Property Flashcards
What are the 3 kinds of present possessory estates?
1) Fee a/k/a Fee Simple a/k/a Fee Simple Absolute 2) Life Estate 3) Term Estate
What are the different types of defeasible estates?
1) Fee Simple Determinable 2) Fee Simple Subject to a Condition Subsequent 3) Fee Simple Subject to Executory Interest 4) Life Estate (can be made defeasible, but are not inherently so)
What are the different types of future interests for estates in land?
1) Possibility of a Reverter 2) Right of Reentry (Power of Termination) 3) Reversion 4) Executory Interests 5) Remainders
What is a FSA?
The best estate you can own as it is the largest possible estate in land and includes the aggregate of all possible rights that a person may have in that parcel of land (“the whole bundle of sticks”). The only way a fee simple absolute terminates is if the owner dies without an heir in which case the property escheats to the State. Generally presumed under modern law.
What is a Defeasible Estate?
A defeasible estate is an estate that may terminate before its maximum duration has run. It terminates upon some happening or event. Includes: 1) Fee Simple Determinable (durational language); automatic. 2) Fee Simple Subject to Condition Subsequent (conditional language); presumed if language is ambiguous; not automatic. 3) Fee Simple Subject to Executory Interest (conditional or durational language may create it; occurs when the property passes upon the happening of some event to a 3rd party (not the Grantor)).
What are the Reversionary Interests that may be created in a Grantor?
1) Possibility of a Reverter (follows a determinable estate; automatically) 2) Right of Reentry a/k/a Power of Termination (follows a Fee Simple Subject to Condition Subsequent or a failed attempt to create a Fee Simple Determinable; requires Grantor or his heirs take affirmative action to reclaim property upon the happening of some event) 3) Reversion (occurs anytime a Grantor fails to transfer the entire estate in perpetuity – as in after a Life Estate or a Term of Years)
What are the future interests that are created in 3rd parties (not back to the Grantor or his heirs)?
1) Executory Interests - a fee estate that has no natural termination is cut short by a 3rd Party; since a FSA has the potential to last forever, ANY interest created in a 3rd Party that follows the granting of a fee estate (cuts it short) will ALWAYS be an executory interest. 2) Remainder Interest - a future interest created in a 3rd Party which is intended to take after the natural termination of the preceding estate (like after a life estate); - May be Contingent (meaning NOT VESTED) or Vested; - for a property interest to be vested it must be created in an ascertainable person, and is not the subject to any condition precedent other than the natural termination of the preceding estate.
What are the special types of vested remainders?
1) Vested Remainder Subject to Condition Subsequent a/k/a Vested Remainder Subject to Complete Divestment 2) Vested Remainder Subject to Open a/k/a Vested Remainder Subject to Partial Divestment
When is a Class opened?
Either 1) For an inter vivos conveyance, at the time of the conveyance; OR 2) For a testamentary conveyance, upon the death of the testator.
When is a Class closed?
Because the RAP can void a future interest, we have the Rule of Convenience which states that a class closes as soon as at least one member of the class becomes entitled to immediate possession of the property.
What is the Doctrine of Destructibility of Contingent Remainders?
At common law, a contingent remainder in real property is destroyed by any of the following: 1) if it fails to vest by the natural termination of the prior vested estate EX: O conveys “to A for life, remainder to B and her heirs IF B reaches the age of 21”; A then has a life estate, and if B is not yet 21, then B has a contingent remainder (contingent up on B reaching the age of 21), and O retains a reversion. Assume that A dies and B is not yet 21. B’s contingent remainder cannot fall naturally at the termination of A’s life estate b/c B has not yet met the condition precedent to vesting. B’s contingent remainder is thus DESTROYED, and therefore O’s reversion will become possessory.
What is the Doctrine of Merger?
Merger results in one party taking a FSA and another party who has a contingent remainder no longer has any future interest; it is destroyed. Merger occurs when one party who possesses a present or future interest in a piece of property obtains all outstanding present and vested estates in that property – which may happen when 1) person holding a present estate surrenders that property to the person holding the future estate in that property; 2) person who owns future estate releases it to the owner of the present estate; OR 3) when all holders of present and future vested interests convey all of these interests to a 3rd Party. EXAMPLE: O conveys “to A for life, remainder to B IF B earns a law degree.” A has a life estate. If B has not yet earned a law degree, B has a contingent remainder in fee simple absolute. O contains a reversion. Assume that 1 year later, O conveys her reversion to A, and B still has not yet earned his law degree. A now has both a life estate and a reversion, so the 2 interests merge to form a FSA and B’s contingent remainder is destroyed.
What are the essential terms required for a contract to transfer an interest in real property?
The Statute of Frauds requires a writing for a transfer of an interest in real property. The writing must be signed by the party to be charged and must include the following essential terms:
- A description of the property;
- A description of the parties;
- Price; and
- Any conditions of price or payment if agreed on.
Are there any exceptions to the Statute of Frauds’ requirement that a contract for the transfer of an interest in property be in writing?
- The Doctrine of Part Performance
The Doctrine of Part Performance may be used to enforce an otherwise invalid oral contract of sale, provided the act of part performance unequivocally prove the existence of the contract.
To satisfy the doctrine, a showing of at least 2 of the following 3 factors must be made:
- Payment of all or part of the purchase price;
- Taking Possession; AND
- Making substantial improvements.
- Equitable and Promissory Estoppel
Equitable Estoppel is based on an act or representation.
Promissory Estoppel is based on a promise.
What is the concept of Equitable Conversion as it applies to land sales contracts?
Equitable Conversion
- A purchaser becomes an Equitable Owner of Title at the time of the execution of a binding contract for the sale of real property.
- Under the CL, the risk of loss is on the Buyer on execution of a binding contract for the sale of real property. The CL rule is the Majority Rule.
- Under the Uniform Vendor and Purchaser Risk Act, the risk of loss is placed on the Seller UNLESS legal title or possession of the property has passed to the Buyer. The rule of the Uniform Vendor and Purchaser Risk Act is the minority rule.
