Property Flashcards
How may real property be transferred
By sale
By gift
By devise
By intestate succession
What is a fee simple absolute
It is absolute ownership of potentially indefinite duration, is freely alienable, and has no accompanying future interest
Most common form of ownership \
Conveyances that are ambiguous are now considered fee simple
Only terminates if the owner dies intestate without heirs
Examples: “to B and his heirs” “to B”
What is a fee simple determinable
A present fee simple estate that is limited by specific durational language such that it terminates automatically upon the happening of a stated condition and full ownership of the property is returned to the grantor
Make sure it is limiting the duration and not just the purpose
Examples: “so long as” “while” “during” “until”
It is freely alienable, devisable, and descendible but always subject to the stated condition
What is a possibility of reverter
It is the future interest of a grantor who grants a fee simple determinable that automatically reverts ownership to the grantor if the stated occurrence in the fee simple determinable
It is freely alienable by the grantor, both during his life and upon his death
A conveys Blackacre “to B and his heirs, until B gets married.”
What is a fee simple subject to a condition subsequent
It is a present fee simple that is limited in duration by specific conditional language
Look for “provided that” “on condition that” “but if”
Freely alienable by the owner during his life, and upon his death it is devisable and descendible
Termination is not automatic so that upon occurrence of the stated condition, the present fee simple will terminate only if the grantor affirmatively demonstrates intent to terminate
What is a right of reentry
The grantor’s future interest in a fee simple subject to condition subsequent that allows him to terminate the fee simple if the condition subsequent occurs
It is devisable and descendible upon death of grantor but cannot be transferred during grantor’s life
A conveys Blackacre “to be and his heirs, but if B gets married then A can reenter Blackacre.”
What is a fee simple subject to an executory interest
A present fee simple estate that is limited in duration by either conditional language or durational language, such that it will terminate upon the occurrence of the specified condition, and title will pass to a third party
It terminates automatically upon the condition occurring
The third party holds an executory interest
A conveys Blackacre to B as long as the property is used as a hospital, then to C.
What is a life estate
A present possessory estate that is limited in duration by life
“To B for life”
Upon the death of the grantee title reverts back to the grantor.
What future interest does a grantor have in a life estate
A reversion unless the conveyance specifies that somebody else is going to receive title, in which case that other person’s future interest is a remainder.
“To B for life.” gives grantor a reversion
“To B for life, and then to C” gives a future interest of a remainder to C
Life estate is not subject to the Rules Against Perpetuities
Can a life estate be transferred
A life estate is fully transferable during the life of the person whom the life estate is measured but it is not devisable or descendible since it terminates at the death of the person whose life is measured
What is a “life estate pur autre vie”
A life estate that is measured by the life of a third party
A conveys Blackacre to “B for for the life of C”
Doctrine of waste
The rights of a holder of any state except a fee simple may be limited by the doctrine of waste which allows any remainderman or grantor with a reversionary interest to enter upon the land to inspect for waste and seek an injunction to prevent waste
There are three kinds of waste: Affirmative waste, permissive waste, and ameliorative waste
What is affirmative waste
Waste caused by voluntary overt conduct that causes a decrease in the value of the property
Exceptions for the exploitation of minerals and timber if such use was authorized by the grantor, was in effect at the time the tenancy began, or is necessary to maintain the property
What is permissive waste
The result of neglect, a failure to keep up the property, or a failure to reasonably protect the property
What is ameliorative waste
A special situation where a life tenant or another person in possession changes the use of the property increasing its value
At common law, a life tenant was forbidden from making changes to the property’s value unless all future interest holders knew and consented
Modern law allows tenants to physically alter structures on the property when necessary to make reasonable use of the property
What remedies is available for waste
The holder of the vested remainder may bring suit for damages, and either a vested or contingent remainder holder may bring suit for an injunction
What is a concurrent estate
Ownership or possession of real property by two or more person simultaneously
What are the different concurrent estates
- Tenancy in common
- Joint tenants
- tenancy by the entirety
What is a tenancy in common
Any tenancy with two or more grantees where the tenants have equal right to possess or use the property and no right of survivorship exists
Each tenant can devise or freely transfer his interest to anyone
A tenant in common may also transfer his interest to another by a lease but the other tenants in common are entitled to share possession with the lessee and to receive a share of the rental profits from the lessor-tenant in common
What is a joint tenancy
A joint tenancy exists when two or more individuals own property with the right of survivorship
What is a right of survivorship in a joint tenancy
Upon the death of a joint tenant, the interest terminates and automatically goes to the surviving joint tenants
What four things are required for a joint tenancy to be created
The joint tenancy must be created with each point tenant having an equal right to possess or use the property, with each interest equal to the others, at the same time, and in the same instrument
PITT
- unity of Possession
- unity of Interest
- unity of Time
- unity of Title
Can a joint tenancy interest be transferred
It cannot be devised but a joint tenant can convey all or part of their individual interests during their lifetimes to a third party, thereby severing the joint tenancy
What effect does a severance have on remaining joint tenants
One a joint tenancy interest has been transferred inter vivos, the right of survivorship to that interest is destroyed and converted to a tenancy in common but if it is a conveyance by only one of more than two joint tenants then the joint tenancy of the remaining joints tenants is not destroyed
What affect does a mortgage have on a joint tenancy
In a lien theory state, the mortgage is only a lien on the property and does not sever the joint tenancy absent a default and foreclosure sale (Majority view)
In a title theory state, the mortgage severs title, and the tenancy between the joint tenants and creditor is converted into a tenancy in common
What affect does a lease have on a joint tenancy
Some jurisdictions hold that the lease destroys the unity of interest and thus severs the joint tenancy, while others hold that the lease merely temporarily suspends the joint tenancy, which would resume upon expiration of the lease
What is a tenancy by the entirety
Tenancy by the entirety is a joint tenancy between married persons with a right of survivorship
Same rules as a joint tenancy plus the requirement that the joint tenants be married when a deed is executed or the conveyance occurs (utility of person)
Neither party can alienate or encumber the property without the consent of the other
Concurrent estates: ousting
When a co-tenant refuses to allow another access to the property, the ousted co-tenant may bring a court action to gain access to the property and to recover the value of the use of the property for the time during which the co-tenant was denied access to the property
Concurrent estates: third party rents
A co-tenant must account to other co-tenants for rent received from third party renters but can deduct operating expenses when calculating the proceeds
Rent is divided based on the ownership interest of each tenant
Can a co-tenant collect operating expenses from another co-tenant
A co-tenant can collect contribution from the other co-tenants for paying more than his portion of necessary or beneficially spent operating expenses unless he is the only one in physical possession of the property, and the value of his use of it is equal to or outweighs the over payment
Can a co-tenant be reimbursed by other co-tenants for repairs or improvements made to the property
There is no right to reimbursement from co-tenants for necessary repairs or improvements.
The co-tenant who makes the repairs or improvements can get credit in a partition action
Concurrent estates: partition
A tenant in common or a joint tenant generally has a right to unilaterally partition the property which will result in the court dividing the property into distinct portions
It it is not fair to all parties or practicable to divide the property into distinct portions, the court will partition the land by sale and distribute the proceeds among the co-tenants in accordance with their ownership interests
What are the different types of future interests
- Reversion
- Possibility of reverter
- Right of reentry
- Remainder
What is a remainder
A future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate of known fixed duration that is created in the same conveyance in which the remainder is created
A remainder is given after a life estate
A conveys Blackacre to B for life, and then to C (C has the remainder)
A remainder can be either vested or contingent
What is a vested remainder
An interest that is not subject to any conditions precedent and is created in an ascertainable grantee
A conveys Blackacre to B for life, and then to C and his heirs
-C is the ascertainable grantee and the conveyance is not subject to any condition precedents
What is a vested remainder subject to open
If a conveyance grants a remainder to a class of grantees and at least one of the grantees receives a vested remainder at the time of the conveyance, then that vested remainder is subject to open
It is open because the property interest is uncertain because other grantees may become vested, and able to share in the grant
What are the two most normal circumstances that a remainder is contingent
When the property cannot vest because the beneficiary is unknown
when the property cannot vest because the known beneficiary is subject to a condition precedent that has not yet occurred
Rule in Shelley’s case
Prevents contingent remainders in the grantee’s heirs by merging the present and future interest so that the grantee gets a fee simple absolute instead of a life estate with a contingent remainder to the grantee’s heirs
Most jurisdictions have abolished this rule
A conveys to B for life, remainder to B’s heirs
-Shelley’s rule will merge the two interests and B will receive the property in fee simple absolute
-
Doctrine of worthier title
It prevents against remainders in the grantor’s heirs and instead creates a presumption in a reversion to the grantor
What is an executory interest
A future interest in a third party that is not a remainder and that cuts the prior estate short upon the occurrence of a specified condition
Executory interests are transferable and are subject to RAP
What are the two types of executory interests
Shifting executory interest
Springing executory interest
what is a shifting executory interest
It divests the interest of the grantee by cutting short a prior estate created in the same conveyance
It results in the shifting of an estate from one grantee to another
A conveys Blackacre to B and her heirs, but if C returns from Paris, then to C
- B gets a fee simple subject to an executory interest
- A gets nothing
- C gets a shifting executory interest
What is a springing executory interest
It divests the interest of the grantor or fills a gap in possession in which the estate reverts to the grantor
A conveys Blackacre to B for life, and then one year after the death of B, to C and his heirs
- B gets a life estate
- A gets a fee simple subject to an executory interest
- C gets a springing executory interest
What happens under RAP
Specific future interests are only valid if they must vest or fail by the life in being, plus 21 years
In which future interests does RAP apply
- Contingent remainders
- Vested remainders subject to open
- Executory interests
- Powers of appointment
- Rights of first refusal
- Options
RAP: what is a measuring life
The application of RAP is determined by one or more measuring (validating) lives.
If a measuring life is not specified, then the measuring life is the life directly related to the future interest that is subject to RAP
If there is not a measuring life (such as the case of a charity grantee) then the applicable testing period is 21 years from the time that the future interest is created
What happens if a future interest violates RAP
Only the offending interest fails and is struck out
What happens if the transfer of a future interest made to a class fails
then the transfer is void as to all class members, even those whose interests are already vested “bad as to one, bad as to all”
What is the rule of convenience
Absent a closing date, the rule of convenience closes the class when any member of the class becomes entitled to immediate possession of the property
What are the exception to the “bad as to one, bad as to all” rule for class transfers
Transfers of a specific dollar amount to each class member
-$50,000 to each grandchild that survives his parents
Transfers to a subclass who vests at a specific time
-to the children of B, and upon the death of each, to that child’s issue
Charity-to-charity RAP exception
if property passes from one charity to another charity, then the interest of the receiving charity is not subject to the Rule
This exception does not apply to property transferred from a charity to a non-charity
Current tenant’s option RAP exception
RAP does not apply to an option to purchase the property that is held by a current leasehold tenant
Does not apply to a subsequent leaseholder of the purchase option if the original leaseholder transferred its purchase option
What are the four types of landlord-tenant estates
- Tenancy for years
- Periodic tenancy
- Tenancy at will
- Tenancy at sufferance
Tenancy for years
An estate by a fixed an ascertainable amount of time that is created by and agreement between the landlord and the tenant and the agreement must be in writing if the term is for more than a year
A tenancy for years may be any length of time
How is a tenancy for years terminated
Termination occurs automatically upon the expiration of the term with no notice required
Periodic tenancy
A repetitive, ongoing estate measured by a set period of time but with no predetermined termination date that can be created by express agreement, implication, or operation of law and that renews automatically at the end of each period until one party gives a valid termination notice
How is a periodic tenancy terminated
Notice of termination must be given by the terminating party before the beginning of the intended last period and the termination becomes effective on the last day of the period
Ex: Larry leases Blackacre to Tara on a month-to-month basis. She notifies Larry on January 15 that she wants to terminate the tenancy. The termination becomes effective on February 28th
If the tenancy is a year-to-year tenancy then only a six month notice is needed for termination and not an entire year notice
Tenancy at will
A leasehold estate that does not have a specific term and continues until terminated by either the landlord or the tenant
How is a tenancy at will created
It can be created by the express agreement of the parties or by implication if a person is allowed to occupy the premises, such as when the parties are negotiating a lease
The payment of rent by the tenant will convert it into a tenancy at will
How is a tenancy at will terminated
At common law, it could be terminated by either party without advance notice, but the tenant had to be given a reasonable time in which to vacate.
By statute, most states today require notice to be given and some states allow only the tenant to terminate
Can also be terminated by the death of either party, waste or assignment by the tenant, and transfer or lease of the property to a third party by the landlord
Tenancy at sufferance
the period of time after the expiration of a lease during which the tenant remains on the premises
During a tenancy at sufferance, the tenant is bound by the terms of the lease that existed before expiration, including payment of rent
How is a tenancy at sufferance terminated
It can be terminated by the departure of the tenant from the premises, by the eviction of the tenant from the premises by the landlord, or by the landlord’s decision to lease the premises to the tenant for another term
What basic duties does a tenant have
- Duty to pay rent
2. Duty to avoid waste
What situations allow for the tenant’s duty to pay to be suspended
- Destruction of premises
- Landlord completely or partially evicts the tenant
- Material breach of the lease by the landlord
Suspension of tenant’s duty to pay rent because of destruction of premises
If the premises are destroyed the lease is terminated and the tenant is excused from paying rent so long as the tenant is not at fault for the destruction
Exception to the duty to pay rent: material breach by the landlord
Under common law, a landlord who breached the covenant of quiet enjoyment could give the tenant the right to terminate the lease and cease paying rent. Moreover, most states give tenants various options with regard to the payment of rent if a landlord violates the implied warranty of habitability in a residential lease (escrow acct, deducting cost of repairs from rent)
Tenant’s duty to avoid waste
A tenant a duty to not commit affirmative waste, ameliorative waste, or permissive waste
Tenant’s duty to make repairs
Under property law, under a non-residential lease, if the lease specifies that the tenant must repair and maintain the property, then the tenant is generally liable for all damage to the property, unless the landlord caused the damage however, if the damage is significant and such damage was not caused by the tenant, the modern trend is to find that the tenant is not liable
Under a residential lease, a provision that places the burden on the tenant is generally void but the tenant may be required to notify the landlord of the need for repairs
Landlord remedy for tenant’s failure to pay rent
If a tenant fails to pay rent, then the landlord can sue both for damages and to remove the tenant from the property
Landlord’s remedy if the tenant abandons the property
If a tenant unjustifiably abandons a leasehold, the the landlord can treat the abandonment as an offer of surrender and could accept by retaking the premises or the landlord may re-rent the premises on the tenant’s behalf and hold the tenant liable for any deficiency. Regardless, the landlord must mitigate damages by making an effort to re-rent the premises
Holdover tenant
When a tenant continues to occupy the premises without the landlord’s agreement after the original lease expires, the tenant is a holdover tenant and the landlord can either continue the relationship by treating the holdover as a periodic tenant or a tenant at sufferance or the landlord can file a lawsuit for unlawful detainer if the holdover remains after being served a written notice to vacate
