Present Possessory Estates: Defeasible Fees

Question 1

What is a “defeasible fee”?

Answer 1

“defeasible fee” = fee simple estates (of uncertain or potentially limited duration) that can be TERMINATED upon the HAPPENING of a stated event

Question 2

What are the three types of defeasible fees?

Answer 2

1. Fee Simple Determinable (and possibility of reverter)
2. Fee Simple Subject to Condition Subsequent (and right of entry)
3. Fee Simple Subject to an Executory Interest

Question 3

Describe Fee Simple Determinable

What is it?

What language is needed for creation?
- what issue to look out for w creation language?

Is it devisable?
Is it descendible?
Is it alienable?

What future interest is created?

What issue to watch out for?

Answer 3

“fee simple determinable” =

1. terminates upon the happening of a STATED EVENT;
2. AUTOMATICALLY reverts to grantor

Creation language –>

1. must be created by CLEAR DURATIONAL LANGUAGE
   - “for as long as”
   - “while”
   - “during”
   - “until”
2. Statements of MOTIVE or PURPOSE are INSUFFICIENT
   Examples –> “for the purpose of” or “to be used for”

Devisable —> yes
Descendible –> yes
Alienable –> yes
(all subject to the condition)

Future Interest –> Grantor has a “possibility of reverter”
Note –> this is also devisable, descendible and alienable

Question 4

What is an example of a Fee Simple Determinable?

Answer 4

Frank Sinatra conveys Sinatra Palace “to Orville, so long as popcorn is never made on the premises”

Orville Has –> Fee Simple Determinable
Frank Has –> Possibility of Reverter

Question 5

Describe a “Fee Simple Subject to Condition Subsequent”.

What is it?

What language is needed for creation?
- what issue to look out for w creation language?

What future interest is created?

What issue to watch out for?

Answer 5

This estate is NOT automatically terminated, but CAN be cut short, at grantor’s option if the condition occurs.

Creation language –>

1. Created by the use of CONDITIONAL WORDS; AND
   - “upon the condition that”
   - “provided that”
   - “but, if”
   - “if it happens that”
2. Right of re-entry must be reserved

Future interest created –> Right of Reentry (right to terminate)
Most states –> ROR is not alienable
Most states –> ROR IS devisable
All states —> ROR IS descendible

Question 6

What is an example of language created a “Fee Simple Subject to Condition Subsequent”

Answer 6

Example 1 –> To A, but if X event occurs, grantor reserves the right to re-enter and re-take”

Ex. 2 —> Ross Converys “To Rachel, but if Coffee is ever consumed on the premises, grantor reserved the right to re-enter and retake”
• Rachel has –> Fee simple subject to condition subsequent
• Ross Has –> “Right of Reentry” (AKA “power of termination”)

Question 7

Describe “Fee Simple Subject to Executory Interest”

What are examples of creation language?

What future interest is created?

Answer 7

If Fee Simple terminates upon the happening of a stated event (bc it is TERMINABLE or SUBJECT TO CONDITION SUBSEQUENT), but passes to a 3rd person instead of grantor or giving grantor right to terminate, then the 3rd person has a “shifting executory interest”

1. “To Barry Manilow, but if Manilow ever performs music on the premises, then to Mandy”
2. “To A and his heirs, for so long as liquor is not sold on the premises, in that event, to B”
3. “Blackacre to XYZ church, but if it is used for anything other than church purposes, to B”

Future interest –> “shifting executory interest”

Question 8

What issues arise with regards to all defeasible fees?

Answer 8

1. words of mere hope, desire, intention INSUFFICIENT to form any defeasible fee. Instead, they will create a Fee Simple Absolute
   Examples –>
   - “To A, for the purpose of constructing a day care center”
   - “To A, with the hope that she becomes a lawyer”
   - “To A, with the expectation that the premises will be used as a blockbuster”
2. Conditions and limitations that violate public policy are void.
   (a) DIVORCE
   - if purpose of restriction is to PENALIZE MARRIAGE or ENCOURAGE DIVORCE, it will likely be struck down
   - If purpose is to GIVE SUPPORT in the event of divorce, may be OK
   (b) Restrictions on alienability
   - Absolute restrictions on alienability = void
   Example –> O Conveys “To A, so long as she never attempts to Sell”
   Result –> limitation is void. A gets Fee simple absolute

• Restrictions that are limited to reasonable time/purpose = OK
  Example –> O Conveys “To A as long as she does not attempt to sell until the year 2014, when clouds on the title will be resolved”
  Result –> limitation is OK
• A gets Fee Simple Determinable
  -O gets possibility of reverter