Ownership

Question 1

Ways to transfer property

Answer 1

• sale
• gift
• devise (will)
• intestate succession (death with no will)

Question 2

Fee simple

Answer 2

• Fee simple is the largest possessory estate because it is capable of lasting forever
• It is inheritable
  
  • Upon the owner’s death, the owner can pass it by will or by intestate succession
  • During owner’s life, can be passed by sale or gift
• Creation: look for “and his/her heirs”
  
  • If ambiguous, it is fee simple by default
    
    • i.e. “To Anna forever” becomes fee simple
• No future interest because it lasts forever

Question 3

Defeasible Fees, Generally

Answer 3

• May be terminated by the occurrence of an event
• Capable of lasting forever but also of being terminated early
• Condition will cut short the fee simple
• Person who will own the land after the condition or event holds a future interest

Question 4

Fee Simple Determinable

Answer 4

• Limited by specific durational language
  
  • “O to A so long as it is used as a farm”
  • Usually “while” “during” or “until”
• Future interest: possibility of reverter
  
  • Land reverts to grantor automatically after the durational period ends

Question 5

Fee Simple Subject to Condition Subsequent

Answer 5

• Limited by specific conditional language
  
  • “O to A, but if liquor is served, O may re-enter”
  • Usually “but if” “provided that” “on the condition that”
• Future interest: right to entry
  
  • Grantor retains right to re-enter and re-claim property if the stated condition is met
  • Does not vest automatically; right to entry must be exercised affirmatively

Question 6

Fee Simple Subject to Executory Interest

Answer 6

• Will end upon the happening of an event and the future interest is held by a third party other than the original grantor and grantee
  
  • “O to A, but if liquor is served, to B and his heirs”
• Future interest: executory interest
  
  • Cuts short (divests) the grantee’s rights after the occurrence of the stated event
• 2 types of executory interests
  
  • Springing executory interest: divests original grantor
  • Shifting executory interest: divests prior grantee

Question 7

Life Estate

Answer 7

• Present estate that is limited to grantee’s life
  
  • “O to A for life.”
  • Ends when grantee dies
• Transferrable, but not alienable by grantee after death
• Future interests
  
  • Reverter: if it goes to original grantor after grantee’s death
  • Remainder: if it goes to third party after grantee’s death
• Grantee has obligation to avoid waste on property

Question 8

Waste

Answer 8

• Comes into play when more than one party has an interest in the same piece of real property
• Three types:
  
  • affirmative: waste caused by voluntary conduct
  • permissive: waste caused by neglect of the property
  • ameliorative: waste that improves condition of the property

Question 9

Concurrent Estates, Generally

Answer 9

• Definition: 2 or more people holding ownership or possession of real property at the same time
• Basic rule: all concurrent owners have right to use/possess the whole property
• Three types
  
  • tenancy in common
  • joint tenancy
  • tenancy by the entirety

Question 10

Tenancy in Common

Answer 10

• Default concurrent interest; any ambiguity in a conveyance to 2+ people defaults to TIC
• Concurrent owners have separate but undivided interests
• No right of survivorship
• Each tenant can convey their portion during life or after death

Question 11

Joint Tenancy: Definition, Creation

Answer 11

• Land owned by 2 or more people with equal interests
• Defining characteristic is right of survivorship
• Created by:
  
  • Clear expression of intent to create joint tenancy; PLUS
  • survivorship language, i.e. “Joint tenants with right of survivorship”
• Four unities must be present - PITT
  
  • Possession: all tenants have equal right to possess
  • Interest: all tenants have equal shares of same interest
  • Time: all tenants receive share at the same time
  • Title: all tenants receive interest by same instrument of title

Question 12

Joint Tenancy: Severance

Answer 12

• If any of 4 unities (PITT) are destroyed, joint tenancy reverts to tenancy in common
• Can be severed by:
  
  • Inter vivos transfer (during tenant’s life)
    
    • If one transfers and 2+ remain, remaining tenants still have joint tenancy between each other, granting tenant’s grantee has TIC
  • Mortgage
    
    • Only in some jdx; most treat this as a lien and do not sever the tenancy
  • Leases
    
    • If one joint tenant leases their share, some jdx will sever; most will treat it as temporary suspension of the joint tenancy
• Liens on a tenant’s share end at tenant’s death and thus do NOT sever the joint tenancy or encumber other tenants’ rights

Question 13

Tenancy by the Entirety

Answer 13

• Joint tenancy by married people (marriage is the 5th unity)
• Right of survivorship
• One tenant cannot alienate or encumber shares without other’s consent
• Magic words: Property conveyed “as tenants by the entirety, with a right of survivorship”
• If grant is ambiguous, courts presume property is held as joint tenants or as tenants in common.

Question 14

Rights of Concurrent Property Owners

Answer 14

• Every tenant has right to possess all the property, regardless of ownership percentage, unless they agree otherwise
  
  • If one tenant is ousted (locks changed, e.g.), ousted tenant can get injunction and/or recover damages for loss of use during time tenant was barred
• Rent collected from 3d party possession and operating expenses are divided according to ownership shares
  
  • Right to collect contribution for excess payments
• NO right to reimbursement for necessary repairs or improvements, though can claim credit if property is later partitioned

Question 15

Partition Actions for Jointly Owned Property

Answer 15

• Equitable remedy available for joint tenants or tenants in common where courts will divide property into distinct portions
  
  • Unilateral right; tenants by entirety need consent
• Physical division is preferred, i.e. partition in kind
• If physical division not possible/practical/fair to all parties, courts will force sale, divide proceeds by % ownership
• Co-tenants can agree not to partition, so long as agreement is clear and reasonable in duration

Question 16

Remainders

Answer 16

• Future interest in a life estate going to a third party
• Can be vested or contingent
  
  • Vested when grantee is ascertained and interest is not subject to condition precedent
  • Contingent when grantee fails above criteria
• Only contingent generally subject to RAP

Question 17

Class Gifts

Answer 17

• Vested subject to open when class gift and:
  
  • Full class membership is unknown
  • At least 1 class member must be vested; if all are unknown, remainder is contingent
• Once all members are known, the class is closed
• RAP applies but,
• Rule of Convenience - courts will close the class when one member is eligible for immediate possession

Question 18

Doctrine of Worthier Title

Answer 18

• Special case in class gifts issues
• Creates presumption of reversion to the grantor to avoid RAP problems with remainders going to grantor’s heirs
  
  • i.e. “O to A for life, then to my heirs” - DOWT would return the land to grantor, rather than heirs

Question 19

Rule in Shelly’s Case

Answer 19

• Special case in class gifts issues
• Prevents against RAP problems when remainder goes to grantee’s heirs
• Doctrine of merger applies to make a fee simple
  
  • i.e. “O to A for life, then to A’s heirs” - RISC creates fee simple for A rather than life estate

Question 20

Rule Against Perpetuities

Answer 20

• Forbids future interests that will not certainly vest in a validating life within 21 years
• Validating life
  
  • Person who tells us whether the remainder will vest within 21 years
  • Must be alive when interest is created
• Traditionally only applies to contingent remainders and executory interests
  
  • Also vested remainders subject to open if the class is not closed by Rule of Convenience
• When RAP is violated, violating interest is struck from grant and the rest remains
  
  • i.e. “O to A for life, then to A’s first child who reaches 22 years old.” End is struck, A holds life estate & O gets reversion
• Not applicable to grants to charities
• “Wait and See Approach” - courts sometimes wait to see if the remainder will actually vest in 21 years

Question 21

Class Gifts & RAP

Answer 21

• Rule of Convenience - courts will close the class when one member is eligible for immediate possession
• If the gift to any member of the class is void under RAP, then the gift is void as to all members of the class
• 2 exceptions:
  
  • Specific $ amount to each member of class
  • Transfers to a specific subclass that vests at a specific time
    
    • i.e. “To the children of A and, upon the death of each, to that child’s issue”