LAND ESTATES (What type of interest?) Flashcards
Present Estates
Freehold:
Freehold: offers a present possessory interest in the estate.
Fee Simple absolute
conveys absolute ownership of potentially infinite duration.
Life Estate
is an interest that lasts for the lifetime of a person.
Pur Autre Vie
lasts for the lifetime of an identified third party.
Fee Tail
lasts as long as there are lineal blood descendants of the grantee.
Defeasible
Defeasible
Subject to Condition Subsequent has the potential to terminate the estate at the occurrence of a stated event.
o Right of reentry is the future interest the grantor retains but is not automatic and must be exercised to have effect.
Explicit language of condition sub.:
But if … Provided that … Condition that … However … Subject to condition that …
Subject to Condition
Subject to Condition Subsequent has the potential to terminate the estate at the occurrence of a stated event.
Right of reentry is the future interest the grantor retains but is not automatic and must be exercised to have effect.
Right of reentry is the future interest the grantor retains but is not automatic and must be exercised to have effect.
Explicit language of condition sub.:
But if … Provided that … Condition that … However … Subject to condition that …
Determinable automatically terminates at the occurrence of a specified event.
Determinable automatically terminates at the occurrence of a specified event.
Possibility of reverter
Possibility of reverter is the future interest the grantor retains - if the specified event occurs the property automatically reverts back to the grantor.
“SWUD” So long as, While, Until, During
Subject to executory
Subject to executory limitation automatically terminates a preceding estate at the occurrence of a stated event and passes to a third person.
Executory interest is the future interest the third party holds.
What do Future Interests offer…
Future Interests offer the potential of a future interest in an estate.
Future interests of the holder=transferor
Holder = Transferor
1) Right of Reentry follows a fee simple subject to a condition subsequent.
2) Possibility of Reverter follows a fee simple determinable.
3) Reversion follows a life estate.
Executory Interest is an interest
• Holder = Transferee
o Executory Interest is an interest in favor of a future grantee and follows a fee simple subject to executory limitation.
• Shifting: divests the transferee/3rd party.
• Springing: divests the transferor/grantor
Remainder is a future interest that can only become possessory upon the expiration of a prior possessory estate created by the same instrument. A remainder never follows a defeasible fee.
Contingent: is one created in an unascertained person (i.e., unborn child) and/or one that is subject to a condition precedent.
• Condition Precedent is an event (other than the natural termination of the prior estate) that MUST occur before the remainder can become a possessory estate.
• Alternative contingent remainder: occurs where both contingent parties have the capacity to take over and it pivots on the same condition (e.g., to A for life, then to B and his heirs if B marries C, otherwise to D).
o Remainder is a future interest that can only become possessory upon the expiration of a prior possessory estate created by the same instrument. A remainder never follows a defeasible fee.
Contingent: is one created in an unascertained person (i.e., unborn child) and/or one that is subject to a condition precedent.
• Condition Precedent is an event (other than the natural termination of the prior estate) that MUST occur before the remainder can become a possessory estate.
• Alternative contingent remainder: occurs where both contingent parties have the capacity to take over and it pivots on the same condition (e.g., to A for life, then to B and his heirs if B marries C, otherwise to D).
Contingent
Contingent: is one created in an unascertained person (i.e., unborn child) and/or one that is subject to a condition precedent.
Condition Precedent is an event (other than the natural termination of the prior estate) that MUST occur before the remainder can become a possessory estate.
Condition Precedent is an event (other than the natural termination of the prior estate) that MUST occur before the remainder can become a possessory estate.
Alternative contingent remainder
Alternative contingent remainder: occurs where both contingent parties have the capacity to take over and it pivots on the same condition (e.g., to A for life, then to B and his heirs if B marries C, otherwise to D)
Vested: A vested remainder is a remainder that is
A vested remainder is a remainder that is: (1) created in a living, ascertainable person; AND (2) not subject to any condition precedent.
o Indefeasible: 100% certainty
o Subject to Open: class may enlarge
o Subject to Divestment: -> condition subsequent
Rule Against Perpetuities
No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest.
Must vest means
Must vest means if there’s even a remote chance it won’t vest in time, it’s void.
“Bad for one, bad for all”
“Bad for one, bad for all” – for class gifts, if the gift to any member of a class won’t vest in time, the entire class gift fails.
The time the interest is created
Wills
Revocable trusts
Deeds
The time the interest is created
1) Wills create interests when the testator dies.
2) Revocable trusts create interests when they become irrevocable.
3) Deeds create interests upon delivery.
RAP applies to: [ECO]
RAP applies to: [ECO]
• Executory interests
• Contingent Remainders
• Vested Remainder Subject to Open
5 STEPS TO DETERMINE IF THE RAP IS VIOLATED
STEPS TO DETERMINE IF THE RAP IS VIOLATED
• Step 1: Determine whether the FI AT ISSUE is SUBJECT to the RAP
• Step 2: Determine when the PERPETUITY WINDOW begins “CONVEYS OR DEVISES”
• Step 3: Determine what must happen for the FI to VEST OR FOREVER FAIL to vest (and for the class to close if applicable)
• Step 4: Identify who the RELEVANT LIVES IN BEING are that can be used as the initial point in our P.W.
• Step 5: Look into the CRYSTAL BALL TEST each relevant life to determine if any one can VALIDATE the FI.
Uniform Statutory Rule Against Perpetuities
Uniform Statutory Rule Against Perpetuities
A nonvested property interest is invalid UNLESS
1) it vests or terminates within 90 years after its creation.
2) If the common law RAP is not violated, the statutory RAP is not violated.
TWO BRIGHT REDLINE RULES FOR RAP PER BB:
TWO BRIGHT REDLINE RULES PER BB:
- An executory interest with NOT LITMIT attached on the TIME within which it must vest violates the RAP.
- A gift to an OPEN CLASS conditioned upon members surviving to an AGE PAST 21 YEARS violates the RAP.
The Rules of Destructibility
The Rules of Destructibility– A contingent remainder is destroyed if it fails to vest when then the prior estate terminates.
Rule in Shelley’s Case
If a conveyance creates a life estate or fee tail in a transferee AND also creates a remainder in fee simple in that transferee’s heirs, then the future interest belongs to the transferee (NOT the heirs).
O to A for life, then to A’s heirs – Historically, present and future interest merge => FSA
The Merger Rule
Under the doctrine of merger, the transferee’s smaller interest (i.e., life estate) “merges” into his larger interest (i.e., remainder in fee simple) resulting in a fee simple absolute estate.
The Doctrine of Worthier Title
When there is a transfer or devise to a person and a remainder or executory interest to the grantor’s heirs or next of kin, no future interest is created in the grantor’s heirs. The grantor retains a reversion.
Class Gifts
Class gifts–remainder is vested in a group of takes, at least one of whom is qualified to take (Open or closes.)
Waste
Waste: tenant for life entitled to ordinary uses/profits – cannot lawfully do any act that would injure future ints. If he does- FI holder may sue for damages and/or enjoin such acts
Affirmative
Affirmative – created by overt conduct that causes drop in value; LT must not consume or exploit natural resources on the property unless 1 of 4 exceptions applies: (“PuRGE”)
Affirmative waste (“PuRGE”)
Affirmative – created by overt conduct that causes drop in value; LT must not consume or exploit natural resources on the property unless 1 of 4 exceptions applies: (“PuRGE”)
Prior use (open mines doctr); Reas repairs & maint.; Grant (explicitly given right); Exploitation (land only suitable for)
Permissive Waste
Permissive (neglect) – Occurs when land is allowed to fall into disrepair or LT fails to pay req carrying charges
LT must maintain in reas good repair & pay all ordinary taxes to extent of profits/rent value
Ameliorative Waste
Ameliorative – LT must not engage in acts that will enhance property’s value unless all of the future interest holders are
(1) known &
(2) consent OR
(3) substantial & permanent change in neighborhood deprives prop of reason productivity/usefulness.
Restraints on Alienation –
Restraints on Alienation – Absolute restraints on alienation are void, but reasonable time-limited purpose is allowed.
