Ownership of Real Property Flashcards
Exam tip
Five testable areas:
• Ownership
o Classifying Present and Future Estates
o Concurrent Estates
o Landlord/Tenant
• Rights in Land
• Contracts
• Mortgages/Security Devices
• TitlesPresent Possessory Estates: Freehold Estates
Fee Simple Absolute
(1) This is the best type of estate: A FSA holder has all possible rights that a person may have in that parcel of land
(2) Creation: “to A and his heirs” (common law); “to A” (modern law)
Exam tip
Devisees take by will, heirs take by the law of intestacy in the relevant jurisdiction, and grantees take by inter vivos (literally “between the living”) transfer.
Present Possessory Estates: Freehold Estates
Defeasible Estates Generally
An estate that may terminate upon some happening or event before its maximum duration has run
Present Possessory Estates: Freehold Estates
Defeasible Estates: Fee Simple Determinable
(a) Created by durational language—for so long as, during, until, or while (e.g., “to A for so long as liquor is not served on the premises”)
(b) Terminates automatically on the happening of a named future event; the estate returns to the grantor
Present Possessory Estates: Freehold Estates
Defeasible Estates: Fee Simple Subject to a Condition Subsequent
(a) Created by conditional language (provided however, however if, but if, on condition that, or in the event that) as to occurrence of a condition that will terminate estate
(i) Power of termination must be expressly reserved to the grantor
(b) If the language is ambiguous, courts interpret the grant as an attempt to create a FSSCS; though, this often fails and the grant becomes a fee simple absolute for lack of a specific power of termination; thus, avoiding a forfeiture of the fee simple estate
Present Possessory Estates: Freehold Estates
Defeasible Estates: Fee Simple Subject to Executory Interest
(a) Created by either conditional or durational language
(b) Termination occurs on the happening of an event that terminates the estate; property passes to someone other than grantor
Present Possessory Estates: Freehold Estates
Fee Tail
(1) Common law: An estate that descended to grantee’s children only
(2) Modern law: Fee tails are disfavored and are treated as fee simple absolutes
Present Possessory Estates:
Life Estate
i) Life estates last for the duration of the grantee’s life and can be made defeasible (e.g., “to B for life, so long as B farms land”)
ii) “Life estate pur autre vie” = The duration of the estate is measured by the life of someone other than the grantee (e.g., “to B for the life of C”)
Present Possessory Estates:
Non-Freehold Estates
Estate that is limited in duration (basically a landlord-tenant relationship)
Future Interests: Possibility of Reverter
i) Possibility of Reverter = future interest in the grantor that follows a determinable estate
ii) Creation: a fee simple determinable automatically creates a possibility of reverter; no special language needed
(1) Upon the happening of the event, the land automatically reverts back to thegrantor
iii) Transferability
(1) Common Law: Could descend through intestacy but could not be devised or transferred inter vivos
(2) Modern law: Freely transferable, devisable, and descendible
Future Interests: Power of Termination (Right of Reentry)
Power of Termination = a future interest in the grantor when the grantor attempts to create a FSSCS or a defeasible life estate
i) Creation: Not automatic; must be spelled out in the conveyance or it does not exist
(1) Upon the happening of the event, the property does not automatically revert. The grantor must exercise the right of reentry and take affirmative steps to retake the property
ii) Transferability
(1) Common law: The power of termination could descend through intestacy but could not be devised or transferred inter vivos
(2) Modern law/Majority: The power of termination is descendible and devisable; however, the power of termination is not transferable inter vivos
Future Interests: Reversionary Interest
i) Reversion = Future interest retained by the grantor when the grantor transfers less than a fee interest to a third person (e.g., “A to B for 10 years” –> reversion back to A after 10 years)
ii) Transferability
(1) Common law: The power of termination could descend through intestacy, but could not be devised or transferred inter vivos
(2) Modern law: The power of termination is freely transferable, devisable, and descendible
Future Interests: Remainder Generally
Future interest created in a third person that is intended to take effect after the natural termination of the preceding estate (e.g., “A to B for life, then to C” –> C has a remainder)
Future Interests: Remainder
Contingent Remainder
Any remainder that is not vested
Future Interests: Remainder
Vested Remainder
Rule—a remainder is vested at the point that it is:
(a) Created in an ascertainable person; and (b) Not subject to any condition precedent, other than termination of the preceding estate
Future Interests: Remainder
Vested Remainder Subject to Total Divestment
A remainder that is presently vested but may be terminated on the happening of a future event
(i) “A to B for life, remainder to C, so long as liquor is never served on the premises”–> C has vested remainder but could lose it by serving liquor on the premises
Future Interests: Remainder
Vested Remainder Subject to Open
A remainder to a class with at least one ascertainable member who has satisfied any conditions precedent to vesting, but other members may join the class later
(i) Class Opening
1. Inter vivos conveyance: class opens at the time of the conveyance
2. Testamentary conveyance: class opens at the death of the testator
(ii) Class Closing
1. The (RAP) can void a future interest
a. Generally, does not apply to vested interests except vested remainders subject to open
b. If any member of a class could potentially claim in a way that violates the RAP, the entire class gift fails
2. Rule of Convenience: Class closes as soon as one member of the class becomes entitled to immediate possession of the property
Future Interests: Executory Interests Generally
Future interest in a third person that cuts short the previous estate before it would have naturally terminated
(1) Because a fee estate has the potential to last forever, any interest created in a third party that follows the granting of a fee will always be an executory interest
**Subject to the RAP
Future Interests: Executory Interests
Shifting Executory Interests
The interest passes from one grantee to another (i.e., a grantee to a grantee (most common))
Future Interests: Executory Interests
Springing Executory Interests
Springing Executory Interest: The interest transfers from a grantor to a grantee
Springs back to grantor then goes to a grantee
Rules Affecting Future Interests
Waste Generally
Owner of less than a fee estate cannot commit waste (e.g., harm the property at the expense of the person who will hold it after them)
