Present Possessory Estates Flashcards
What is a present possessory estate?
A present possessory estate is an interest that gives the holder the right to present possession. Three categories:
(i) Fee Simple Absolute
(ii) Defeasible fee (which there are three types)
(iii) Life Estate
(1) Fee Simple Absolute
“To A” or “To A and his heirs”
A fee simple absolute is ABSOLUTE ownership of indefinite or potentially indefinite duration
- freely transferable
- devisable by will
- descendible through intestacy
(2) Defeasible Fees (fee simple estates)
They are uncertain or potentially infinite duration that can be terminated upon the happening of a stated event
(2) Defeasible Fee
Type 1: Fee Simple Determinable (and possibility of reverter)
Fee Simple Determinable terminates upon the happening of a stated event and automatically reverts to the grantor
Durational language needed: “to A for so long as”; “to A while”; “to A during”
Fee Simple Determinable can be conveyed, but always with the attached condition: the grantee takes subject to the estate being terminated by the specified event
If the stated condition is violated forfeiture is automatic /!\
Accompanying Future Interest of a Fee Simple Determinable?
Possibility of Reverter: the grantor conveying a fee simple determinable automatically retains a possibility of reverter
(2) Defeasible Fee
Type 2: Fee Simple Subject to Condition Subsequent (and right of entry)
The grantor reserves the right to terminate the estate upon the happening of a stated event. The estate does not automatically terminate, the grantor must take some action.
Creation:
(i) use of conditional words (“upon condition that”)
(ii) an explicit statement of the grantor’s right to re-enter
Important: not automatically terminated if the stated condition occurs. Rather, the condition gives the grantor the right to cut the estate short, but it may choose also not to terminate.
Accompanying future interest of a Fee Simple Subject to Condition Subsequent?
Right of Entry
Must be expressly reserved
(in contrast with the possibility of reverter it does not arise automatically)
(2) Defeasible Fee
Type 3: Fee Simple Subject to an Executory Interest
“to A, but if X event occurs, then to B”
Fee simple estate that terminates upon the happening of a stated event (because it is determinable or subject to a condition subsequent) and then passes to a third party rather than reverting back to the grantor - the third party has an executory interest.
Accompanying future interest of a Fee Simple Subject to an Executory Interest?
Shifting Executory Interest
Rules of Construction for Defeasible Fee
words of desire, hope or intention do not create a defeasible fee /!\
Absolute Restraint on Alienation are Void
“to A so long as she never attempts to sell”
(3) Life Estate
“to A for life”
A has a life estate and is known as a life tenant
Estate measures in explicit lifetime terms and never in terms of years.
(3) Life Estate
Pur Autre Vie
The estate is measured by the life of another than the grantees.
“to A for the life of B”
Life pur autre vie also results when life tenant conveys life estate to another
If A, holder of a life estate, conveys their interest to B, B has a life estate for the life of A
Accompanying future interest of a life estate?
Reversion
Life tenant rights
Entitled to all ordinary uses and profits from the land
Life tenant must not commit waste (voluntary, permissive, ameliorative)
Voluntary Waste
Life Tenant depleting a property’s natural resources constitutes voluntary waste, only OK when:
(i) necessary for repair and maintenance of the land
(ii) the land is suitable only for such use
(iii) expressly impliedly permitted by the grantor
(open mines doctrine: if mining was done on the land prior to the life estate it can continue mining, but they’re limited to the mines already open)
Permissive Waste
Occurs when a life tenant fails to comply with their duties, such as by allowing land to fall into disrepair - life tenant obliged to:
- preserve the land and structures in reasonable state of repair
- pay ordinary taxes on the land
- pay interest on mortgage
- pay special assessments for public improvements of short duration
Not obliged to ensure the premise for the benefit or the remainder-men & not responsible for damages caused by third-party tortfeasor
Ameliorative Waste
Change in property that benefits the property economically - not allowed because of sentimental value. BUT exceptions:
- ameliorative waste does not diminishes the market value of the future interests
- the remainder-men does not object
- substantial and permanent change in the neighbourhood conditions
Future Interests (in transferees - reaminders)
1. Contingent Remainder
(i) Created in unborn or unascertained persons or
(ii) is subject to a condition precedent , or both
- Vested Remainders
(three types)
Remainder created in an existing and ascertained person and not subject to condition precedent.
Indefeasibly Vested Remainder
Vested Remainder Subject to Total Divestment
Vested Remainder Subject to Open
Vested Remainders
Type 1: Indefeasibly Vested Remainder
Holder of this remainder is certain to acquire an estate in the future
“to A for life, remainder to B” A is alive. B is alive.
What does A have? Life Estate
What does B have? Indefeasibly vested remainder
Vested Remainders
Type 2: Vested Remainder subject to Total Divestment (known as subject to “complete defeasance”)
Vested remainder subject to a condition subsequent
The remainder-man exists (not subject to any condition precedent), but his right to possession could be cut short because of condition subsequent
“to A for life, then to B, provided however, that if B dies under age of 25, to C”
A: life estate
B: vested remainder subject to complete defeasance
C: shifting executory interest
Vested Remainders
Type 3: Vested Remainder Subject to Open
Vested remainder created in a class of persons (“children”), that is certain to become possessory but is subject to diminution (by birth of additional children for example)
When does a class closes? Rule of Convenience
The class closes when some members of the class can call for distribution of their share of the class gift
“to A for life, then to B’s children”. A is alive. B has two children, C and D. When does the class close?
Once A dies, a child of B born or conceived thereafter will not share in the gift (exception: the womb rule).
Future Interests in Transferees - Shifting Executory Interests
Shifting Executory Interest: always follows a defeasible fee
“to A, but if B returns from Canada, to B and his heirs”
