PE & FI

Question 1

promissory restraint

Answer 1

provides that the grantee covenants not to transfer the property. A conveyance from “O to A, and A hereby covenants not to transfer the land or any interest therein without O’s consent” contains a promissory restraint. Reasonable (i.e., limited in time and purpose) promissory restraints on legal interests generally are valid.

Question 2

disabling restraint

Answer 2

provides that any attempted transfer of the property is ineffective. A conveyance from “O to A, and neither A nor her heirs shall have the right to transfer the land or any interest therein” contains a disabling restraint. Disabling restraints on any legal interest are void.

Question 3

forfeiture restraint

Answer 3

provides that if the grantee attempts to transfer the property, it is surrendered to another person. A conveyance from “O to A, but if A attempts to transfer the land or any interest therein during her lifetime, to B” contains a forfeiture restraint. Reasonable forfeiture restraints on legal interests generally are valid.

Question 4

The Rule Against Perpetuities

Answer 4

provides that certain interests in property are void if there is any possibility, however remote, that they may vest more than 21 years after some life in being at the creation of the interest.

Question 5

In the case of a will, the perpetuities period begins to run on

Answer 5

date the testator dies

Question 6

shifting executory interest

Answer 6

is a future interest that divests the interest of another transferee. it dose bot follow a gap in possession or vest the estate of the transferor.

Question 7

remainder

Answer 7

is a future interest created in a transferee that is capable of becoming a present interest upon the natural termination of the preceding estate. Generally, a remainder follows a life estate. If the interest is not capable of taking on the natural termination of the preceding estate, it is an executory interest.

Question 8

contingent remainder

Answer 8

is a remainder that is (i) subject to a condition precedent, or (ii) created in favor of unborn or unascertained persons. a remainder cannot divest a preceding estate prior to its normal expiration. Future interests that cut short a preceding estate are called executory interests.

Question 9

springing executory interest

Answer 9

is a future interest that follows a gap in possession or divests the estate of the transferor. A conveyance from “O to A for life, and one year after A’s death to B” creates a life estate in A, a reversion in O (the transferor), and a springing executory interest in B, because it springs out of O’s reversion.

Question 10

vested remainder subject to total divestment

Answer 10

. A remainder is a future interest that is created in a transferee and is capable of becoming a present interest upon the natural termination of the preceding estate. Generally, a remainder follows a life estate. A vested remainder subject to total divestment is a remainder created in an ascertained person in being whose interest is not subject to a condition precedent but is subject to being defeated by the happening of some condition subsequent. A conveyance from “O to A for life, then to B; but if B predeceases A, to C” creates a life estate in A, a vested remainder subject to total divestment in B (because B is an ascertained person in being whose interest is subject to being divested if she does not survive A), and a shifting executory interest in C

Question 11

fee simple determinable

Answer 11

is an estate that automatically terminates on the happening of a stated event and reverts to the grantor. A conveyance from “O to A for so long as/while/during/until [event]” creates a fee simple determinable in A and a possibility of reverter in O. A fee simple determinable is not an estate that continues after the happening of a stated event until the grantor exercises her power of termination. An estate that continues after the happening of a stated event until the grantor exercises her power of termination (right of entry) is a fee simple subject to a condition subsequent.

Question 12

fee simple subject to a condition subsequent

Answer 12

An estate that continues after the happening of a stated event until the grantor exercises her power of termination (right of entry). A conveyance from “O to A, upon condition that/provided that/but if/if it happens that [event], O may enter and terminate the estate” creates a fee simple subject to a condition subsequent in A and a right of entry in O.

Question 13

fee simple subject to an executory interest

Answer 13

An estate that terminates on the happening of a stated event and divests in favor of a third person, rather than in favor of the grantor. A conveyance from “O to A for so long as/while/during/until [event], then to B” or “provided that/but if/if it happens that [event], then to B” creates a fee simple subject to an executory interest.

Question 14

rule of convenience

Answer 14

a class closes when some member of the class can call for a distribution of her share of the gift. When possession and enjoyment of a gift are postponed, as where the gift follows a life estate, the class remains open until the time fixed for distribution (e.g., death of the life tenant).

Question 15

life estate

Answer 15

• “to A for life”
• When measured by someone else’s life = Pur Autre Vie. Also results with the life tenant conveys their life estate to another.
• Future interest in grantor = reversion
• Future interest in 3rd party = remainder
• Life tenant cannot commit waste

Question 16

life estate waste

Answer 16

Voluntary = or affirmative waste is actual overt conduct that causes a drop in value. Depleting natural resources could constitute waste unless (1) necessary for repair or maintenance of the land (2) the land is suitable only for such use or (3) its expressly or impliedly permitted by the grantor. Opine mines doctrine=you can only mine in already open mines.
Permissive = waste occurs when a life tenant fails to comply with their duties such as by allowing land to fall into disrepair or by failing to reasonably protect the land. Duties include to persevere the land and structures in a reasonable state of repair, pay taxes wither on income or on the rental value, pay interest on mortgage, and pay special assessments for public improvements of short duration.
Ameliorative = waste is a change that benefits the property economically. Can’t do unless all future interest holders are known and consent to preserve sentimental value. Modern rule is life tenant can alter or demolish building if: the market value of future interests is not diminished and either the remainder men do not object or a substantial and permanent change (90% change) in the neighborhood conditions has deprived the property in its current form of reasonable productivity or usefulness.

Question 17

possibility of reverter

Answer 17

whenever grantor conveys a fee simple determinable, they automatically retain a possibility of reverter. It is transferable, devisable by will, and descendable by intestacy.

Question 18

rights of entry

Answer 18

Whenever a grantor conveys a fee simple subject to condition subsequent the grantor reserves the right to terminate the estate upon a happening of an event. Doesn’t automatically happen, grantor must act.
“upon the condition that”
“but if”
“if it happens that”
“provided that”
Most courts hold that rights of entry are not transferable inter vivid, but most states agree they are devisable by will and all states agree they are descendible through intestacy.

Question 19

reversion

Answer 19

If the future interest is held by Grantor it is called a reversion

Question 20

vested remainder subject to open

Answer 20

vested remainder created in a class of persons that is certain to become possessory but is subject to diminution - for example by the city of additional persons who will share in the remainder as a class

Question 21

indefeasibly vested remainder

Answer 21

a vested remainder that is not subject to divestment or diminution. Holder is certain to acquire an estate in the future with no strings or conditions attached.

Question 22

Rule of Perpetuities applies to

Answer 22

The Rule applies to the following interests in property: (i) contingent remainders; (ii) executory interests; (iii) class gifts (even if vested remainders); (iv) options and rights of first refusal; and (v) powers of appointment.

Question 23

Rule of Perpetuities does not apply to

Question 24

When RAP begins to run on a deed

Answer 24

date of delivery

Question 25

When RAP begins to run on a irrevocable trust

Answer 25

from the date it is created

Question 26

When RAP begin to run on a revocable trust

Answer 26

The day it become irrevocable