Property 1 - Rights in Land/Classification of Estates

Question 1

3 Types of Fee Estates

Answer 1

1. Absolute 2. Defeasible 3. Tail

Question 2

Fee Simple Absolute

Answer 2

Best of the best. You and your heirs will own the property forever, no conditions or restrictions.

Question 3

Common law language to create Fee Simple Absolute

Answer 3

“To x and his/her heirs.” Saying only ‘i leave it to x’ would only create a life estate.

Question 4

Modern law way for creating Fee Simple Absolute.

Answer 4

Fee simple absolute is presumed. Only have to say, “I leave it to X”

Question 5

Defeasible Estates

Answer 5

An estate that will terminate upon the happening of some occurrence or event.

Question 6

Fee Simple Determinable

Answer 6

Whenever the grantor uses durational language; language that speaks to the duration the estate is to last. E.g. “so long as” “while” “until”

Question 7

How does fee simple determinable terminate.

Answer 7

Automatically on the happening of a named future event.

Question 8

Fee Simple Subject to Condition Subsequent

Answer 8

Whenever a grantor uses conditional language. NOT an automatic creation. E.g. “but if” “on condition that” “provided that”

Question 9

3 Types of Present Estates

Answer 9

1. Fee 2. Life 3. Term

Question 10

Ambiguous language in Defeasible Estates

Answer 10

Will be treated as an attempt to create a Fee Simple Subject to a Condition Subsequent. To create an Fee Simple Determinable you should use unambiguous language.

Question 11

Fee Simple Subject to Executory Interest

Answer 11

Can be created by either durational or conditional language. On the happening of the event that will terminate the fee estate, the property passes to a THIRD PARTY.

Question 12

Fee Tail - Common Law

Answer 12

Was an attempt to limit ownership of the property to lineal descendants of the grantee. You couldn’t transfer the property to a friend.

Question 13

Fee Tail - Modern Law

Answer 13

Vast majority of jrdx have outlawed Fee Tail. If you see the language it would just be considered a Fee Simple Absolute.

Question 14

Life Estate

Answer 14

A life estate lasts for the duration of someone’s life. Usually the life of the grantee. Can be made defeasible.

Question 15

Life Estate per autre vie

Answer 15

A life estate where the measuring life is someone other than the grantee.

Question 16

Term Estate

Answer 16

Any granting of a limited period of ownership of land other than when it is measured by someone’s life. Essentially a landlord/tenant relationship.

Question 17

Possibility of Reverter

Answer 17

The future interest that is automatically created in the grantor whenever the grantor hands out a fee simple determinable.

E.g. “A to B so long as B farms the land.” creates the possibility of reverter in the grantor for the period of B’s life.

Question 18

Creation of Possibility of Reverter

Answer 18

Possibility of Reverter is automatically created when the FSD is handed out. If the condition happens, then the FSD automatically terminates and the property automatically goes back to the grantor.

Question 19

Possibility of Reverter at Common Law

Answer 19

Could not be transferred inter vivos by the grantor. It could only pass to the grantor’s heirs by will or descent.

Question 20

Possibility of Reverter under Modern Law

Answer 20

A majority of jrdx hold that a possibility of reverter can be transferred to anyone.

Question 21

Right of Reentry (Power of Termination)

Answer 21

The reversionary interest that CAN be created in the grantor when the grantor attempts to hand out a Fee Simple on Condition Subsequent.

Question 22

Creation of Right of Reentry

Answer 22

Is not automatic. It is only created if the conveyance spells it out and provides for that right of reentry.

E.g.: “A to B provided that B uses the premises for residential purposes. If B doesn’t use the premises for residential purposes, A has the right of reentry.”

Question 23

Exercising Right of Reentry

Answer 23

If conveyance doesn’t have magic language, it doesn’t terminate B’s ownership of the land. It’s interpreted as a contractual promise on the part of B. If B doesn’t use the property for residential purposes, B would be liable to A for damages for the breach of contract, but B doesn’t lose the property.

If you have the magic language, it’s still not an automatic termination. There is no termination until the grantor or the grantor’s heirs exercise the right of reentry and actually go and take the property.

Question 24

Right of Reentry at Common Law

Answer 24

The RoR could not be transferred inter vivos, had to pass to your heirs either by will or descent.

Question 25

Right of Reentry under Modern Law

Answer 25

Majority of jrdx allow free transfer of the RoR to anyone.

Question 26

Reversion

Answer 26

Is the future interest that is automatically created in the grantor whenever the grantor makes out a conveyance that fails to provide ownership of the property in perpetuity. A conveyance always has to provide for ownership in perpetuity, if there’s ever a gap, reversion fills that gap.

Question 27

Executory Interest

Answer 27

Is a future interest created in a third party that cuts short the preceding estate before it would have naturally terminated.

Since a fee estate has the potential to last forever, any interest created in a 3rd party that follows the granting of a fee will always be an executory interest.

E.g.: “A to B so long as liquor is never served on the premises. If it ever is served, property will pass to C.” C has an executory interest.

Question 28

Shifting Executor Interest

Answer 28

Is a situation where the property moves from ownership from one third party to another.

E.g. “A to B so long as B uses the property for residential purposes. If B ever stops using for residential purposes, to C.” Shifts the property from grantee B to grantee C.

Question 29

Springing Executory Interest

Answer 29

Where property moves from ownership of a grantor to a third party.

E.g. “A to B for life. Then 20 years after B’s death, to C.” B has a life estate. When B dies, property reverts back to grantor. Then 20 years later, transfers to C.

Question 30

Remainder

Answer 30

A future interest created in a third party that follows naturally the termination of the preceding estate.

E.g. “A to B for life, then to C.” C has a remainder.

Question 31

Contingent Remainder

Answer 31

Any remainder that is not vested.

Question 32

Vested Remainder

Answer 32

A remainder is vested at the point that it is: (1) created in an ascertainable person; we can ascertain who the person is that is to take this remainder. (2) It is not subject to any condition precedent other than the termination of the preceding estate.

E.g. “A to B for life, then to C.” C has a vested remainder because C is ascertainable and there is no condition precedent to his taking other than B’s death. “A to B for life, then to the oldest child of C then living.” Is contingent remainder: we don’t know who the oldest child is going to be until B dies and a condition is precedent to them taking it–they must be alive when B dies.

Question 33

Vested Remainder Subject to Condition Subsequent/Complete Divestment

Answer 33

Someone has a vested remainder, but after taking title they could lose the title on the happening of a condition.

E.g.: “A to B for life, remainder to C, so long as liquor is never served on the premises.” C has a vested remainder but could lose it by serving liquor on the premises.

Question 34

Vested Remainder Subject to Open/Partial Divestment

Answer 34

Involves a remainder to a class.

E.g. “A to B for life, then to the children of C.” As soon as C has a child, that child is an ascertainable person and there is no condition other than B’s death. Child would have a vested remainder, but it is ‘open’ because as other children are born, they will also share the gift.

Question 35

Class Opening - Inter Vivos Conveyance

Answer 35

The class opens automatically on the making of the conveyance.

Question 36

Class Opening - Testamentary Conveyance

Answer 36

The class does not open until the testator dies.

E.g. “A to B for life, then to children of C.” If testamentary in A’s will, if at the time of the will C had Child D, but D dies before A, D (and her heirs) are out of the class because the he died before the opening of the class.

Question 37

Class Closing - Rule of Convenience

Answer 37

A class is deemed closed at the very moment at least 1 member of the class becomes entitled to immediate possession of the land.

E.g.: “A to B for life, remainder to the children of C.” When B dies, C has 2 living children. Those 2 kids would be entitled to take immediate possession. This would close the class, and any other children of C born after are shut out of the class.

E.g.: “A to B for life, then to the children of C who reach the age of 25. When B dies, C has 2 kids living, one 30 and one is 20. 30 year old has a vested remainder and can go into immediate possession. This closes the class. 20 y/o can join when he reaches 25 but any child born after the class is closed cannot join when they’re 25.

Question 38

Doctrine of Worthier Title

Answer 38

It is worthier to take by descent than by devise. Can only affect a conveyance that is worded as such: “A to B for life, remainder to A’s heirs.” Whether or not A included ‘remainder to A’s heirs,’ the property would have gone to A’s heirs via a reversion. Should pass by descent rather than the devise.

Question 39

Waste

Answer 39

Determines what someone who owns land can or cannot do with it. Fee estate: can last forever, they don’t have to be concerned with the possibility that someone will have the property after them; can do whatever they want.

Less than a fee estate: someone else is going to have land after you, limited as to how they can use property so they don’t run down its value at the expense of the person who will own it after them.

Question 40

Voluntary Waste

Answer 40

Involves a volitional act. It consists of the life tenant intentionally or negligently damaging a property to the extent that ti is going to have some long lasting damage to it.

Question 41

Permissive Waste

Answer 41

Is an omission to act. A life tenant has an obligation to act reasonably to prevent harm to the property. Permissive waste arises when the life tenant fails to act reasonably and the property is harmed as a result.

E.g.: Life tenant has property in florida and fails to close the storm shutters during hurricane season.

Question 42

Ameliorative Waste

Answer 42

Deals with improvements. Absent express permission to do so, a life tenant or limited term tenant has no right to improve the property. The tanant can be sued for the cost of removing the improvement.

Question 43

Ameliorative Waste under Modern Law

Answer 43

A tenant can commit ameliorative waste if: (1) The market value of the land has not been impaired AND EITHER: (2) permission from the person who owns the remainder interest OR (3) a change to the property or neighborhood which justifies this improvement.

Question 44

Suing for Past or Future Waste

Answer 44

Vested Remainder – Can sue for damages that have been incurred by the land and for an injunction to stop future waste.

Contingent Remainder – Cannot sue for damages, only for an injunction against future harm.

Question 45

Restraints on Alienation

Answer 45

“A to B for life, but if B tries to sell his interest, then to C.”

Question 46

Total Restraint on Alienation

Answer 46

“A to B, but if B ever tries to sell the property, then property will revert to A.”

On a FEE: Never allowed.
On LESS than a fee: Total restraint will be valid if it is reasonable.

Question 47

Partial Restrain on Alienation

Answer 47

Purchase Option - “A to B and her heirs, but A reserves the right to buy back at any time during A’s life.”

Right of First Refusal - “A to B and her heirs, but if B ever attempts to sell during A’ls life, B must first offer the property to A at the same price.”

Both are valid if reasonable.

Question 48

Rule Against Perpetuities

Answer 48

Common law RAP was “no interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.”

Question 49

Purpose of Rule Against Perpetuities

Answer 49

Courts did not like situations where land was tied up in perpetuity with ridiculous contingencies that may or may not ever happen. To try and limit this courts tried to say that interest must vest within 21 years of date of death of anyone alive at the time of the conveyance.

Question 50

Rule Against Perpetuities - Possibilities

Answer 50

Only deals with possibilities. What actually happens doesn’t matter. If a possibility could be created that someone could claim more than 21 years after someone is dead, then that interest is knocked out.

Question 51

What Rule Against Perpetuities Applies To

Answer 51

No present estates. 3 future interests: Executory Interest, Contingent Remainder, Vested Remainder Subject to Open. And 2 other interests: Purchase Option, Right of First Refusal.

Question 52

Examples of Rule Against Perpetuities

Answer 52

“A to B so long as the property is used for residential purposes. If it is not used for residential purposes, then to C” RAP knocks out “then to C” and we are left with a fee simple determinable with a reversion in A.

“A to B on condition that the property is used for residential purposes. If the property isn’t, to C.” RAP knocks out the ‘to C’ so the thing is now there is no right of reentry spelled out in this FSSCS, so B gets it fee simple absolute. The condition that the property be used for residential purposes is a covenant by B and his heirs, if they don’t comply they can be sued for breach but will not lose the property.

Question 53

Steps for analyzing RAP

Answer 53

1. Is it one of the 5 interests that RAP applies to?
2. Can I create an interpretation under the facts that someone can be claiming under one of those interest more than 21 years after everyone currently alive is dead.
3. If no, it’s valid. If yes, it wipes out the future interest, cross it out and interpret accordingly.

Question 54

Joint Tenancy

Answer 54

A form of concurrent ownership where each co-tenant owns and undivided interest in the whole of the property AND has a right of suvivorship.

Question 55

Tenancy in Common

Answer 55

Form of concurrent ownership where each co-tenant owns an undivided interest in the whole of the property.

Question 56

Right of Survivorship - Common Law

Answer 56

A conveyance to two or more people to jointly own property was presumed to create a joint tenancy unless otherwise stated.

Question 57

Right of Survivorship - Modern Law

Answer 57

A conveyance to two or more people to jointly own property is presumed to create a Tenancy in Common unless specifically stated otherwise.

State otherwise by indicating that you want the key attribute of right of survivorship.

Question 58

Right of Survivorship

Answer 58

If one joint tenant survives, the surviving joint tenant(s) take that person’s interest. ROS takes precedence over anything else, including over a will.

Question 59

Joint Tenancy - 4 Unities (Common Law)

Answer 59

Time - requires that each JT ownership of the property had to vest at the same time.
Title - requires that each JT’s interest in the property must be created by the same instrument.
Interest - each JT must have an equal ownership interest in the property.
Possession - each JT must have an equal right to possess the property.

Question 60

Joint Tenancy Unities (Modern)

Answer 60

Only unities required are interest and possession.

Question 61

Tenancy in Common Unities

Answer 61

Only one required is possession - that each tenant in common have an equal right to posses the property. They can have unequal interests.

Question 62

Severing Joint Tenancy

Answer 62

Becomes tenancy in common. Done by an inter vivos act of one of the parties (cant be done by a will).

(1) Partition action - parties elect to file a partition action to sever the JT into a TIC. Severance wont occur until court rules on the action.
(2) One JT can sell his or her interest in the property. (In a jrdx that follows equitable conversion, severance occurs when the formation of the land sale conversion. In a jrdx that doesn’t, severance occurs upon the closing of the deal.
(3) One JT mortgages his or her interest in the property. (Lien Theory jrdx a mortgage is a lien, that’s majority view. Title theory a mortgage is viewed as granting title to real property. Lien will not sever JT.) The mortgage applies to the mortgagee’s interest in the property only.

Question 63

Tenancy by the Entirety

Answer 63

Only in some states. Special form of JT between husband and wife, and is presumed to arise anytime there’s a conveyance to a husband and wife of jointly owned property.

Severs when mutual agreement of the parties or if they divorce it’s automatically severed into TIC.

Question 64

Rights and Duties of Co-Tenants - POSSESSION

Answer 64

Each co-t is entitled to possess the whole property. A co-t denied possession can sue for damages caused by being prevented from the property and/or ejectment.

Question 65

Rights and Duties of Co-T’s - PROFITS

Answer 65

(1) If produced by one of the co-t’s efforts, no obligation to share profits with other co-t’s. However, if co-t has ousted the other co-t, then the person making the profits has to pay the other co-t a fair rental value for the property.
(2) If generated by what a third party is doing with the property (RENT) then each co-tenant is entitled to a proportionate share of the rent.

Question 66

Rights and Duties of Co-T’s - TAXES/MORTGAGES

Answer 66

(1) Taxes/mortgages - each co-t must pay proportionate share. If you have 1 co-t that is primarily in possession and one that’s not, the one who is has the initial obligation to make the payment, then can seek contribution from those not in primary possession.

Question 67

Rights and Duties of Co-T’s - REPAIRS

Answer 67

(2) Repairs - Absent some express statement ot the contrary, a co-t has no duty to repair jointly owned property, an no right to require contribution for repairs. HOWEVER, if it’s a rental property and a co-t makes a repair, they can offset the cost with the rent money before it is distributed to all the co-t’s.

Question 68

Rights and Duties of Co-T’s - IMPROVEMENTS

Answer 68

No obligation to improve jointly owned property absent an express statement to the contrary. However, if property is subsequently sold and the sale realizes a greater value because of the improvement, the greater value goes to the co-t who made the improvement.