PROPERTY Flashcards
FEE SIMPLE
1) Fee simple absolute has no future interest.
2) If it’s an ambiguous grant, then presume fee simple.
3) TRIGGERS: “his/her heirs” or “to A”
FEE SIMPLE DETERMINABLE – durational
a) Terminates automatically upon the happening of the event and passes to grantor.
b) Trigger: “so long as”, “while”, “during”, “until”
c) Future Interest = Possibility of reverter (grantor) or Executory (third-party)
FEE SIMPLE SUBJECT TO CONDITION SUBSEQUENT – conditional
a) When the condition occurs, the grantor can exercise a right of re-entry
b) Trigger: “but if”, “provided that”, “on the condition”
c) Future interest = right to terminate (Grantor),
FEE SIMPLE SUBJECT TO AN EXECUTORY INTEREST – 3rd party involved
a) A present fee simple that is limited by specific conditional language
i) Third party – has an executor interest
b) Trigger: “provided that”, “on condition that”, “but if”
c) Automatic ends and passes to a third party
LIFE ESTATE
a) A present possessor estate fully transferable during life
i) Pure autre vie – measured by someone else’s life.
b) Trigger: “A for Life”
c) Ownership terminates upon the end of the measuring life
d) Defeasible life estate – may be cut short by specified event
i) “but if B remarries, then to C”
Life tenant rights
i) Profit – right to take natural resources from land. Express or implied.
ii) Possess the property
iii) Right to lease property and keep the rent generated from lease.
iv) Sell only if future interest holders agree to sale.
v) Mortgage his interest in the property.
Life tenant obligations:
i) Pay property taxes but to the extent the life tenant receives a financial benefit from property
(1) occupies the property – fair market rental value of the property or
(a) If taxes are less than fair market value – can only recover those
(2) does not occupy the property – income derived from the land
ii) Pay mortgage of the property – can be allocated between current tenant and future interest
(1) Requires only the periodic payment of interest until the principal amount is due, the life tenant is responsible for such interest payments.
(2) Requires periodic payment of both interest and principal, the payment obligation is allocated between the life tenant and future estate holder based on the present value of each interest.
FUTURE INTEREST
1) Reversion - held by grantor who grants a life estate or estate for years but does not convey the remaining future interest to a third party.
2) Possibility of Reverter - retained by a grantor when a fee simple determinable is conveyed.
3) Right of Reentry - retained by grantor after a fee simple subject to a condition subsequent is granted.
4) Remainder - future interest created in a grantee that is capable of becoming an estate that is presently possessory upon the natural expiration of a prior estate (e.g., a life estate, estate for years) that is created in the same conveyance in which the remainder is created.
a. Vested—not subject to any condition’s precedent, ascertainable grantee
i. Vested remainder subject to open - at least one class member can take possession at the time of the conveyance however, their share can be decreased by additional takers not yet ascertained.
ii. Vested remainder subject to complete divestment—occurrence of a condition subsequent will completely divest the remainder
b. Contingent created in an unascertainable grantee or is subject to an express condition precedent
5) Executory Interest - Future interest in a third party
a. Shifting Executory Interest – one grantee to another on the happening of the condition.
i. Following a fee simple determinable – executory interest
b. Springing – divests the grantor
Doctrine of Worthier Title
Prevents remainders in a grantor’s heirs. Creates presumption of reversion to grantor.
Rule in Shelley’s Case
Prevents remainders in grantee’s heirs, creates a fee simple absolute.
RULES AGAINST PERPETUITIES (RAP)
AFFECTED FUTURE INTEREST
1) Contingent remainders
2) Vest remainders subject to open – Class gifts
3) Executory interests
4) Rights of first refusal and options unless they arise in commercial transactions
MEASURING LIVES
1) Relevant life: Someone who affects vesting (mentioned usually)
2) Validating life: Person who tells us whether the interest will vest within 21 years.
VIOLATIONS - Strike out interest that violates RAP as if never created and re-read.
SPECIAL RULES:
1) Class gifts - If gift void to any member under RAP, then void to ALL.
2) Exceptions to Class Gift Rule – All or nothing not applicable
a. Transfer of a specific dollar amount to each class member and/or
b. Transfer to a sub-class that vests at a specific time
i. EX: to the children of B, and upon the death of each, to that child’s issue.
3) Rule of convenience – class gift is not invalidated under RAP if one member of the class is entitled to immediate possession then class closes at the death.
RAP INAPPLICABLE WHEN ITS:
1) One charity to another charity.
2) Options
a. Held by a current tenant to purchase a fee interest in the leasehold property OR
b. In a commercial transaction.
COMMON VIOLATIONS
1) Survival beyond age 21
2) Unborn spouse
3) Capable of having more children
4) Defeasible fee followed by an executory interest
WAIT AND SEE APPROACH – UNIFORM STATUTORY RAP
Wait and see if interest will fail or vest during within 90 years after creation.
CY PRES - Equitable doctrine that allows a court to reform a transfer to avoid RAP.
TENANCY IN COMMON
1) Two or more co-owner have separate but undivided interest in the property.
2) Requires Unity of Possession – ONLY
JOINT TENANCY (JT)
1) Two+ individuals own property with the right of survivorship, surviving joint tenants automatically take the deceased tenant’s interest.
2) Creation – Grantor must make a clear expression of intent AND survivorship language
a. Four Unities – PITT
i. Possession –equal right to possess the whole of the property.
ii. Interest – equal share of the same type of interest.
iii. Time – must receive their interest at the same time.
iv. Title –must receive their interest in the same instrument of the time.
b. Failure to meet one above THEN JT in common. Severed.
SEVERANCE
1) Inter vivos transfer – converts the conveying interest into a TIC, the remainder parties remain JT.
2) Sale – don’t need to consent, severs JT as to sale but JT of non-transferors remains intact.
3) Mortgage – severs under title theory, but not under lien theory
4) Judicial lien - typically will not sever; severeness occurs when property levied and sold
a. Any lien against a JT’s interest terminates upon death
5) Leases – some say severs the JT others say temporary suspension.
TENANCY BY THE ENTIRETY (TBE)
1) Joint tenancy between married people with right of survivorship
2) Requires FOUR UNITIES (see above) PLUS marriage (unity of person).
3) Divorce terminates TBE.
4) Requires spousal consent to alienate or encumber their shares.
5) Creation - Requires clear wording “tenancy by entirety with right of survivorship”
6) Can only voluntary partion
