Property Flashcards
Defeasible Fee
Fee Simple Estate of potentially infinite duration that can be terminated upon the occurrence of some specified event
Requires clear words of intent for the fee to be forfeited (i.e. “Desire, hope, aspire” are insufficient)
3 types:
(1) Fee Simple Determinable
(2) Fee Simple Subject to Condition Subsequent
(3) Fee Simple Subject to an Executory Interest
Fee Simple Determinable
Fee Simple BUT … Property automatically reverts back to the grantor upon the happening of a given event
e.g. “To A for so long as X”
Characteristics:
(1) Automatic Forfeiture upon occurrence
(2) Potential infinite duration
(3) Transferable fee estate (subject to the condition)
Accompanying future interest = possibility of reverter (TO GRANTOR) which is transferable inter vivos and intestate
Fee Simple Subject to Condition Subsequent
Fee Simple BUT … Grantor retains power (i.e. right to take action) to terminate grantee’s estate.
e.g. “To A, but if he X, grantor reserves right to reenter”
Characteristics:
(1) Forfeiture NOT automatic [Main distinguish]
(2) Potentially infinite
(3) Transferable
Accompanying future interest = right of reentry (TO GRANTOR) which is NOT transferable inter vivos but is intestate.
Fee Simple Subject to an Executory Interest
Fee Simple BUT … Property automatically transfers to a third party (i.e. someone other than grantor) upon the happening of a given event.
e.g. “To A, but if X, then to B.”
Characteristics: Same as Fee Simple Determinable BUT transfers to B instead of O.
Accompanying future interest = shifting executory interest (retained by third party) which is fully alienable.
Life Estate
An interest that lasts only for the life of the interest holder. The Life Tenant has all ownership rights but must maintain property, make reasonable repairs and cannot commit waste. Can be defeasible or indefeasible.
e.g. “To A for life”
Accompanying future interest = reversion or remainder.
Reversion (Life Estate)
future interest in grantor when a life estate does not provide for disposition of property to a third party.
e.g. “To A for life.”
Remainder (Life Estate)
future interest following a life estate that identifies a third person.
e.g. “To A for life, then to B”
Categories of remainders:
(1) Vested Remainders: Indefeasible; Subject to total divestment; subject to open
(2) Contingent remainders: condition precedent to the future interest becoming possessory; future interest vests in an unascertained taker
Life Estate Pur Autre Vie
a life estate measured by the life of someone other than Life Tenant.
e.g. “To A for the life of B”
Transferring Life Estate the same (e.g. “A, the LT, transfers to B” which will revert to O when A dies.)
Doctrine of Waste
A Lt cannot commit acts that constitute an unreasonable use of land and/or injure the interests of a future interest holder.
Three types of waste:
(1) Aff mative (voluntary) waste
(2) Permissive Waste
(3) Ameliorative Waste
Voluntary Waste
LT cannot consume or exploit natural resources on the land EXCEPT:
(1) Where necessary for repairs/maintenance of land
(2) When grant expressly give that right
(3) If land was used for exploitation of resources prior to the grant.
Open Mines Doctrine - if exploitation occurred before life estate, LT may only extract from already-open mines.
Permissive Waste
harm to property due to LT neglect.
LT has a duty to repair/maintain property up to the extent of income or profits derived from the land or its rental value.
Includes paying taxes, interest on encumbrances, etc.
Future interest holders who assume LT’s obligations are entitled to reimbursement.
Ameliorative Waste
LT acts that economically benefit the land prohibited under common law, but now usually permitted in most modern jurisdictions
Vested Remainder
a remainder that automatically becomes possessory upon the natural expiration of the preceding estate.
Limitations:
(1) Cannot be subject to any condition precedent; or
(2) Vest in an unknown or unascertained person
Indefeasibly Vested Remainder
becomes possessory immediately upon termination of the prior estate
e.g. To A for Life, then to B
Vested remainder subject to total divestment
subject to some condition subsequent such that the remainderman could be divested after taking possession
e.g. to A for life, remainder to B; but if X, to C”
Vested Remainder subject to open (class gift)
remainder vested in a described class of takers, at least one of whom is capable of taking possession (by virtue of being alive)
e.g. to A for life, remainder to children of B and their heirs
B has one child, who has a vested remainder subject to open because B may have more children
Class remains open UNTIL life tenant dies or whenever any member can call for distribution of her share.
Contingent Remainder
a remainder will be contingent if it is either:
(1) subject to a condition precedent, or
(2) created in favor of an unascertained or unborn person
Contingent Remainder Subject to Condition Precedent
remainder’s taking is contingent on the prior occurrence of some event or condition that, once occurred, will automatically become an indefeasibly vested remainder.
e.g. To a for life, then to b and his heirs when B gets married.
B has a contingent remainder and grantor has a reversion if B is not married when A dies.
Contingent Remainder Subject to Unborn or Unascertained Persons
A remainder created in favor of unborn or unascertained persons that is contingent upon the grantee being born/ascertained.
e.g. “To A for life, then to B’s heirs”
If B has no heirs at the time of A’s death it would revert to Grantor.
Rule of Destructibility
at common law, a contingent remainder is destroyed if it remains contingent when the preceding estate ends.
e.g. “To A for life, then to B once he goes to law school”
If B has not gone to law school when A dies then upon A’s death B gets nothing
The modern rule gives a reversion to grantor/grantor’s estate UNTIL B satisfies the condition
Merger (Shelley’s Rule)
arises when a conveyance attempts to give a life estate to grantee with, a remainder to grantee’s intestate heirs
e.g. “To A for life, then To A’s heirs” and A is alive; at common law, remainder merges and A has a fee simple absolute
Modern Rule - A has a life estate and his heirs have contingent remainders; O has reversion b/c/ A could die without heirs.
Doctrine of worthier title
arises when the grantor creates a life estate in another but creates a future interest in the grantor’s heirs
e.g. “O to A for life, then to O’s heirs”
O’s heir’s contingent remainder is void. O has the reversion.
Executory Interest
a future interest in a third party that takes effect by cutting short some interest.
Includes any future interest that is NOT a remainder.
“but if… then to… for so long as… etc”
Executory Interest holders lack standing to sue for waste.
Fully Transferable, devisbale, descendible.
Shifting Executory Interest
always follows a defeasible fee or vested remainder subject to total divestment. Cuts short someone other than the grantor.
e.g. To A, so long as X, but if X, then to B.
A has a fee simple subject to executory interest
B has a shifting executor interest
Springing Executory Interest
cuts short a present interest held by the grantor or grantor’s estate
e.g. To A, if X.
A has the executor interest
Grantor has a fee simple subject to an executor interest.
Rule Against Perpetuities
No property interest is valid unless it must vest, if at all, no later than 21 years after the death of a life in being at the time thee interest was created.
i.e. a future interest is void if there is any possibility no matter how remote that it will vest more than 21 years after the death of the measuring life.
(1) Determine interest being granted
(2) Apply RAP to any future interest that is a contingent remainder, an open class gift, or an executory interest
(3) If conveyance violated RAP, strike only the violating future interest.
Note that modern reform laws have expanded period beyond 21 years.
Rights of First Refusal & Rap
Contingent interest in property (i.e., options and rights of first refusal) violate RAP if they could possibly be exercised outside the time period allowed by RAP.
Class Gifts & RAP
for class gifts to satisfy RAP, class must be closed with all conditions precedent satisfied for every member
Examples of RAP violations
Age contingency beyond 21 - The conveyance open class is contingent on members reaching an age over 21
Fertile Octogenarian - presumption that any woman is capable of giving birth, regardless of her age or condition
Charity to Charity Expcetion - RAP does not apply
Tenancy In Common
Estate with multiple tenants in which each co-tenant owns a distinct, undivided interest and each has a right to possession of the entire estate.
Characteristics:
(1) Each interest is freely transferable
(2) Each interest can be individually leased for rent (but co-tenants have a right to rents)
(3) No survivorship rights in Co-tenants
(4) Partition can be sought in dispute; if not possible forced liquidation
Joint Tenancy
Four concurrent conditions necessary for the creation:
(1) TIME - JT take interests at the same time
(2) TITLE - JT receive conveyance through the same instrument
(3) INTEREST - JT must take equal and identical interest
(4) POSSESSION - JT must have equal possessory rights
Grantor must expressly intend to create JT.
JT’s possess a right of survivorship (automatic possession at death)
Severance and Transfer of Joint Tenancy Interests
JT is alienable but not advisable or descendible.
Severance by any JT creates a TIC with respect to the severed interest.
Transfer also creates a TIC upon transfer (with any remaining JTs).
Mortgage Lien Theory (MAJORITY) - JT can take a mortgage on her interest without severing (because no title passes)
Mortgage Title Theory (MINORITY) - JT is severed upon any JT taking a mortgage on her interest because title passes to the mortgagee
Tenancy by the Entirety
Marital estate that is similar to a Joint Tenancy.
Created by conveyance to a married couple requiring the same four conditions as a JT. (Presumed)
Characteristics:
(1) Right of survivorship
(2) No right to convey or partition
(3) Protected from creditors to one spouse (not joint creditors)
Severed by death, divorce, foreclosure.
Co-Tenant’s Rights & Duties
(1) Possession of the whole
(2) Share of rents/profits derived from third parties use of land
(3) Protection from Adverse Possession (unless ousted)
(4) Fair apportionment of carrying costs, repairs
(5) Credit for individual improvements that add value; liability for improvements that subtract value
(6) Actions for waste can be brought against co-tenants
(7) Partition/Sale - Partition first, if not, sale
Leasehold Estates
An estate in which the tenant has a present possessor property interest and the landlord has a future interest (reversion)
(1) Tenancy for years
(2) Periodic Tenancy
(3) Tenancy at will
(4) Tenancy at sufferance
Tenancy for Years
It lasts for a fixed period of time, requiring a definitive beginning and end date.
If it lasts longer than one year it must be in writing.
Terminates automatically with no notice requirement.
Periodic Tenancy
A leasehold that is continuous for successive intervals until either party gives notice of termination (e.g. MONTH TO MONTH)
Creation can be express (conveyed), implied (provides for rent intervals) or by operation of law.
Operation of Law
(1) Invalid Lease + Landlord acceptance of Payment
(2) Holdover tenant + Landlord acceptance of Payment
Tenant must be given proper notice upon Termination which requires (1) sufficient time - typically a period and (2) effective date - typically the end of the period
Tenancy at Will
A tenancy with no fixed duration, terminable by either party at any time without notice.
Must be created by express agreement (otherwise implied periodic tenancy)
Termination at will OR by operation of law (death, waste, assignment, transfer of title, lease to 3rd party)
Tenancy at Sufferance
A default tenancy arises when a tenant continues to possess property after the lease expires (i.e. a holdover tenant)
Landlord options:
(1) Sue to evict, or
(2) Impose a new period tenancy (can demand higher rent if notice given prior to lease expiration)
Exception: the new imposed periodic tenancy must be REASONABLE (possession a few hours beyond would be unreasonable, or tenant is not at fault)
Tenant’s Duties at Common Law
Duty to Repair
Duty to pay Rent
Duty to not use property for illegal purposes
Liability to third parties (in tort)
Tenant’s Duty to Repair
Largely modified by lease terms:
(1) Maintain premises
(2) Make ordinary repairs
(3) Do not commit waste
(4) Destruction of Property (Common Law - tenant held liable for any loss, Modern Law - tenant can terminate lease)
Fixtures
Once-movable chattel that is annexed (i.e. affixed) to real property such that it becomes part of the realty
Pass with the ownership of the land unless life tenant’s rep removes annexed chattel within a reasonable time after life tenant’s death
Determining when a Chattel becomes a Fixture
Intent Controls (annexor’s)
Chattel is integrated into a structure (like walls)
Landlord/Tenant Agreements (if exist)
Removing fixtures before lease that tenant installed is OK; but doing so imperssibly = waste.
Landlord Remedies to Tenant Breach
Tenant Retains Possession?
File notice of eviction or continue the lease and sue for rent due.
Tenant Abandons?
Treat as surrender; ignore holding tenant liable for unpaid rent (minority); re-let to new tenants holding breached liable for any losses (majority)
NO SELF HELP!
Return Security Deposit net damages
Retaliatory Evictions to lawful house code reports is unlawful.
Landlord Duties & Warranties
(1) Duty to deliver possession on first day of lease
Majority is ACTUAL possession / Minority is LEGAL possession (i.e. new tenant must evict holdover)
(2) Implied covenant of quiet enjoyment
(3) Implied warranty of habitability
(4) Tort Liability
Implied Covenant of Quiet Enjoyment
A tenant has an implied right to quiet use and enjoyment of the premises, without interference from the landlord
Breach may occur by actual or constructive eviction, by landlord’s wrongful conduct causing loss of the use by tenant
Constructive Eviction
landlord’s actions or inactions render the property uninhabitable or unusable:
Elements:
(1) Breach of duty
(2) Substantial interference (major problems) caused by landlord’s wrongful conduct
(3) Notice to Landlord by tenant + Reasonable opportunity to repair
(4) Vacate by Tenant within reasonable time after failure to repair
Implied Warranty of Habitability
Residential property must be fit for basic human dwelling
Characteristics
(1) Residential only
(2) Absolute duty (cannot be modified by lease terms)
e.g. no heat in winter
Tenants remedies after notice:
(1) Move
(2) Repair + deduct
(3) Withhold Rent
($) Remain + damages
Landlord Tort Liability to Tenant
(1) Common Areas - Duty of Reasonable Care
(2) Latent defects - Duty to Disclose
(3) Assumption of Repairs - negligence standard
(4) Public Use - known defects that tenant is unlikely to repair
(5) Short Term / Seasonal Furnished - all defects that cause harm
Assignment
Unless restricted in terms of lease, the tenant may assign/sublease
Entire leasehold transfers from tenant to assignee.
Assignee is in privity of estate with landlord and the two are bound by all covenants that run with the land
Assignor remains in privity of contract with the landlord
Assignee owes rent directly to landlord but assignor remains liable for unpaid rent unless expressly released via ovation.
Subleases
Unless restricted in terms of lease, the tenant may assign/sublease.
Sublease is a partial leasehold transfer to sublessor to sublessee
Sublessor is in privity of estate and contract with landlord
Sublesses pays rent to sublessor as her tenant and is not liable to landlord for rent and is not bound by any lease covenants unless expressly assumed
