Ownership Flashcards
What is a present estate?
An estate is a freehold if immobile and for indeterminate duration.
What does fee simple absolute (FSA) or fee simple (FS) mean?
What rights are included in a fee simple absolute?
It means you have absolute ownership of potentially infinite duration in a property.
-> “To A” or “To A and his heirs”
There is no accompanying future interest (from anyone else).
Rights: freely
-> alienable,
-> devisable,
AND
-> descendible.
What does alienable mean?
Transferable
What does devisable mean?
Transfer the property via a will.
What does descendible mean?
Transfer the property via intestate succession (there is no will in place and laws dictate how it goes to your heirs).
What is a defeasible fee in property mean?
You have an interest of potentially infinite duration the property (property is alienable, desirable, and descendible)
-> BUT this interest in the property is subject to termination by the occurrence of an event.
What does fee simple determinable mean (FSD)?
What happens when the stated event takes place?
What are the future interests at play here?
The interest in a property is limited by specific durational language (e.g. “so long as,” “while,” “during,” or “until”).
Your interest automatically terminated upon happening of the stated event.
There are future interests at play here, in which EITHER
-> the grantor (or his successor in interest) retains possibility of reverter;
OR
-> if the future interest is from a a third party then that third party has an executory interest.
What does a fee simple subject to condition subsequent (FSSCS) mean?
What happens when the conditional event happens?
How does the future interest work?
What right must the grantor retain?
The interest in the property is simply a present fee simple that is limited by a specific conditional language (e.g. “upon condition that,” “provided that,” “but if,” or “if It happens that”).
The present fee simple will terminate only if the conditional event is met AND the grantor affirmatively demonstrates an intent to terminate.
Future interest:
-> Grantor reserves right to terminate estate upon happening of a state event;
Grantor must specifically retain the right to reenter.
What does fee simple subject to executory interest/limitation mean?
What happens upon triggering of the conditional event?
Who has future interest and what kind of future interest?
The property interest is a present fee simple that is limited by specific conditional language.
The unrest is automatically terminates upon happening of the stated event, AND title passes to a third party.
Future interest: The future interest is an executory interest held by the third party (someone other than the grantor).
What is a life estate (LE)?
It’s.a present possessory estate that is fully transferable during/ in relation to a measuring life.
Language:
- “to A for life”
- “to B after the life of A”
- “to B for the life of C” (pur autre vie)
- “to A for life, but if A drinks, then to B” (defeasible fee)
Is a life estate alienable, devisable, or descendible?
Alienable -> Yes as long as it’s during the grantee’s life, BUT the grantor can add a further restriction if it’s reasonable.
If measured by the grantee’s life, then it isn’t devisable nor descendible (both of these happen when the grantee dies so their life is over, so does the life estate end).
If measured by another’s life then MAYBE LE is devisable or descendible (it depends).
Can a life estate be cut short?
Yes, by a specified event which makes the life estate a “defeasible life estate.”
What are the rights of a life tenant (LT) with regards to the LE?
The life tenant has the:
- right to possess the property
- right to collect rents, lease/sell/mortgage (must pay taxes on financial benefit from the land).
What is “waste”?
Waste limits the rights of a holder of a LE,
-> as the LT must deliver property to future interest holder in substantially the same condition as when LT took possession.
What is “permissive waste”?
What must the life tenant do with regards to permissive waste?
Occurs when LT permits the premises to deteriorate through neglect, failure to preserve, or a failure to reasonably protect the property
-> THEN LT must make reasonable repairs (up to amount of income produced by property or, if LT Is in actual possession, then it would be up to fair rental value).
What is a “voluntary waste”?
And an “ameliorative waste”?
This occurs when the condition of the property is substantially changed due to LT’s affirmative action.
-> Any action that would lead to a decrease in property value Is not permitted.
Any action that would lead to an increase in property value (called “ameliorative waste”), is permitted when the change results in a reasonable use of the property unless future interest holders have reasonably objection.
What can a holder of future interest do vis-a-vis a LT and waste?
A holder of ANY future interest may bring suit against LT for an injunction.
What are the allocations of burden for the life tenant regarding the life estate?
-> what does the LT have the burden of paying
-> what types of things are allocated between LT and future interest holder
The LT must pay property taxes to the extent LT receives financial benefit from the land.
Pre-existing mortgage obligations and assessments for public improvements are allocated between LT and future interest holder.
What are “future interests”?
It’s an ownership interest in presently existing property which may commence in possession or enjoyment sometime in the future.
What does “reversion” mean?
The type of interest that is held by a grantor who transfers a LE or estate for years without conveying the remaining future interest (FI) to a third party.
The interest is not subject to RAP.
The interest is alienable, devisable and descendible.
What does “possibility of reverter” mean?
It’s a FI retained by a grantor when a FSD (fee simple determinate) is conveyed.
The interest is alienable, devisable, and descendible.
What is the right to reentry?
It’s equivalent to the right to terminate, right of entry, or power of termination, in which the FI is retained by the grantor after a FSSCS (fee simple subject to condition subsequent) is granted.
In most states the right is alienable, devisable, and descendible.
What is a remainder?
It’s a FI that becomes possessory upon the natural expiration (meaning that a defeasible fee simple wouldn’t place us in “remainder territory”) (most common with life estates) of a prior estate that is created in the same conveyance in which the remainder is created.
E.g. “X conveys his property for A’s life and then to C.” C has a remainder in the property.
E.g. - much less common - “X conveys his property for 10 years to A, then to C.” This is a fee simple determinable for A, and C has a remainder and not an executory interest because there is nothing that could end A’s interest in the land short.
What happens if a party has a remainder but there is a defeasible fee that happens?
A remainder can’t follow a fee defeasible, as only an executory interest can follow a fee defeasible. So the remainder never vests and it goes back to grantor.
What is a vested remainder?
It’s a remainder that isn’t subject to a condition precedent and the there is an ascertainable grantee.
What is a vested remainder that is subject to open?
If at least one class member is qualified to take possession at the time of the conveyance (but less than all of them), each class member’s share is subject to partial diminution because additional takers who are not yet ascertained can still vest.
