Interests in Property

Question 1

Ways to transfer (“alienate”) property

Answer 1

• Sale
• Devise (Gifts)
• Intestate Succession

Question 2

Fee Simple

Answer 2

This is the largest possessory estate because it is capable of lasting forever.

From “O to A” or “O to A and his heirs”

Question 3

Fee Simple Determinable

Answer 3

Fee Simple is limited by specific durational language.

“So long as” “During”

Rule: Fee Simple lasts so long as durational requirement is maintained. Once it is broken/disrupted the fee simple ends.

Question 4

Fee Simple Subject to Condition Subsequent

Answer 4

Fee Simple that is limited by Conditional Language

“But if” “provided that” “on the condition that”

Grantor has right to take possession of property.

A can own land in fee simple provided that A never builds a condominium on property.

Question 5

Possibility of Reverter

Answer 5

Example of a Future Interest

This follows a Fee Simple Determinable. The Grantor holds this Interest.

FSD: O to A and her heirs, so long as the land is used as a public park.

O has a Possibility of Reverter if land is used as a public park. This interest vests automatically.

Question 6

Right of Entry

Answer 6

The Future Interest held by the Grantor in a Fee Simple Subject to Condition Subsequent

DOES NOT VEST AUTOMATICALLY–Must be exercised to retake possession of land if current holder of the fee simple violates a condition.

Question 7

Fee Simple Subject to Executory Interest

Answer 7

Interest in held by a third party (not the grantor)

O conveys Acre to A and her heirs, but if liquor store is built on property, then to B and his heirs.

Question 8

Executory Interest

Answer 8

A future interest that cuts short, or “divests”, an earlier vested interest.

Subject to RAP.

Question 9

Life Estate

Answer 9

Estate that is limited by life.

“For life”

Question 10

Future Interests of Life Estates

Answer 10

1. Reversion: If possession goes back to grantor, then that interest is a reversion.
2. Remainder: If the possession goes to a third party.

Question 11

Waste and Property

Answer 11

Occurs when more than one party has an interest in the same piece of property.

1. Affirmative Waste: Voluntary conduct that caused a decrease in value.
2. Permissive Waste: Waste caused by Neglect which leads to decrease in value.
3. Ameliorative Waste: Unique situation where tenant or person in possession of property increases value of property. (Considered waste because it is a change to property.)

Question 12

Types of Future Interests in the Transferee

Answer 12

• Vested Remainder
• Contingent Remainder
• Executory Interest

Question 13

Vested Remainder

Answer 13

An interest that:

• Is given to an ascertained grantee AND
• Not subject to a condition precedent

If the remainder fails one of these prongs, then it is a Contingent remainder.

Question 14

Contingent Remainder

Answer 14

Is NOT a vested remainder.

(Either it lacks an ascertained grantee or the remainder contains a condition precedent)

This future interest is subject to RAP

Question 15

Class Gift – Vested Subject to Open

Answer 15

Prongs:

• There is a vested remainder in a class gift AND
• Full class membership is unknown (do not know when class will close)

Rule: At least one person must be vested. If no one is vested, then this is a Contingent Remainder

When all members have been identified, then the class is closed,

This future interest is subject to RAP.

Question 16

Doctrine of Convenience

Answer 16

A class closing mechanism to avoid application of RAP to that class gift.

Rule: If the grant does not have an express closing date, the Rule of Convenience closes the class when any member of the class becomes entitled to immediate possession.

Question 17

Springing Executory Interest

Answer 17

Divests the grantor of the vested interest.

Question 18

Shifting Executory Interest

Answer 18

Divests a prior grantee of a vested interests.

Question 19

Rule Against Perpetuities

Answer 19

No interest is good unless it must vest or fail not later than 21 years after some life in being at the creation of that interest.

Applies to:

• Contingent Remainders
• Executory Interests
• Vested Class Gifts Subject to Open

Question 20

Exceptions to RAP

Answer 20

• Gifts from one charity to another charity.
• Options
• For Class Gifts:
  
  • When it transfers a specific dollar amount to each class member
  • Transfers to a sub-class that vests at a specific time

Question 21

Three Types of Concurrent Estates

Answer 21

• Tenancy in Common
• Joint Tenancy
• Tenancy by the Entirety

Question 22

Tenancy in Common

Answer 22

This is the default/presumed interest.

Rule: Concurrent owners have separate but undivided interest in the property.

Rule: No right os survivorship.

Question 23

Joint Tenancy

Answer 23

Rule: Has the right of survivorship.

Create a JT by:

• Grantor makes a clear expression of intent AND
• there is survivorship language included

MUST HAVE THE FOUR UNITIES

1. Possession: Each Joint Tenant has equal right to possess whole property
2. Interest: Joint Tenants must have an equal share of the same type of interest
3. Time: Joint Tenants must receive their interests at the same time
4. Title: Joint Tenants receive interest through the same legal instrument

Question 24

Severance of Joint Tenacny

Answer 24

Any party can sever a JT at any time without consent if other JTs.

If any of the Unities are destroyed, then JT is severed.

IF JT is destroyed, then it converts to Tenancy in Common.

Question 25

Tenancy by the Entirety

Answer 25

Type of Joint Tenants between Married People

Adds a Fifth Unity (Marriage)

Has Right of Survivorship

Must be explicitly created: Property conveyed “as tenants by the entirety, with right of survivorship.”

Tenancy by the Entirety cannot alienate or encumber their shares in the property without the consent of the spouse.

Question 26

Ouster

Answer 26

Generally, each co-tenant has the right to possess all of the property (unless contracted different).

An OUSTER is when a co-tenant denies another co-tenant access to the property.

Remedies:

Get an injunction OR sue for damages for times that you couldn’t access property that resulted in loss of value.

Question 27

Co-tenancy and Rent

Answer 27

If a third party is paying rent, that rent must be divided between co-tenants based on their ownership interest in the property.

On the flip side, operating expenses (i.e. taxes) are split among interest ownership of tenants.

Question 28

Right to Repair and Improvements and Co-Tenants

Answer 28

There is no right to reimburse co-tenants for necessary repairs.

There is no right to be reimbursed for improvements.

[However, if there is a partition these expenses may be used as a credit]

Question 29

Partition

Answer 29

This is an equitable remedy for Joint Tenancy and Tenants in Common where the court separates a co-owned property.

Any party can engage in this action at any time.

Courts prefer a physical partition, however they can order a sale and then split the proceeds (based on ownership interest) if it is not practical to physically split property or if that split would be unfair.

Co-tenants can contract not to partition so long as the agreement is clear and there is a reasonable time limitation.

Question 30

Choice of Law and Real Property

Answer 30

Rule: Controlling law is based upon the jurisdiction where the property is located (law of the situs)

Legal instruments (contracts, marriages, mortgages) can supersede the rule

Question 31

FHA (Fair Housing Act)

Answer 31

Goal is to remove discriminatory practices (refusing to rent, different rent prices, advertisements showing discriminatory preferences) on the basis of (1) race; (2) disability; and (3) family status.

DOES NOT APPLY TO:

Sexual Orientation

Owner-Occupied buildings with 4 OR FEWER living units

Religious or Private Clubs