Ownership Interests

Question 1

Fee simple absolute

Answer 1

Absolute ownership of potentially infinite duration.

“To A” or “To A and his heirs”
Freely alienable, devisable, and descendible.
No accompanying FI.

Question 2

Fee simple determinable

Answer 2

Limited by specific durational language.

“So long as,” “while,” “during,” “until.”

Automatically terminates upon happening of stated event.

FI = Possibility of reverter in the grantor

Question 3

Fee simple subject to condition subsequent

Answer 3

Limited by specific conditional language.

“Upon condition that,” “provided that,” “but if.”

Will terminate only if the grantor affirmatively demonstrates intent to terminate.

FI = Right to reenter in the grantor

Question 4

Fee simple subject to executory interest

Answer 4

Limited by specific conditional language.

Automatically terminates upon happening of stated event, and title passes to a third party.

FI = Executory interest in the third party.

Question 5

Life estate

Answer 5

Present possessory estate fully transferable during measuring life.

If third party: “to A for life,” “to B after the life of A, “to A for life, but if he drinks then to B” (defeasible).

If measured by grantee’s life, not devisable/descendible by grantee.

May be cut short by specified event (defeasible life estate).

Question 6

Life estate waste

Answer 6

Limits the rights a holder of a LE. LT must deliver property to future interest holder in substantially the same condition as when LT took possession.

Holder of any FI may bring suit against LT for injunction.

Question 7

Life estate allocation of burdens

Answer 7

LT must pay property taxes to the extent LT receives a financial benefit from the land.

Pre-existing mortgage obligations and assessments for public improvements are allocated between LT and future interest holder.

Question 8

Reversion

Answer 8

FI held by a grantor who transfers a LE or estate for years without conveying remaining FI to a third party.

Not subject to RAP. Alienable, devisable, descendible.

Question 9

Possibility of reverter

Answer 9

FI retained by a grantor when a FSD is conveyed.

Alienable, devisable, descendible.

Question 10

Right of reentry

Answer 10

FI retained by a grantor after a FSSCS is granted.

Alienable, devisable, descendible in most states.

Question 11

Remainder

Answer 11

FI that becomes possessory upon the natural expiration of a prior estate that is created in the same conveyance in which the remainder is created.

Vested if not subject to any conditions precedent + ascertainable grantee.

Question 12

Vested remainder subject to open

Answer 12

If at least one class member is qualified to take possession at the time of the conveyance, each class member’s share is subject to partial diminution.

Additional takers not yet ascertained can still vest.

Question 13

Vested remainder subject to complete divestment

Answer 13

The occurrence of a condition subsequent will completely divest the remainder.

Question 14

Contingent remainder

Answer 14

Created in an unascertainable grantee or is subject to an express condition precedent to grantee’s taking.

Question 15

Executory interest

Answer 15

FI in a third party (not a remainder) that cuts the prior estate short upon the occurrence of a specified condition.

Transferable and subject to RAP.

Question 16

Shifting executory interest

Answer 16

Cuts short a prior estate created in the same conveyance.

Estate shifts from one grantee to another grantee upon the happening of a condition.

Question 17

Springing executory interest

Answer 17

Divests the grantor’s interest or fills a gap in possession in which the estate reverts to the grantor.

Question 18

Rule Against Perpetuities (RAP)

Answer 18

Specific FIs are valid only if they must vest or fail by the end of a life in being plus 21 years.

Applies to: contingent remainders, vested remainders subject to open, executory interests.

Question 19

RAP rule for class gifts

Answer 19

If RAP voids a transfer to any class member, then the transfer is void as to all class members, even those whose interests have already vested.

EXCEPT: transfers of a specific dollar amount to each class member; transfers to a subclass that vests at a specific time.

Question 20

RAP charity-to-charity exception

Answer 20

If property passes from one charity to another, RAP does not apply.

Question 21

Tenancy in common

Answer 21

Two or more grantees with unity of possession.

No right of survivorship.

Each cotenant holds undivided interest with unrestricted rights to possess whole property.

Interest freely devisable/transferable.

Question 22

Joint tenancy

Answer 22

Two or more persons own the property with right of survivorship.

Requires the Four Unities.

Severance converts JT into a TIC only with respect to the severed shares.

Question 23

Four Unities for JT and TbE

Answer 23

(1) P - equal rights to Possess the whole
(2) I - with identical equal Interests
(3) T - created at the same Time
(4) T - by the same Title (instrument)

Question 24

JT severance

Answer 24

Converts to a TIC only with respect to the severed share.

Sale - don’t need consent; severs JT as to seller but JT of non-transferors remains intact.

Mortgage - severs JT under title theory, but not under lien theory.

Judicial lien - typically will not sever the JT; severance occurs when the property is levied and sold.

Question 25

Tenancy by entirety (TbE)

Answer 25

Same unities as JT, plus unity of person (parties must be married to each other when deed is executed or conveyance occurs).

Neither party can alienate or encumber property without other’s consent.

Presumed that divorce converts to a TIC.

Question 26

Co-tenant right to possess

Answer 26

Each co-T has right to possess the entire property.

Generally not required to pay rent when other co-Ts do not use the property (unless co-T has been ousted).

Question 27

Co-tenant contribution

Answer 27

Co-T can collect contribution from other co-Ts for operating expenses (e.g., taxes)…

BUT, if in sole possession, only if they exceed the rental value of the property.

No right to contribution for improvements.

Question 28

Co-tenant repair rights

Answer 28

May maintain separate action for contribution in some states if notified other co-Ts of need for the repairs.

Question 29

Co-tenant rent received rights

Answer 29

Co-T must account for rent received from third parties, but can deduct expenses.

Net proceeds are divided among co-Ts based on ownership interests.

Question 30

Co-tenant duties owed

Answer 30

Co-T owes a duty of fair dealing to other co-Ts, but generally owes no fiduciary duties.

EXCEPT: a co-T buys the property at a tax or foreclosure sale (the other co-Ts can buy back their interests within a reasonable time).

Question 31

Partition rights

Answer 31

A TC or JT generally has the right to unilaterally partition property. TbE does NOT.

Question 32

Co-tenant easement rights

Answer 32

Co-Ts may agree to create an easement.

A unilaterally-created easement is only enforceable against the co-T who created it.

Question 33

Fair Housing Act

Answer 33

FHA prohibits discrimination in the sale, rental, and financing of homes and in other housing-related transactions.

EXEMPT: owner-occupied buildings with < four units (including the owner’s); single-family homes sold or rented without a broker.

Question 34

FHA protected classes

Answer 34

Race, color, religion, national origin, sex, disability, familial status.

Question 35

Discrimination claims under FHA

Answer 35

P need only show a disparate racial impact.

No intent or purpose needed.

Question 36

Conflict of laws

Answer 36

Generally apply the laws of the state where the real property is located.