee Simple Subject to Executory Limitation

Answer 12

May be cut short or divested and creates future interest in third party (executory interest) - triggered by executory interest

If not used for school purposes, library has the right to enter and take premises

3rd party - executory interest

Question 13

What are the types of future interests retained by the transferor?

Answer 13

Reversion
Possibility of Reverter
Right of Entry

Question 14

What are the future interests created in a transferee?

Answer 14

Vested Remainder
Contingent Remainder
Executory Interest

Question 15

What is reversion?

Answer 15

Is there something leftover?

Interest remaining with grantor when they transfer less than the vested estate they have

Question 16

What is a remainder?

Answer 16

uture interest created in transferee capable of being possessory immediately upon end of previous estate (if not then executory interest)

Examples

“To A for life, then to B” B has remainder, waits until end of 1st interest 

“To A for life, then to B when 21” No good unless B is 21 

“To A for life, then to B if B marrys C” OK because could happen 

“To A for life, then two years later to B” No good can’t have gap 

Death as a condition is a vested remainder

Question 17

What is an executory interest? (Two types)

Answer 17

Future interest created in transferee that must cut short or divest another interest in order to become possessory

Shifting→ cuts short interest in transforee(out of B)

Springing→ cuts short interest in transforeer (out of O)

Question 18

What is a vested remainder? (3 types)

Answer 18

A VR means the remainderment is ascertainable and there’s no unsatisfied condition precedent.

Three Types:
Indefeasibly Vested Remainder: A is definitely going to get possession
“To A for life then to B”

Vested Remainder Subject to Total Divestment / B could lose based on condition

“To A for life, then to B unless C becomes a lawyer”

Vested Remainder Subject to Open/Partial Divestment / Gift to class that could chance if class grows

“To A for life, then to children of B” B has one kid C

Question 19

What is a contingent remainder?

Answer 19

The (1) remainderment is unascertainable or (2) unsatisfied condition precedent // we don’t know heirs and there is a condition we haven’t satisfied

Unascertainable (ex. “Heirs of A” but A is still alive and don’t know heirs) 

Unsatisfied Condition Precedent (ex. “To B if 21,” B is 15) 

Condition Precedent→ event must occur before the remainder can become a possessory estate
Ex. “If B reaches 21, to B’s heirs” B must reach 21 (contingent remainder)

Condition Subsequent→ completed gift to B, and then add on a later condition in another clause
Ex. “To B but if B doesn’t reach 21, to C” (vested remainder)

Question 20

Rule of Perpetuities?

Answer 20

No interest is good unless it must vest, if at all, not later than 21 years after some life and being at the creation of the interest

Question 21

What are the steps of the rule of perpetuities?

Answer 21

Step-by-step:

(1) Look at the interest:
***only interests that RAP apply to:
Contingent Remainder
Executory Interest (EI)
Vested Remainder Subject to Open (VRSO)
-there is a contingency in EI & VRSO
**don’t care about vested remainders (no contingency) or present estates (future interest is held in transferor)

(2) What has to happen for the interest to vest?
Ex: “pass the bar” “don’t marry Z”

(3) Who are the relevant lives? (anyone that could affect it)
Need a “life in being”: someone alive at the relevant time (have to be alive at time of conveyance from O)

(4) Does any relevant life validate the interest?
Will the contingency definitely happen within that person’s life + 21 years?

Question 22

What is the uniform statutory rule against perpetuities?

Answer 22

90 year wait and see period and then reform deed so that it will vest in the next 90 year period

Question 23

What is teh cy prey rule?

Answer 23

if interest is invalidated by the rule, Ct changes the language to carry out the intent of the transferor: (transferor has an intent & can satisfy by changing the language)

Ex: “-> kids as they turn 25”

-intent of grantor is to give to those after maturity

Question 24

What is the wait and see rule?

Answer 24

: wait and see what actually happens (also see Symphony notes above): wait and see if the contingency actually vests within the perpetuities period (instead of wiping the clause out)

Ex: if kid = 15y.o when O dies, just wait and see if the kid reaches 25 (if that’s the contingency) within the period and it vests