Property Flashcards
THE BASICS
2 types of land ownership
[ present + future interests ]
- estate = present possessory interest
2. future interest = right to future possession
THE BASICS
10 present possessory estates
[ present + future interests ]
(freehold estates)
- fee simple absolute (FSA)
- fee tail (modern = FSA)
- fee simple determinable (FSD)
- fee simple subject to a condition subsequent (FSSCS)
- fee simple subject to an executory limitation (FSSEL)
- life estate (LE)
- life estate determinable
- life estate subject to a condition subsequent
- life estate subject to an executory limitation
- lease (non-freehold)
THE BASICS
fee simple absolute
» future interests
[ present + future interests ]
in grantor = none
in grantee = none
THE BASICS
fee tail
» future interests
[ present + future interests ]
in grantor = none (modern)
in grantee = none (modern)
THE BASICS
fee simple determinable
» future interests
[ present + future interests ]
in grantor = possibility of reverter (POR)
in grantee = none
THE BASICS
fee simple subject to a condition subsequent
» future interests
[ present + future interests ]
in grantor = right of entry
(aka power or termination)
in grantee = none
THE BASICS
fee simple subject to an executory limitation
» future interests
[ present + future interests ]
in grantor = none
in grantee = executory interest
THE BASICS
life estate
» future interests
[ present + future interests ]
in grantor = reversion
in grantee = remainder
THE BASICS
life estate determinable
» future interests
[ present + future interests ]
in grantor = possibility of reverter/reversion
in grantee = none
THE BASICS
life estate subject to a condition subsequent
» future interests
[ present + future interests ]
in grantor = right of entry/reversion
in grantee = none
THE BASICS
life estate subject to an executory limitation
» future interests
[ present + future interests ]
in grantor = none
in grantee = executory interest/remainder
THE BASICS
lease (non-freehold)
» future interests
[ present + future interests ]
in grantor = reversion
in grantee = remainder
THE BASICS
alienability of present and future interests
[ present + future interests ]
all present possessory interests and future interests are transferable
1. inter vivos AND
2. at death (testate and intestate)
EXCEPT rights of entry = not transferable inter vivos in a majority of jurisdictions
all present and future interests are subject to the claims of creditors
THE BASICS
5 rules of construction
[ present + future interests ]
- no new (or hybrid) estates will be recognized
- a deed conveys the grantor’s entire estate unless expressly limited
- grantor may not convey a greater estate than he or she possesses.
- if a conveyance is ambiguous and may reasonably be construed as more than one estate, there is a presumption in favor of the larger possessory estate and a presumption against finding a future interest
- read and analyze the interests in a conveyance in sequence—from left to right
THE BASICS
presumption when conveyance could be construed as both
» fee simple v. defeasible fee simple
[ present + future interests ]
fee simple absolute
THE BASICS
presumption when conveyance could be construed as both
» fee simple absolute v. life estate
[ present + future interests ]
fee simple absolute
THE BASICS
presumption when conveyance could be construed as both
» fee simple determinable v. fee simple subject to a condition subsequent
[ present + future interests ]
fee simple subject to a condition subsequent
THE BASICS
presumption when conveyance could be construed as both
» contingent remainder or vested remainder subject total divestment
[ present + future interests ]
vested remainder subject to total divestment
THE BASICS
vocabulary for freehold estates
» words of limitation
[ present interests ]
designating the estate
THE BASICS
vocabulary for freehold estates
» words of purchase
[ present interests ]
designating the grantee
THE BASICS
vocabulary for freehold estates
» alienable
[ present interests ]
can sell/give during owner’s lifetime
THE BASICS
vocabulary for freehold estates
» devisable
[ present interests ]
can be transferred by will @ death
THE BASICS
vocabulary for freehold estates
» descendible
[ present interests ]
pass by intestate succession laws
FEE SIMPLE ABSOLUTE
definition
[ present interests ]
= A HOLDS FULL TITLE TO THE LAND AND MAY USE, SELL, OR RENT THE LAND AT WILL
modern presumption = almost all states presume that grantor intends to convey a fee simple unless other specific words of limitation are used
(rationale = marketable)
FEE SIMPLE ABSOLUTE
language used to create
[ present interests ]
Traditional =
OWNER TO A AND HER HEIRS.
Modern =
- OWNER TO PERSON X.
- OWNER TO PERSON X AND HER HEIRS. (note = doesn’t actually give interest to heir, just means full ownership given)
- OWNER TO PERSON X FOREVER AND EVER.
- OWNER TO CORPORATION X, ITS SUCCESSORS, AND ASSIGNS.
modern presumption = almost all states presume that grantor intends to convey a fee simple unless other specific words of limitation are used
(rationale = marketable)
FEE SIMPLE ABSOLUTE
duration
[ present interests ]
may endure forever without limit = potentially infinite
FEE SIMPLE ABSOLUTE
ability to transfer
[ present interests ]
Freely alienable
Freely devisable
Freely descendible
DEFEASIBLE FEES
definition
[ present interests ]
= estate that may end upon occurrence of some future event
DEFEASIBLE FEES
3 types
[ present interests ]
- fee simple determinable
- fee simple subject to condition subsequent
- fee simple subject to executory limitation
DEFEASIBLE FEES
fee simple determinable
» definition
[ present interests ]
= a fee simple that may continue forever or may end upon occurrence of some future event
DEFEASIBLE FEES
fee simple determinable
» future interest
[ present interests ]
CREATED IN TRANSFEROR
RETAINED BY HEIRS OF TRANSFEROR
DEFEASIBLE FEES
fee simple determinable
» termination
[ present interests ]
POSSIBILITY OF REVERTER
= AUTOMATIC W/ OCCURRENCE OF EVENT OR CONDITION
DEFEASIBLE FEES
fee simple determinable
» language used to create
[ present interests ]
DURING
SO LONG AS
UNTIL
WHILE
DEFEASIBLE FEES
fee simple determinable
» ability to transfer
[ present interests ]
OF FEE SIMPLE DETERMINABLE
- Alienable, Devisable, Descendible
- BUT durational condition continues to apply to any transferee
OF POSSIBILITY OF REVERTER
- Majority =
- Alienable, Devisable, Descendible - Common law =
- Not assignable, Not devisable
- Could only be transferred by intestate succession
DEFEASIBLE FEES
fee simple determinable
» waste
[ present interests ]
NOT subject to waste
DEFEASIBLE FEES
fee simple determinable
» presumption/preference
v. fee simple subject to condition subsequent
[ present interests ]
when ambiguity exists, NOT preferred to fee simple subject to condition subsequent
DEFEASIBLE FEES
fee simple determinable
» adverse possession
[ present interests ]
adverse possession is possible after condition is met
DEFEASIBLE FEES
fee simple subject to condition subsequent
» definition
[ present interests ]
= fee simple estate created in transferee that may be terminated at the election of the transferor when a certain condition or event occurs
DEFEASIBLE FEES
fee simple subject to condition subsequent
» future interest
[ present interests ]
CREATED IN TRANSFEROR
RETAINED BY HEIRS OF TRANSFEROR
DEFEASIBLE FEES
fee simple subject to condition subsequent
» termination
[ present interests ]
RIGHT OF ENTRY/POWER OF TERMINATION
= MAY BE TERMINATED BY HOLDER OF FUTURE INTEREST WHEN EVENT OCCURS
DEFEASIBLE FEES
fee simple subject to condition subsequent
» language used to create
[ present interests ]
BUT IF, ON CONDITION THAT, PROVIDED HOWEVER, PROVIDED THAT
HELPFUL TO INCLUDE “TRANSFEROR HAS THE RIGHT TO RE-ENTER AND CLAIM THE PROPERTY,” ETC.
DEFEASIBLE FEES
fee simple subject to condition subsequent
» ability to transfer
[ present interests ]
OF FEE SIMPLE SUBJECT TO CONDITION SUBSEQUENT
- Alienable, Devisable, Descendible
- BUT any transferee is bound by condition
OF RIGHT OF ENTRY
- Majority = NOT Transferable inter vivos
- Majority = YES Devisable
- All = YES Descendible
x
x
x
x
RULES ENHANCING MARKETABILITY
restraint upon alienation
» 3 types of restraints
[ future interests ]
- disabling restraint
- forfeiture restraint
- promissory restraint
TRANSFER OF REAL PROPERTY
restraint upon alienation
» disabling restraint
[ future interests ]
= restraint that prevents the transferee from transferring her interest
ex = O conveys “to B, and any conveyance by B is void.”
TRANSFER OF REAL PROPERTY
restraint upon alienation
» forfeiture restraint
[ future interests ]
= restraint that leads to forfeiture of title if transferee tries to transfer interest
ex = O conveys “to B, but if B ever tries to sell the estate, then to D.”
TRANSFER OF REAL PROPERTY
restraint upon alienation
» promissory restraint
[ future interests ]
= restraint that stipulates that transferee promises not to transfer her interest
ex = O conveys “to B, and B promises that she will not sell the estate.”
TRANSFER OF REAL PROPERTY
freedom of alienation
» basic principle
[ future interests ]
transfer that expressly prohibits future transfer of fee simple = 2 options
- ABSOLUTE restraint = VOID as against public policy
- PARTIAL restraint = may be VALID if reasonable as to duration, scope, and purpose
TRANSFER OF REAL PROPERTY
freedom of alienation
» right of first refusal
[ future interests ]
rule = right of first refusal is considered REASONABLE restraint on alienation
IF party holding the right
1. must pay the then-FMV (@ time of future sale) OR
2. is required to match legitimate 3P offers
DEFEASIBLE FEES
fee simple subject to condition subsequent
» waste
[ present interests ]
NOT subject to waste
DEFEASIBLE FEES
fee simple subject to condition subsequent
» presumption/preference
v. fee simple determinable
[ present interests ]
when ambiguity exists, preferred over fee simple determinable
DEFEASIBLE FEES
fee simple subject to condition subsequent
» adverse possession
[ present interests ]
adverse possession NOT possible after condition is met
UNLESS grantor exercises right of entry and is refused
DEFEASIBLE FEES
fee simple subject to executory limitation
» definition
[ present interests ]
= fee simple estate created in a transferee that is followed by a future interest in another transferee
DEFEASIBLE FEES
fee simple subject to executory limitation
» future interest
[ present interests ]
CREATED AUTOMATICALLY UPON CONDITION/EVENT
CREATED IN THIRD PARTY, NOT TRANSFEROR
DEFEASIBLE FEES
fee simple subject to executory limitation
» termination
[ present interests ]
SPRING/SHIFTING EXECUTORY INTEREST
= AUTOMATIC TERMINATION AND TRANSFER WITH OCCURRENCE OF EVENT
DEFEASIBLE FEES
fee simple subject to executory limitation
» language used to create
[ present interests ]
SAME AS LANGUAGE FOR DETERMINABLE OR SUBJECT TO CONDITION PRECEDENT
BUT TRANSFEREE HOLDS FUTURE INTEREST, NOT TRANSFEROR
DEFEASIBLE FEES
fee simple subject to executory limitation
» ability to transfer
[ present interests ]
OF FEE SIMPLE SUBJECT TO EXECUTORY LIMITATION
= Alienable, Devisable, Descendible
OF EXECUTORY INTEREST
= Alienable, Devisable, Descendible
DEFEASIBLE FEES
fee simple subject to executory limitation
» waste
[ present interests ]
NOT subject to waste
DEFEASIBLE FEES
fee simple subject to executory limitation
» future interest in 3P
[ present interests ]
future interest in a third party follows the estate
DEFEASIBLE FEES
adverse possession
[ present interests ]
FEE SIMPLE DETERMINABLE = yes, possible after condition is met
FEE SIMPLE SUBJECT TO COND. SUBSEQUENT
= no, not possible after condition is met
UNLESS grantor exercises right of entry and is refused
grantor has reasonable amount of time after breach within which to declare forfeiture
(failure to do so = power expires)
FEE TAIL
definition
[ present interests ]
= ownership of property transfers at death to next lineal descendant
GRANTOR RETAINS REVERSION = BECOMES POSSESSORY IF LINE OF LINEAL DESCENDANTS EXPIRE
FEE TAIL
words of limitation
[ present interests ]
TO B AND THE HEIRS OF HIS BODY
FEE TAIL
duration
[ present interests ]
DETERMINED BY LIVES OF LINEAL DESCENDANTS OF PARTICULAR PERSON
FEE TAIL
ability to transfer
[ present interests ]
LIMITED RIGHT TO TRANSFER = ONLY LASTS UNTIL DEATH
- May only alienate right to possession until death
- Descends only to lineal descendants
FEE TAIL
contemporary approaches
[ present interests ]
ABOLISHED IN MOST OF US
(can be created in 4 states: DE, ME, MA, RI)
MAJORITY RULE
fee tails are prohibited
= converted in fee simple absolutes
LIFE ESTATE
definition
[ present interests ]
= created a future interest in the form of a reversion or a remainder
LIFE ESTATE
language used to create
[ present interests ]
OWNER TO A FOR LIFE
OWNER TO A FOR LIFE, THEN TO B
LIFE ESTATE
duration
[ present interests ]
lasts for duration of life tenant’s life
terminates upon life tenant’s death and reverts back to grantee
LIFE ESTATE
ability to transfer
[ present interests ]
- Alienable
- Not devisable
- Not descendible
when conveyed to another = life estate pur autre vie (for another’s life)
LIFE ESTATE
rule of construction
[ present interests ]
If language of deed/will is ambiguous, court will interpret it in accordance with transferor’s intent
Presumption of intent to convey largest possible estate
LIFE ESTATE
waste
[ present interests ]
yes, subject to waste
remaindermen (and holders of reversions) may sue for waste
BUT holders of executory interests may not
vested remaindermen may obtain equitable relief and/or damages
BUT contingent remaindermen may only obtain equitable relief
LIFE ESTATE
duties/rights of life tenant
[ present interests ]
LT is entitled to all ordinary uses and profits from land
(ex = LT may live on the property and continue to operate a business or farm on the property)
BUT LT must not commit WASTE
LIFE ESTATE
duties/rights of life tenant
» 3 types of waste
[ present interests ]
- voluntary waste
- permissive waste
- ameliorative waste
LIFE ESTATE
duties/rights of life tenant
» voluntary waste
[ present interests ]
= is affirmative or overt conduct that causes damage to the property
ex =
- breaking a window playing baseball
- hitting the garage wall with a vehicle
- consuming or exploiting natural resources (oil, gas, coal, timber, etc.) on the property EXCEPT 4 situations
- prior use doctrine
(subject to the open mines rule
= if the prior use exploited natural resources like operating 2 coal mines, the LT may continue to operate these 2 mines but may not open any new mines) - resources needed to repair property
(ex = timber for a log home) - specific grant in deed or will for LT to exploit resources
- exploitation of resources is only suitable use of property (ex = life estate in rock quarry)
LIFE ESTATE
duties/rights of life tenant
» permissive waste
[ present interests ]
aka neglect
LT has duty to make ordinary repairs
BUT NOT capital improvements
LT required to pay ordinary expenses (or otherwise will be liable for waste)
- including
1. mortgage interest payments
2. annual real estate taxes
3. HOA dues - but NOT including mortgage principal or property insurance (remainderman must pay these)
NOTE = LT’s obligation to make repairs and to pay taxes/mortgage interest is LIMITED to either
- amount of income received from the land OR
- if none, the land’s fair rental value
LIFE ESTATE
duties/rights of life tenant
» ameliorative waste
[ present interests ]
= a change to the property that increases its value
rule = an action may NOT be brought for ameliorative waste if
- the remainderman does not timely object OR
- the neighborhood has changed so much that the prior use deprived the property of reasonable value
XXXXXX
RULES ENHANCING MARKETABILITY
restraint upon alienation
» 3 types of restraints
[ future interests ]
- disabling restraint
- forfeiture restraint
- promissory restraint
TRANSFER OF REAL PROPERTY
restraint upon alienation
» disabling restraint
[ future interests ]
= restraint that prevents the transferee from transferring her interest
ex = O conveys “to B, and any conveyance by B is void.”
TRANSFER OF REAL PROPERTY
restraint upon alienation
» forfeiture restraint
[ future interests ]
= restraint that leads to forfeiture of title if transferee tries to transfer interest
ex = O conveys “to B, but if B ever tries to sell the estate, then to D.”
TRANSFER OF REAL PROPERTY
restraint upon alienation
» promissory restraint
[ future interests ]
= restraint that stipulates that transferee promises not to transfer her interest
ex = O conveys “to B, and B promises that she will not sell the estate.”
TRANSFER OF REAL PROPERTY
freedom of alienation
» basic principle
[ future interests ]
transfer that expressly prohibits future transfer of fee simple = 2 options
- ABSOLUTE restraint = VOID as against public policy
- PARTIAL restraint = may be VALID if reasonable as to duration, scope, and purpose
TRANSFER OF REAL PROPERTY
freedom of alienation
» right of first refusal
[ future interests ]
rule = right of first refusal is considered REASONABLE restraint on alienation
IF party holding the right
1. must pay the then-FMV (@ time of future sale) OR
2. is required to match legitimate 3P offers
RECORDING ACTS
what type of statute is this and what is its effect?
“no conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof, unless it is recorded.”
[conveyances]
NOTICE statute
= subsequent BFP (for value, w/o notice) prevails
(aka babies don’t know anything and they can’t write)
RECORDING ACTS
what type of statute is this and what is its effect?
“no conveyance or mortgage of an interest in land is valid against any subsequent purchaser whose conveyance is first recorded.”
[conveyances]
RACE statute
= grantee who RECORDS FIRST prevails
(aka racism is bad but it wins)
RECORDING ACTS
what type of statute is this and what is its effect?
“no conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof whose conveyance is first recorded.”
[conveyances]
RACE-NOTICE statute
= subsequent BFP (for value, w/o notice) who RECORDS FIRST prevails
(aka hipster snowflakes can be microagressive too)
