Pg 6 Flashcards
What is a possibility of reverter?
This comes by operation of law when the transferee gets an estate subject to a special limitation.
If O transfers to A for life, provided that the land is used for residential purposes, does O have a reversion or a possibility of reverter?
A possibility of reverter, because it is possible that the right to possession may revert to O before the death of the life tenant.
When does a possibility of reverter kick in?
Automatically if the condition occurs, and then it transfers the property back to the grantor without anything having to be said or done. This can be express or not
What is the difference for possibility of reverter if the transfer is by deed or by will?
– Transfer by deed: the grantor keeps the possibility of reverter
– transfer by Will: heirs get the possibility of reverter by intestate succession
Is the possibility of reverter subject to RAP?
No so the potential duration can be indefinite
If changed conditions makes it difficult or impossible to achieve the purpose of a condition, then how is a situation that creates a possibility of reverter regarded?
The stated condition is disregarded
“To A so long as the land is used only for residential purposes.” If the land around this land later becomes completely industrial, so that it’s not even possible to use the land for residential purposes, what happens to that stated condition?
Court will just disregard it
Is a possibility of reverter considered to be transferable?
– at common law: you could not transfer this to a third-party, you could only pass it to your heirs
– today: it is fully transferrable
What is the power of termination/right of entry for breach of condition?
This is a future interest that can be created in a grantor when the grantor tries to create a fee simple subject to condition subsequent. It must be spelled out, and then it is up to the grantor to enter and take possession. This is not automatic because it is at the option of the grantor to take the affirmative steps needed to exercise it
Is a power of termination subject to RAP?
No
What do you have to be very careful about in order for a power of termination to apply?
That it is expressly stated in the conveyance. I.e.: “on breach, the lessor may re-enter, terminate the lease, or forfeit it.“
“A to B and his heirs on condition that alcohol not be served on the premises, and if it is, A and his successors can enter and terminate B’s estate.“ What does this create?
A power of termination
If language is ambiguous, what should you always do?
Because courts hate forfeitures, always go with the interpretation it won’t lead to a forfeiture
Is a power of termination transferable?
– common law: it couldn’t be transferred, it could only be passed by will or descent to heirs
– modernly: it is freely transferrable
Is it necessary that a formal entry happen in order for a power of termination to apply?
No, no formal entry is needed because bringing an action of ejectment is the way to terminate this.
What are the two future interests that are created in the grantee or third persons?
Remainders and executory interests
What is a remainder?
A future interest created in someone other than the grantor, following immediately after the expiration of a particular estate. The remainder waits for expiration and may never become present if the defeasance happens
What type of interest is created here? “To A for life, then to B for life, then to C.”
A reminder is given to C
What kind of estate usually precedes a remainder?
A life estate, a fee tail, or an estate for years
Is it still a remainder if it follows after a gap in possession?
No, a remainder must follow immediately and can never directly follow possession by the grantor
What is the key to a remainder?
It naturally follows automatically to a third-party, it never cuts short or divests the preceding estate
What kind of estate can a remainder follow?
Only a particular state, it can never follow a fee simple
What is the difference between a reversion and a remainder?
Reversions are retained in the grantor and remainders in someone else
How do you create a remainder?
First you create a particular estate, then name a person to take it after the estate expires
Is it necessary to use the word “remainder to“ when trying to create a remainder?
No
Is there a limit on the number of remainders that can be created at once?
No as long as it doesn’t add up to more than a fee simple absolute
What are the four NEVERS of remainders?
- it can never follow a fee simple
– It can never divest a prior estate
– it can never directly follow possession by the grantor - it can never shift or spring
What are the two types of remainders?
Vested reminders and contingent remainders
What are the two types of vested remainders?
- Remainders vested subject to open
- vested remainders subject to conditions subsequent
What is a vested remainder?
It is vested as soon as it is created in a living ascertainable person and is not subject to any condition precedent besides termination of the preceding estate, so it is ready to take possession immediately on the natural expiration of the prior state.
What is an example of a vested remainder?
“To A for life, then to B and his heirs.“
The interest follows naturally upon the termination of a life estate and B is ascertainable because he’s a named person and there’s no condition to him taking it other than A dying —> that is why this is a vested remainder
What is an example of a remainder that is not vested?
“A to B for life, then to the oldest child of C then living.“
The oldest child has a remainder after the natural termination of the life estate, but it’s unknown who will be the oldest child when B dies, because that is not currently ascertainable, plus there is a condition that the child must be alive when B dies, so this is a contingent remainder, and not a vested reminder
Is it possible for a vested remainder to change over time?
“A to B for life, then to the first kid of C.”
If at the time that this is made, C has no kids it would be a contingent remainder in the unborn child, but if two years later a child is born, then he becomes ascertainable and then has a vested remainder
What does it mean to say that vested remainders are salable?
If the holder of the vested remainder dies before they get it, the remainder passes to their heirs
What are the only future interests that can be vested?
Reversions and remainders
