Property Flashcards
Present possessory estates
freehold and non-freehold.
Estates: mean possession.
Fee simple
Can be Fee simple absolute and defeasible.
Fee simple Absolute
• potentially infinite duration: potentially last forever
FSA MUST be fully alienable: No direct restrains on transfer of ownership of FSA
direct restraint
it is a restrain on alienation so void for FSA.
It is void so you ignore the restriction.
BUT A condition may be imposed but any attempt to limit the right of transfer is void.
Fee Tail
Abolished in most states
• To A and the heirs of his body OR
• To A and his bodily heirs
Modern presumption: this language will be presumed to create an FSA
Life Estate
Granted expressly or by implication.
Life estate is NEVER measured by time, only measured by life.
When Life estate ends all encumbrances disappear.
BUT if taxes are not paid, and there is a tax sell future holders lose their interest.
Life Estate by implication
To A after the death of my wife.
The life estate is created by necessary implication from the terms of the testator’s will.
Life Estate pur Autre Vie
A life estate measured by the life of another.
Common Law: if life T dies before measuring life dies Seisin is vacant so anyone takes.
Maj. If life T dies before the measuring life, life estate passes to the estate of the deceased life T and continues UNTIL the measuring life dies.
Life estates and restraints on alientation
Modern rule allows a provision that terminates the life estate if the life tenant attempts to convey away the life estate.
Law of Waste
Life tenant must maintain the estate. ONLY LIFE ESTATES
Maintain is the max and the min that the life T can do on the land.
Maintain means the life T may continue the normal use of the land.
Voluntary Waste
Any affirmative action beyond the right of maintenance that causes harm to the premises.
Any change of use is voluntary waste for which the life T may be liable to holder of future interest.
Depletion of natural resources constitutes waste unless consumption of such resources constitutes the normal use of the land, as in the case of a life estate in a coal mine or granite quarry. This is the open mines doctrine. BUT sale of harvestable crops does not involve waste.
Permissive waste
Failure to maintain. T must do three things to avoid this.
• Repairs
• pay taxes
• pay interest on Mortgage Debt
Life T does not need to insure the property, but the life T does have an insurable interest.
Life T’s obligation to repair
Life T has obligation to make ordinary repairs but not replacement.
Repair obligation is limited to amt of rents and profits rec’d from the land.
If no rents or profits, then the repair obligation is limited to reasonable rental value of the land IF life T is using the land.
IF life T is not getting rent or profit OR using land NOT repair obligation.
Life T’s obligation to pay taxes
The life T must pay all taxes on the property.
BUT obligation is limited to amt of rents and profits rec’d from the land.
If no rents or profits, then the repair obligation is limited to reasonable rental value of the land IF life T is using the land.
IF life T is not getting rent or profit OR using land NOT repair obligation.
If fails to pay taxes the future interest must be sure taxes are paid, if tax sale the future interest will be eliminated.
Life T’s obligation to pay mortgage
Life T MUST pay INTEREST and it not required to pay principle. The holder of the future interest pays the principle.
Ameliorative Waste
General Rule: Ameliorative waste occurs when the life T alters the property substantially but life T’s activity increases the value of the land.
BUT
If changed conditions and relatively worthless then life t can alter the property without incurring liability to the holder of the future interest.
Seisin
All freehold estates carry with them the concept of seisin.
The holder of seisin is the taxpayer.
We need to know who hold seisin at all times.
Future interest generally
An interest that exists now BUT possession will not take place (if at all) UNTIL sometime in the Future.
Future interest retained by the grantor
- Reversion
- the possibility of reverter
- right of entry
Future interests given to grantee
- Remainder
* executory interest
Reversion
Always in the grantor.
Arises whenever the grantor conveys away less than the full durational estate that the grantor had. (Automatic).
Possibility of Reverter
Always in the grantor
Whenever grantor conveys a fee simple determinable FSD (durational) the grantor retains automatically a possibility of reverter.
Fee simple determinable
Fee simple DURATIONAL. look for durational language • so long as • while • during • until
Right of re-entry
Always in the grantor.
Whenver grantor conveys a fee simple on condition subsequent, grantor keeps a right of entry
To get the land back you have to jump through hoops. You need to file an ejectment action.
Fee simple on condition subsequent (FSCS)
title does not automatically go back to the grantor when the condition is broken.
• instead grantor must do something to retake the property
• Title stays in the grantee until the grantor exercises his right of entry.
Magic words
• provided however
• but if
• on condition that
Grantor must expressly reserve the right to re-enter and re-take the property.
Transferability of Future Interests
Reversions Possibility of reverter Right of Entry
Subject to Rule Against Perpetuities? N N N
Freely Transferable on death? Y Y Y
Freely Transferable inter vivos? Y Y N
Remainder
in grantee.
A remainder is a future interest in a third party grantee that comes naturally and immediately on the termination of the preceding estate.
Remainder is vested or contingent.
Vested if nothing stands in the way of its becoming possessory on the natural expiration of the preceding estate. (i.e. taker is ascertainable and no conditions to taking)
Grantor kept nothing.
Contingent remainder
A condition exists that must be satisfied before the person’s interest becomes vested.
It could be a survivor condition or age contingency.
Vested
- ascertainable person
* no condition
Class gifts general rules
- class opens when property is transferred (will at death, deed immediately
- class closes when any member of the class has present possessory interest in the property
- If unborn child is in gestation at the time the class closes, he is included in the class
Class gift for remainder
Vested remainder subject to open (or partial divestment)
This allows for birth of new siblings.
Where remainder interest is conveyed to a class of unnamed persons whose members are not yet fully known, the class remains open to allow future persons as class members satisfying the class description.
Class gifts: time for vesting and the rule of convenience
Rule of convenience, the class closes for a class gift whenever any class member is entitled to a distribution. This is a rule of construction not a rule of law. SO the Testator or Grantor could say otherwise.
Class gift to class with no members yet.
To children but no children in existence. If the grantee is not in existence at the time the conveyance takes effect, then the remainder is contingent on the grantee being born and therefore ascertainable.
Widows
To “widow” is a contingent remainder.
It is contingent because we do not know who will be a widow, or even if he will have a widow. A widow is determined at death.
Executory interest
An interest that cuts short the estate that comes before it.
They can follow a fee simple.
Language of condition is made part of the grant over to another party.
many times you see but if, or then to.
Watch punctuation the condition must be part of the grant to the party that takes land subject to the executory interest.
Law of Waste and future interest
Holders of executory interest do not have standing to sue for waste.
BUT
holder of remainder does have standing to sue for waste.
Rule against perpetuities
No interest is good unless it must vest, if at all, not later than 21 years after the death of some life in being at the creation of the interest. Could the interest possibly vest in the time? ALWAYS applies • to executory interest • contingent remainders • vested remainders subject to open • powers of appointment • rights of first refusal
Blue pencil Rule
The court can blue pencil out the invalid conveyance and determine the conveyance
Application of rule against perpetuities
If violated the future interest is voided, simply remove the language from the grant.
NO wait and see, determined at time of conveyance or if will when will takes affect or if deed when deed takes effect.
Uniform statutory Rule against Perp. basically codifies common law AND an alternative 90 year vesting period. Adopting a wait and see approach to see if it actually vests in 90 years.
Ohio statutory reforms to rule against perpetuities
- a wait and see statute. the validity of the interest following a life estate is determined at the end of the life estate NOT when future interest was created
- cy pres approach, if invlied for rule against prep, interest is reformed to carry out the grantor’s intent as nearly as possible.
Trick on perp question
O conveys blackacre to A and her heirs; provided, however, that if the premises shall ever cease to be used for residential purposes, then B has the right to re-enter and retake the premises.
Trick question
A: Fee simple subject to Executory interest
B: executory interest
O: nothing.
you can’t create right of entry in anybody but the grantor.
Right of first refusal and rule against perpetuities
Contingent interest in property, like options and right of first refusal, violate the rule against perpetuities IF they could possibly exercised outside the time period of the rule.
Charity to Charity Exception
If the future interest shifts possession from one charity to another charity then the rule doesn’t apply.
So O conveys to Blackacre to church so long as premsis are used for church purposes, but if they are not then to boy scouts.
although the interest might vest after time period it is still allowed.
BOTH must be charities.
Class gifts and rule of perpetuitites
Age contingency beyond 21 is an open class and the rule against perpetuities: when class is open and gift over is contingent on class member reaching a certain age.
If age contingency beyond 21, conveyance loses its link to a life in being.
Fertile Octogenarian Rule: a person is always able to have kids no matter how old or medical issues.
One loses, all loses
If class gift. If Rle against perpetuities operates to void the gift over to any member of the class, then all member of the class lose.
Creating A Joint Tenancy
To create the four unities must be present. TTIP
• Time: all interested must have vested at the same time
• Title: the grant to all JT must be by the same instrument
• Interest: all JT must take same kind and Same amount of interest
• Possession: All JT must have same identical rights of possession.
The language of the conveyance must clearly reflect grantor’s intent to create a joint tenancy.
Magic words: “as joint tenants, with right of survivorship” or “jointly with right of survivorship”, survivorship must be included.
Partition of joint tenancy voluntary termination
Voluntary: If any JT want s out of common tenancy, can ask for property to be partitioned.
Can be by voluntary agreement or judicial action.
Severance: Involuntary termination of JT
Whenever one of the four unities is disturbed. BUT cannot be severed by will.
Only severed as to part disturbed.
• Sale: disturbs, time, title.
• Mortgage: Maj. does not disturb unities. (lien theory). Min. Title theory does.
• K of sale: severance occurs on K, because of the doctrine of equitable conversion.
• Creditor’s Sale of the interest in JT: no severance before judicial sale.
Tenancy in Common
Only One unity, unity of possession. Each coT is entitled to possess the property.
Modern presumption is in favor of the Tenancy in Common.
Freely alienable, coT can do what he wants with it.
Any CoT can force partition.
NO right of survivorship
Tenancy By the Entirety
The four unities PLUS Marriage Right of survivorship NO right of partition it is NOT severable by the unilateral act of one of the co T. Termination of Tenancy by entity • Death • Mutual agreement in writing • divorce • Execution by a joint creditor Becomes TIC
Incident of co-ownership:Possession
Each CoT has right to possess the whole of the property
Incidents of co-ownership: accountability
Co. T does not have to account to other Co.T for profits
BUT four exceptions
• Ouster: Accounting is required if one co-tenant is either keeping a co-tenant off the property; or claiming a right of exclusive possession
• Agreement to share
• Lease of the property by a co-tenant to third party
• depletion of natural resources
Incidents to co-ownership: Contribution
Contribution is the right of one co T to pay their fair share of some expenditure made on the property.
it all depends on the type of expenditure.
• Improvements: NO contribution
• Repairs: YES BUT only if Necessary repairs
• Paying the Mortgage: is signed by all cots
• Paying taxes: contribution is required towards all gov. obligations (property taxes, assessments for curbs, streets, sewers etc.)
Landlord-Tenant Estates
- Estate for Years or Tenancy for years
- Period Tenancy
- Tenancy at Will
- Tenancy at Sufferance
Tenancy for Years
Specified Time:
• Must have a definite beginning date
• Definite ending date
Any estate measured by a Fixed period of time no matter how short is a Tenancy for years
NOTE: SoF: any tenancy for years over one year must be in writing
NOTICE is NOT required.
Periodic Tenancy
Estate rolls on and on until one party gives proper notice
