Property 1 - Rights in Land/Classification of Estates Flashcards
3 Types of Fee Estates
- Absolute 2. Defeasible 3. Tail
Fee Simple Absolute
Best of the best. You and your heirs will own the property forever, no conditions or restrictions.
Common law language to create Fee Simple Absolute
“To x and his/her heirs.” Saying only ‘i leave it to x’ would only create a life estate.
Modern law way for creating Fee Simple Absolute.
Fee simple absolute is presumed. Only have to say, “I leave it to X”
Defeasible Estates
An estate that will terminate upon the happening of some occurrence or event.
Fee Simple Determinable
Whenever the grantor uses durational language; language that speaks to the duration the estate is to last. E.g. “so long as” “while” “until”
How does fee simple determinable terminate.
Automatically on the happening of a named future event.
Fee Simple Subject to Condition Subsequent
Whenever a grantor uses conditional language. NOT an automatic creation. E.g. “but if” “on condition that” “provided that”
3 Types of Present Estates
- Fee 2. Life 3. Term
Ambiguous language in Defeasible Estates
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.
Fee Simple Subject to Executory Interest
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.
Fee Tail - Common Law
Was an attempt to limit ownership of the property to lineal descendants of the grantee. You couldn’t transfer the property to a friend.
Fee Tail - Modern Law
Vast majority of jrdx have outlawed Fee Tail. If you see the language it would just be considered a Fee Simple Absolute.
Life Estate
A life estate lasts for the duration of someone’s life. Usually the life of the grantee. Can be made defeasible.
Life Estate per autre vie
A life estate where the measuring life is someone other than the grantee.
Term Estate
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.
Possibility of Reverter
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.
Creation of Possibility of Reverter
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.
Possibility of Reverter at Common Law
Could not be transferred inter vivos by the grantor. It could only pass to the grantor’s heirs by will or descent.
Possibility of Reverter under Modern Law
A majority of jrdx hold that a possibility of reverter can be transferred to anyone.
Right of Reentry (Power of Termination)
The reversionary interest that CAN be created in the grantor when the grantor attempts to hand out a Fee Simple on Condition Subsequent.
Creation of Right of Reentry
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.”
Exercising Right of Reentry
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.
Right of Reentry at Common Law
The RoR could not be transferred inter vivos, had to pass to your heirs either by will or descent.
Right of Reentry under Modern Law
Majority of jrdx allow free transfer of the RoR to anyone.
Reversion
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.
Executory Interest
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.
Shifting Executor Interest
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.
Springing Executory Interest
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.
Remainder
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.
Contingent Remainder
Any remainder that is not vested.
Vested Remainder
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.
Vested Remainder Subject to Condition Subsequent/Complete Divestment
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.
Vested Remainder Subject to Open/Partial Divestment
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.
Class Opening - Inter Vivos Conveyance
The class opens automatically on the making of the conveyance.
Class Opening - Testamentary Conveyance
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.
Class Closing - Rule of Convenience
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.
Doctrine of Worthier Title
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.
Waste
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.
Voluntary Waste
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.
Permissive Waste
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.
Ameliorative Waste
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.
Ameliorative Waste under Modern Law
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.
Suing for Past or Future Waste
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.
Restraints on Alienation
“A to B for life, but if B tries to sell his interest, then to C.”
Total Restraint on Alienation
“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.
Partial Restrain on Alienation
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.
Rule Against Perpetuities
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.”
Purpose of Rule Against Perpetuities
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.
Rule Against Perpetuities - Possibilities
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.
What Rule Against Perpetuities Applies To
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.
Examples of Rule Against Perpetuities
“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.
Steps for analyzing RAP
- Is it one of the 5 interests that RAP applies to?
- 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.
- If no, it’s valid. If yes, it wipes out the future interest, cross it out and interpret accordingly.
Joint Tenancy
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.
Tenancy in Common
Form of concurrent ownership where each co-tenant owns an undivided interest in the whole of the property.
Right of Survivorship - Common Law
A conveyance to two or more people to jointly own property was presumed to create a joint tenancy unless otherwise stated.
Right of Survivorship - Modern Law
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.
Right of Survivorship
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.
Joint Tenancy - 4 Unities (Common Law)
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.
Joint Tenancy Unities (Modern)
Only unities required are interest and possession.
Tenancy in Common Unities
Only one required is possession - that each tenant in common have an equal right to posses the property. They can have unequal interests.
Severing Joint Tenancy
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.
Tenancy by the Entirety
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.
Rights and Duties of Co-Tenants - POSSESSION
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.
Rights and Duties of Co-T’s - PROFITS
(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.
Rights and Duties of Co-T’s - TAXES/MORTGAGES
(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.
Rights and Duties of Co-T’s - REPAIRS
(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.
Rights and Duties of Co-T’s - IMPROVEMENTS
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.
