Property Flashcards
Tenants in common
two or more owners w/o the right of survivorship
Co-tenant own individual part+ right to possess whole
Devisable, descendible, alienable
joint tenants
two or more owners w/ right of survivorship
Right of survivorship
Non-probate asset: unless only remaining tenant: then it is All yours to do as you will
Four unities essential to a joint tenancy (PITT)
If 4 unities don’t exist, a joint tenancy is not created, instead a tenancy in common is created
If 4 unities exist at the time the joint tenacy is created but are later severed, the joint tenancy turns into a tenancy in common when the unities cease to exist (destruction of any unity by a tenant destroys joint tenancy for that tenant)
Have to be explicitly stated now: “ to A and B as joint tenants and not as tenants in common ( with the right of survivorship and not as tenants in common)”
Four unities essential to a joint tenancy (PITT)
Time:each joint tenant must be acquired or vest at the same time
Title: all joint tenants must acquire title by the same instrument or by a joint adverse possession. Joint tenancy can never arise by intestate succession or other act of law
Interest: all must have equal undivided shares and identical interest measured by duration ( same quantum)
Possession: each must have a right to possession of the whole ( one joint tenant can voluntarily give exclusive possession to the other joint tenant.
severance of Joint Tenancy
Sale: JT selss/transfers during lifetime
Partition
Voluntary: amicable end
Judicial:in kind ( physical division); forced sale (division of proceeds)
Mortgage
majority of states(lien theory): no severance
Minority of states ( titletheory): severance
tenancy by the entirety
can be created only in husband and wife, like joint tenancy in that the four unities plus a fifth ( unity of marriage) are required, and the surviving tenant has the right of survivorship
Neither husband nor wife can….
Defeat the right of survivorship of the other by a conveyance of a moiety to a third party
Acting alone have right to judicial partition of prop
Very protected form of co-ownership “ can’t touch this”
Creditors of only one spouse can’t touch tenancy for satisfaction of debt
Severance
Divorce terminates and tenancy in common forms
Death
Mutual agreement
Execution by a joint creditor of both spouses
rights and duties of co-tenants
Possession
No ouster ( wrongful exclusion from part/whole)
Rents and profits
None from co-tenant in exclusive possession (unless ouster)
Fair share if leased to 3rd party ( taxes, mortgages, etc)
Repairs
Contributions for reasonable necessary repairs w/ notice
Unilateral improvements
No contribution (credit at partition)
not commit waste
Types of waste
3 general categories of waste, impact of waste is economic waste
Affirmative waste(voluntary) : arising from voluntary acts, liability results from injurious acts (acts that substantially reduce the value of land)- some exceptions is mineral extraction
Permissive waste (neglect): arising from failure to act, negligence ( not paying taxes so land falls to forfeiture)
Ameliorative waste (unilateral change increasing value)- resulting from changes to the property, specifically changes that increase its value, by doing acts remainder or revision value cannot diminish
judicial partition
partition in kind preferred
forced sale allowed if fair/equitable physical division not possible
tenancy for years
Known fixed period of time
Termination automatic (on end date)
No notice needed to terminate
Writing typically needed if >1 year
periodic tenancy
Continues for successive intervals until properly terminated
express( L to T from month to month)
By implication
No mention of duration but rent at set intervals
Oral term of years violating SoF
Holdover tenant after lease ends
To terminate need notice
CL: at least equal to length of period
Month to month- 1 month
Week to week 1 week
Year to year: 1 month under restatement
tenancy at will
No fixed duration
Terminable at will of either party ( to T for as long as L or T desires
tenancy at sufference
T wrongfully holds over past lease expiration
L proceeds to recover rent
Terminates when L moves to evict or holds T to new tenancy
T’s duty to repair
if lease silent
Maintain premises
Make routine repairs
Not ordinary wear & tear repairs
Don’t commit waste
w/ express covenant
Maintain in good repair/condition
T may terminate if premises destroyed w/o T’s fault
Implied covent of quiet enjoyment (SING)
Breach by wrongful eviction: exclusion from whole or part of premises
Breach by constructive eviction: L renders premises unsuitable for occupancy
SI- substantial interference ( chronic/permanent problem)
N- notice ( T must notify L)
G- Goodbye/get out ( T must vacate)
implied warranty of habitability
Residential only
Premises must be fit for basic human habitation
Standard:case law and housing code
T’s options if L breaches ( MR3)
M- move
R-repair and deduct
R- reduce or withhold rent
R-remain & seek damages
Retaliatory eviction
L can’t terminate/penalize T in retaliation for T’s exercise of legal rights
implied warranty of habitability
Residential only
Premises must be fit for basic human habitation
Standard:case law and housing code
T’s options if L breaches ( MR3)
M- move
R-repair and deduct
R- reduce or withhold rent
R-remain & seek damages
Retaliatory eviction
L can’t terminate/penalize T in retaliation for T’s exercise of legal rights
fair housing act protected classes
Race, color, religion, sex, familial status, national origin, disabled person
Dwellings need not be made available to ppl whose condition would create a direct threat to the health and safety of others or result in substantial damage to prop, but landlords must try to make reasonable accommodations
Landlord: the burden shifts to the housing provider/property manager to show a legally sufficient justification. means substantial, legitimate, nondiscriminatory purpose
Tenant: the tenant or applicant must establish liability by proving that the legitimate justification could be achieved by another practice that has a less discriminatory effect
lease agreement types of privity
For a general rule:, a lease agreement gives rise to two distinct relationships b/n the LL and the original tenant privity of estate and privity of contract
Privity : denotes a voluntary transactional relationship b/n 2+ people or entities
Whether oral or in writing, the lease b/n the landlord and the original tenant amounts to a conveyance of a right of possession from former to the latter= creates privity of estates , tenant holds for the LL
(Imposes a duty on the parties to perform only the lease terms that are said to run with the land 2 duties/covenenants that runs with the land = promise to pay rent, promise to repair )
If lease contains promises by one party to the other = creates privity of contract
If neither privity of estate nor privity of contract exists b/n the LL and the other party, the LL may not hold the other party liable for the terms
assignment
transfer of all property rights dor durational period
Assignee T in privity of estate w/ L
Liable on covenants that run with land (rent and repair)
Original T in privity of K (but not estate) w/ L
Liable for original lease obligations
Sublease
transfer portion of property rights for durational period
T2 has no privity ( estate or K ) w/ L
T1 & T2 responsible to each other
Relationship b/n L and T1 remains intact
caveat lessee (tenant beware)
L has no duty to make premises safe
EXCEPTIONS (CLAPS)
C-common areas ( hallways,elevators, etc)
L-latent defects (L must warn of hidden defects)
A- assumption of repairs- liable if repair negligently
P-public use rule- (short lease, significant defect, liable
4 any defects that cause injury
S-short-term lease of furnished dwelling , T doesn’t
have ability/time to repair
easements
A grant of a nonpossessory prop interest that entitles its holder to some form of use or enjoyment of another’s land
Use for specified purpose
Presumed to be of perpetual duration unless grant specifically limits the interes
types of easments
affirmative= the right to go onto/do something on servient land
negative= can only be created expressly, prevent servient landowner from doing something that would otherwise be permissible (LASS)
L-light
A-air
S-support
S-stream water from an artificial flow
easement appurtenant
Benefits holder in use/enjoyment of own land
2 parcels
dominant= derives benefit
Servient: bears burden
Passes automatically with transfers if the dominant tenement , regardless of whether it is even mentioned in the conveyance
Burden of easement aoourtenant passes automatically w/ sevient estates
easement in gross
Holder has personal/commercial advantage unrelated to use/enjoyment of land
Servient land burdened
No benefited/ dominant tenement
Examples
Right to place a billboard on another’s lot
Right to swim in anothers pond
Utility company’s right to lay power lines on another’s lot
Not transferable unless it is for the commercial purposes
Creation of affirmative easement (PING)
P- prescription ( adverse possession
Continuous uninterrupted use
Open and notorious
Actual but not exclusive
Hostile
I- implication
Preexisting use/ quasi easement
N- necessity
G- grant
In writing signed by thee holder of the servient tenement ( unless outside SoF)
Termination of easement (END CRAMP)
E- estoppel
Oral expression of n intent to abandon an easement won’t terminate an easement unless its also committed to writing or accompanied by action
Servient owner materially changes positions in reliance
N- necessity
When need ends unless easement was reduced to an express grant
D- destruction ( of servient land)
C-condemnation ( of servient land by gov eminent domain power wi)
R-release ( by holder to servient owner)
A- abandonment( physical action, an intent to never use easement again )
M- merger ( easements & servient land held by same person)
Prescription ( by servient owner)
license
Mere privilege to enter another’s land for narrow/delineated purpose
Creation
No writing required
Freely revocable at will of licensor
Profit
Entitles holder to enter servient land & take some resource
Creation, termination,alienation(transfer) = same as easements
Can also be extinguished through surcharge
Surcharge = misuse that overly burdens the servient estate)
Restrictive covenants
Covenant =promise to do or not do something
negative / restrictive= refrain from doing something ( i promise not to build for commercial purposes)
Affirmative = do something related to land ( I promise to maintain our shared fence)
Distinguish by remedy
Money damages: construe as covenant at law
Injunction: construe in equity as equitable servitude
Requirements for Burden to Run (WITHN)
W- writing
I-intent
Intended that the covenant would run
T-touch & concern
Affecting parcel owner in her use of that parcel of land
Affirmative covenants touch & concern the nad if they require the holder of the servient estates to do something that increases her obligations in connection with the land
H-HOrizontal & vertical privity
Horizontal ( original parties to the arrangement, grantor- grantee relationship not just two people agreeing )
Requires they be in succession of estate
They shared some interest in the land independent of the covenant
Vertical ( b/n original party and a successor to their interest)
Some non-hostile nexus such as K, devise, or descent
N- Notice
Successor must have had notice of the promise when she took possession
Requirements for benefit to run (WITV)
W- writing
I-intent
T- touch & concern
V- Vertical privity
Equitable servitude
Promise equity will enforce against successors of burdened land (regardless of whether it runs with land at law)
Bar exam= indicate want injunctive relief= triggers this
creation of Equitable servitude (WITNES)
W-writing
I- Intent
T- touch &concern
N- Notice
ES- Equitable servitude
implied equitable servitude (reciprocal negative servitude)
Under common scheme doctrine, ct will imply a reciprocal negative servitude to hold the unrestricted lot holder to the promise
Common scheme doctrine
Scheme of development ( including D’s lot) when sales began
D had notice of promise when they took
Notice in 3 forms (AIR)
A- actual = literal knowledge
I- inquiry= lay of land, general observation
R- record= public docs
If scheme arises after some lots ate sold, no implied servitude
Must be from inception
Equitable Defenses to enforcement ( ct will not enforce equitable servitude if)
Neighborhood conditions have change
Person seeking enforcement violating similar restriction on nown land ( unclean hands)
Benefited party acquiesced in violation of sevituded by a burden party
Benefitted party acted in way that reasonable person would have abandoned covenant (estoppel)
Benefitted party fails to bring suit w/i reasonable time (laches)
Adverse possession
unconventional means to title of a real prop. Acquired by acting as an owner for a specified length of time under claim of right or color of title
Possession for statutorily prescribed time can ripen into title if elements met (OCEAN)
AP Elements (OCEAN/ All Horses Eat Old Corn)
Actual Possession- physically on the land in possession/control and using it in the nature of the land
Accrues that statute of limitation must file for ejection to get a person to leave the property as a trespasser before SOL is over and they claim AP
Hostile, Adverse and under claim of right- Hostile and under claim of title, on the land and using it w/o T.O’s permission as if it was their own
Exclusive Possession- Exercise dominion over prop, using land in a way that excludes other ( T.O, another AP, anyone on land W/O AP permission)
Open and Notorious- use land in a way to put reasonably attentive owners on notice (Constructive notice), an ordinary person would notice a person is present and using the land
Objective test used to decide constructive notice
Reflects the sleeping principle: purpose to penalize the negligent and dormant owner for sleeping upon his rights
Continuous for the statutory period- continuous, not constant, can come and go in the ordinary course given the nature of the prop in question so long as it is for the duration of the statutory period
Tacking
combine periods of time together to satisfy the time requirement for SoL if there is privity between APs
Privity looks at successive and mutual relationships (blood, lease, or service), is recognized by law
Ancestor-heir (blood, intestate)
Grantor-grantee (deed)
Devisor-devisee (will)
Testator-executor (will)
Assignor-assignee ( K/debt)
Donor-donee ( NC, deed of gift)
Leasor-leasee (§22-2)
Not Tacking if new AP forces out old AP or AP leaves w/ intent to relinquish claim (Abandonment)
exception Preventing AP
Nothing T.O. does w/ title after the AP enters on land will have any effect on AP except…
Someone has a future interest in the prop, “To A for life, then to B”
Future interest operative at death
Only AP from A, not B b/c B is not the owner yet so no SoL for ejectment yet, have to wait u ntil A dies to try and adversely possess B’s land
*Someone has mortgagee on land- no SoL until Bank foreclose
Surface and Mineral estates severed: house/ land on top of the surface has one owner, mineral in grounds below the surface has another owner
Disabilities: owner under disabilities at the time AP begins
Infancy, insanity, imprisonment= 3 “i”s in disabilities
All disabilities at the time of AP trying to begin must be removed + w/e SoL says
Governmental entity is the owner
Immuned from AP unless used in a proprietary capacity
conveyance
Two step process
Contract (conveys equitable title)
Closing (deed passes legal title)
SoF Applicable
K must be in writing
Signed by party against whom enforcement sought
Must also include
Identify parties
Describe prop
State consideration
part performance - conveyance
Allows buyer to enforce oral K by specific performance if
K is certain and clear and
Acts prove existence of contract
Acts usually satisfied by ⅔ of following
Buyer took possession
Buyer paid purchase price or significant portion
Buyer made substantial improvements
equitable conversion- conveyance
Legal title: deed (right to possess)
Equitable title: K (risk of loss)
Buyer bears risk unless K says otherwise
once K is signed and each party is entitled to specific performance , equity regards the Buyer as the owner of real prop and the seller’s rights to the proceeds of the sale is considered personal prop
If seller dies , takers of her real prop must transfer title at closing and the proceeds pass to the decendent’s takers of her personal property
marketable title - conveyance
seller’s implied promise to provide title reasonably free from doubt/threat of litigation on closing
Common defects that render title unmarketable are
Defects in record chain of title- most often adverse possession
Encumbrances (mortgages, liens,easements, restrictive covenants)
Zoning violations: existing zoning violation makes unmarketable
Title must be marketable on the day of closing
no false statements of material fact- conveyance
Seller liable for failure to disclose latent material defects
To be failure to disclose
Seller must know or have reason to know of defect
Seller must reliaze that the buyer is unlikely to discover the defects AND
Defect must be serious enough that the buyer would probably reconsider the purchase
Seller can disclaim specific types of defects to be held liable ( “ seller is not liable for any defects in the roof)
No implied Warranty of fitness or habitability
Buyer beware
EXCEPTION: sale of new home by builder
deeds
To pass title , must be “LEAD”: lawfully executed and delivered
Lawful execution requires
Writing signed by grantor
Unambiguous description
Identification of parties
Words of intent
No consideration needed
delivery requirement- conveyance
Legal standard testing grantor’s present intent (did they have present intent to be bound)
Delivery presumed if deed
Handed to grantee
Acknowledge by the grantor in front of a notaru or
Recorded
Rejection defeats delivery
Acceptance is presumed but if grante expressly rejects the deed, the deed is ineffective to pass title
Can be accomplished by delivery by third party if third party is an escrow agent
general warranty deed
warrants title against all defects in title whether t hey arose before or after the grantor took title
Grantor promises to warrant and defend grantee’s title against the lawful claims and demands of all persons whomsoever
Look at which covenant breached and then majority minority rule to see if remote grantee can sue
Majority: cannot sue for a present covenant only a future covenant
Minority: can sue for a present of future covenant
special warranty deed
contains warranties only against the grantor’s own acts but not the acts of the other
Defect is a mortgage on land executed by grantor’s predecessors, grantor not liable
Grantor limits his promise to defend grantee’s title against claims and demands of persons claiming an interest in the property ( by, through, or under the grantor)
quitclaim deed
contains no warranties of any kind, conveys whatever title the grantor has, if grantee takes nothing by deed, the grantee cannot sue the grantor
Do not contain any covenants or promises regarding title, nor do they purport to transfer any particular interest in the land
requirements for a valid deed
some consideration paid by the grantee in order to raise a presumption that the grantee is a bona fide purchaser entitled to the protection of the recording acts against prior unrecorded instruments
deed must contain a description of the parcel of land conveyed that locates the parcel by describing its boundaries
document under seal ( deed to land is effective when signed sealed and delivered
present covenants
covenant of seisin
covenant of right to convey
covenant against encumbrance
Present covenants broken if ever at time the deed is delivered, present covenants do not run with the land ( SoL starts at time of delivery of deed)
Either the grantor has ( title to prop, right to convey, an encumbrance) or he doesnt
covenant of seisin
grantor warrants that he owns the estate that he purports to convey (in fact owns the estate)
covenant of right to convey
grantor warrants that he has the right to convey the property ( in fact the person who is authorized/ has right to sign over )
covenant against encumberanace
the grantor warrants that there are no servitudes/liens encumbrances on the property at the time of the conveyance
Encumbrance: claim or liability attached to prop that may lessen its value; a prop right that is not an ownership interest
Easement
Mortgage
Judgment lien
GR: the existence of an encumbrance constitutes a breach of the covenant against encumbrances
future covenants
covenant of general warranty
covenant of quiet enjoyment
covenant of further assurances
Future covenant not breached until the grantee or his successor is evicted from the property, buys up the paramount claim, or is otherwise damaged
covenant of general warranty
the grantor warrants that he will defend against lawful claims and will compensate the grantee for any loss that the grantee may sustain by assertion of superior title
coveant of quiet enjoyment
the grantor warrants that the grantee will not be disturbed in possession and enjoyment of the property by persons assertion of superior title
covenant of further assurances
the grantor promises that he will execute any other documents required to perfect the title conveyed (if missed a page to sign will come back and sign it )
race recording statues
B wins if records properly before A
“ A conveyance of an estate in land shall not be valid against a subsequent purchaser for value unless the conveyance is first recorded
Notice recording statute
B wins if BFP when took (last BFP to take wins)
A conveyance of an interest in land shall not be valid a
gainst any subsequent purchaser for vale, without notice thereof, unless the conveyance is recorded
Race-notice recording statute
B wins if BFP and records properly before A
A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded
Bonafide Purchaser (BFP)
Purchaser (didn’t take by gift, will, inheritance)
Pay valuable consideration
Take w/o notice of prior conveyance
types of notice
Actual
B learns of A (literal knowledg)
Inquiry
B charged with what inspection would’ve revealed
Record
B on notice of deeds properlu recorded in chain of title
chain of title
Sequence of recorded documents capable of giving record notice to later takers
shelter rule
Anyone who takes from a BFP will prevail against any interest the BFP would’ve prevailed against
wild deed
Recorded deed that isn’t connected to chain of title (incapable of giving constructive notice)
estoppel by eed
Grantor purports to convey to grantee realty they don’t then own
Grantor later acquires title to the property
Title automatically vests in grantee
Grantor is estopped from enying validity of preacquisition conveyance
Watch out for BFP. early recording is outside chain of title
Mortgages (Purchase money mortgage cretion, transfer, liable)
Purchase money mortgage: lender’s security interest in real estate that their loan enables debtor to acquire
Mortgage creation
Debt (note)+ lien in land to secure debt (mortgage)
In writing (legal mortgage)
Transfer of interest
Oindorsing the note and delivering it to the transferee or
Executing a separate document of assignment
Recording statutes protect mortgagees
If recorde,mortgage sticks with the land
Whos personally liable on debt
If O (mortgagor) sells Blackacre to B:
B assumes mortgage: Both O and B liable
B takes subject to mortgage: only O, but if recorded, Blackacre can be foreclosed
Forclosure (effect on interests)
The land is sold, sale proceeds fo to satisfying the debt
Deed in lieu of foreclosure
Permits the mortgagee to take immediate possession w/o foreclosure sale
Since not an actual foreclosure it doesn’t operate to terminate any junior liens that may be present on the mortgaged real estate
Junior liens are paid off in order of their priority any remaining surplus goes to debtor
Effect of forclosure on interests
Junior interests terminated (paid in descending order from sale proceeds)
Necessary parties: all junior lienholders+debtor
Senior interests unaffected (buyer takes subject to them)
Priority of creditors
Creditor must record
First in time, first in right
Purchase money mortgage: first priority in parcel financed
equitable redemption
Debtor can redeem land prior to foreclosure sale by paying
Cut off by foreclosure sale
No clogging equity of redemption
Debtor cannot waive right to redeem in mortgage itself
zoning
Variance
Permission to depart from zoning restriction
Show undue hardship+ no diminution to neighboring property values
Nonconforming use
Previously allowed use cannot be eliminated all at once unless just compensation paid
Cumulative zoning
Land ranked and cateforized to create hierarchy of uses (single family home to highest use)
single family home
2 family home
apartment buildinging
striip mall
factory
Special use permit
Must be obtained even though zoning proper for intended use( hospitals, drive in
devisable
capable of passing by will
descendible
capable of passing y intestacy (no will)
alienable
capable of transfer inter vvivos (during lifetime)
fee simple absolute
“To A “ or “to A and his heirs”
A living person has no heirs, only have heirs apparent ( they have no power)
Potentially limitless duration
Devisable,descendible, alienable
fee simple determinable
Terminates automatically on happening of stated event created by clear durational language: “so long as”, “while”, “during””until”
devisable , descendible, alienable
Always subject to the condition
If prescribed condition happens automatically reverts to grantor
Reverter to grantor only future interest
fee simple subject to condition subsequent
Use of conditional language+ explicit right to re-enter
No automatic termination (grantor exercises it prerogative/ option to choose to terminate)
fee simple subject to condition subsequent
Use of conditional language+ explicit right to re-enter
No automatic termination (grantor exercises it prerogative/ option to choose to terminate)
fee simple subject to executory interest
To A but if X event occurs, then to B
Third party, not grantor, takes if condition betrayed
Forfeiture automatic
Rules of construction
Words of mere desire, hope, intention don’t create defeasible fee
Absolute restraints on alienation are void
life estate
Measured in lifetime terms (not in term sof years)
“To A for life” (A=life tenant)
duration= for the life of a person
Pur Autr vie- “ for the life of another”
Life tenant’s rights and duties
Life tenant may alter or demolish buildings if
Market value of future interests is not diminished and either
The remaindermen do not object or substantial and permanent change in the neighborhood conditions hasdeprived prop in its current form of reasonable productivity or usefulness
life tenant’s rights and duties
All ordinary uses and profits from land
Don’t commit waste
Voluntary:actual overt conduct causing drop in value
GR: life tenant can’t consume or exploit natural resources on prop
some exceptions is open mine doctrine: if mining done on the land prior to the LE, the life tenant can continue mining but is limited to the mines already open
Permissive: failure to make reasonable measures to protect land (neglect)
ameliorative : change that benefits the property economicallyLife tenant may alter or demolish buildings if
Market value of future interests is not diminished and either
The remaindermen do not object or substantial and permanent change in the neighborhood conditions hasdeprived prop in its current form of reasonable productivity or usefulness
future interest in grantor
Possibility of reverter
Accompanies fee simple determinable
Right of entry/power of termination
Accompanies fee simple subject to condition subsequent
Reversion
Accompanies when grantor conveys estate of lesser duration
life estate, term for yrs
Future interest in 3rd parties : remainders ( tytpes
Possession on natural expiration of preceding estate ( life estate or term of years)
“To A for life, then to B” (A=life tenant; B=remainderman)
Contingent: taker as yet unascertainable or subject to the condition precedent
Condition precedent: appears before language introducing you to remaindermen
vested: ascertainable , strongest remainder, guaranteed to get previous estate after prior has terminated
Ready to become possessory whenever and however all preceding estates expire no condition precedent
Condition subsequent= appears after language that, alone and set off by commas, creates remainder
types of vested remainder
Indefeasibly vested- remainder certain of becoming possessory in the future & cant be divested
Vested remainder subject to open ( subject to partial divestment)
Has a condition subsequent
Open to a class ( can stll be added, siblings, children, some group)
“ to A for life, then to B’s children
B’s children= class
Rule of convenience: class closes when any member can demand possession of property= closes at either A or B’s death
Womb rule: if in womb when A or B dies they are included in class
Vested Remainder subject to complete defeasance
Subject to condition subsequent
Grantee faces the possibility of being divested at future date if condition subsequent is not satisfied
Typically followed by executory interest
“But if” language
“O to A for life, then to B; but if B gets a tattoo, to C
abolished doctrines on remainders
Rule in Shelly case
Doctrine of worthier title
future interest in 3rd parties: executory interests
Cut short prior taker
Shifting: follows defeasible fee, cuts short someone other than grantor
Shifting (fwd to another grantee)- divesting another grantee
Sprining: cuts short grantor
Springing (backward to grantor)- divests the transferor
Rule against perpetuities
Certain future interests are void if there’s any possibility they might vest more than 21 years after a person alive at the time of the grant has died
Basic concept: if at time interest created the interest can/might vest in interest too remotely it is voided
Mechanics of the rule
1) determine if future interest subject to Rule
Applies only to interest not vested at time of the conveyance that creates them ( don’t apply to present possessory estates)
Applies to 3 interest: contingent remainders, executory interests, and class gifts ( vested remainders subject to open)
2) what has to happen for future interest holder to take
3) find measuring life
Validating Life: person found who will enable proof that contingent interest wil vest or fail w/i life, or at death of that person or w/i 21 years after that person’s death
Look for persons who lives are causually connected w/ the vesting or termination of the interest ( can effect condition)
Must be alive in being at time interest created including those en ventre sa mere
4) determine if given interest might not vest w/i the perpetuity period “ lives being in 21 years”
Prove contingent interest is certain to vest or terminate no later than 21 years after death or some person alive at the creation of the interest
common RAP traps
Executory interests w/o time limit
Age contingency beyond age 21 in an open class
Unborn widow
Don’t know who will be married to at time of death
Fertile octogenarian
Gift to grandchildren
Slothful executor
Transfer based on probate of will
Reform of RAP
Wait and see statute: validity determined per facts as they come to be,
Basis of facts existing at the end of the life estate rather than at the creation of the interest
USRAP: provides alternative 90-year vesting period
Cy pres: court can redraft “ as near as possible” to grantor’s intent
Restraints on alienation
Disabiling
Absolute ban on transfer= void
forfeiture= attempted transfer forfeits interest= valid if reasonable/time limited
promissory= attempted transfer breaches covenant= valid if reaosnable/time limited
discriminatory= based on race, religion,ethnicity= void
An absolute restraint on the power to sell or transfer is repugnant to public policy and thus void
The prohibition against restraints on alienation will not extend itself to restraints on the power to sell or transfer that are reasonable in their nature and purpose and time limited
If a senior mortgage is modified
a junior mortgage prevails over the modification if the modification materially prejudices the holder of the junior mortgage, If prejudice then order of priority changes and Jr has priority over Sr’s
Prejudice if
Increasing the amount of principal; or
Increasing the interest rate
Do not prejudice if
Extension of the mortgage maturity date
Rescheduling installment payments
