Property - Freehold Estates Flashcards
Estate and Characteristics for “To A and his heirs”, “To A”
FEE SIMPLE ABSOLUTE
Duration: Absolute ownership, of potentially infinite duration.
Transferability: Devisable, descendible, alienable
Future Interest: None
Estate and Characteristics for “To A and the heirs of his body”
FEE TAIL
Duration: Lasts only as long as there are lineal blood descendants of grantee
Transferability: Passes automatically to grantee’s lineal descendants.
Future Interests: Reversion (if held by grantor); Remainder ( if held by 3P)
Estate and Characteristics for “To A so long as (or other durational language [until, while]”
FEE SIMPLE DETERMINABLE
Duration: Potentially infinite, so long as event does not occur
Transferability: Alienable, devisable, descendible, [Transfers permissible, but still SUBJECT TO CONDITION]
Future Interests: Possibility of Reverter (held by grantor) [Automatic]
Estate and Characteristics for “To A, but if X event happens grantor reserves right to reenter and retake…”
FEE SIMPLE SUBJECT TO CONDITION SUBSEQUENT
Duration: Potentially infinite so long as the condition is not breached and thereafter until the holder of the right of entry timely exercises the power of termination.
Transferability: Alienable, devisable, descendible subject to condition
Future Interest: Right of Entry/Power of Termination (held by grantor) [Not automatic]
Note: Grantor must specifically care over right of reentry
Estate and Characteristics for “To A, but if X event occurs, then to B
FEE SIMPLE SUBJECT TO AN EXECUTORY LIMITATION
Duration: Potentially infinite, so long as stated contingency does not occur.
Transferability: Same
Future Interests: Executory Interest (held by third party)
Estate and Characteristics for “To A for life.” “To A for the Life of B
LIFE ESTATE AND LIFE ESTATE PUR AUTRE VIE
Duration: Measured by life of transferee or by some other life (pur autre view)
Transferability: Alienable, devisable, and descendible if pur autre view and measuring life is still alive
Future interest: Reversion (if held by grantor); Remainder (if held by 3P).
Two Important Rules of Construction for Defeasible Fees
For Fee Simple Determinable, Condition Subsequent, Executory Limitation:
- Words of mere desire, hope, or intention are insufficient to create a defeasible fee.
- Absolute Restraints on Alienation are VOID.
- *Absolute restraint is an absolute ban on the power to sell or transfer that is not linked to a reasonable time limited purposes.
Two Distinguishing Characteristics of a Life Estate
- The Life tenant is entitled to all ordinary uses and profits from the land
- The life tenant must not commit waste and must not do anything to hurt future interest holders.
* *Encumbrances created by life tenant end upon death of the life tenant.**
Three Types of Waste
Voluntary or affirmative waste: Over conduct that causes a drop in value. (Willful destruction)
Permissive waste: Neglect. The land is allowed to fall into disrepair.
Ameliorative Waste: Acts that enhance the property’s value. (Improvements)
Life Tenants - Voluntary Waste and Natural Resources
General Rule: Life tenant must not consume or exploit natural resources on the propety unless one of four exceptions apply [PURGE]
- Prior Use: Prior to grant, land was used for exploitation. L tenant may continue exploitation.
- Repairs: L Tenant may use natural resources for repairs and maintenance.
- Grant: May exploit if granted the right.
- Exploitation: Land is only suitable for exploitation.
Note: If change circumstance render property uninhabitable, life tenant may make improvements.
Life Tenants and Permissive Waste
(1) Life tenant must simply maintain the premises in reasonably good repair.
(2) Life estate is required to pay all ordinary taxes on the land, to the extent of income or profits form the land. If no income or profit, life tenant is required to pay all ordinary taxes to the extent of the premises fair rental value.
Life Tenant and Ameliorative Waste:
The life tenant must not engage in acts that will enhance the property value unless all future interest holders are (i) known and (ii) consent.
The Rule of Destructibility of Contingent Remainders
Common Law: A contingent remainder was destroy if it was still contingent at the time the preceding estate ended.
Today: Destructibility Rule has Been Abolished. Estate reverts back to grantor who hold it subject to a springing executory interest.
Contingent Remainders and the Rule in Shelley’s Case
Setting: “To A for life, then, on A’s death, to A’s heirs.”
Historically: The present and future interest would merge and give “A” a fee simple absolute. Regardless of the grantor’s intent.
Today: Virtually abolished. It would create a life estate in A and heirs have contingent remainder and if no heirs back to O.
Contingent Remainders and Doctrine of Worthier Title
Still viable today except in MA
Situation: “To A for life, then to O’s heirs.”
MA Rule/Without Doctrine: A has life estate and O’s heirs have a contingent reminder.
With doctrine: O’s heirs contingent remainder is void. Leaving a Life estate to A and O has a reversion.
Policy: Promotes fee transfer of land b/c A&O can sell together in fee simple absolute.
Note: Rule of construction, not law, thus Grantor’s intent will override this doctrine.
Three Kinds of Vested Remainders
- Indefeasibly vested remainder –> NO STRINGS ATTACHED
- Vested Remainder Subject to Complete Defeasance: Right to possession can be cute off by a condition subsequent.
- Vested Remainder Subject to Open: Remainder is vested in a group of takers, but subject to partial diminution.
When does a Class Subject to Open, Close?
Common Law Rule of Convenience: The class closes whenever any member can demand possession (present possesory interest closes the class).
Other Rules:
If you don’t survive the testor, then nothing to your heirs.
If you do survive the testor, its vested and passes to heirs.
Shifting vs. Springing Executory Interests
Shifting: always follows a defeasible fee and cut shows someone other than the grantor.
Springing: Cuts short the grantor’s interest.
General Rule for RAP
The Rule: Certain kinds of future interests are void if there is any possibly, however remote that the given interest may vest more than 21 years after the death of a measuring life.
Four-Step Technique for Assessing Potential RAP Problem
- Determine which future interest have been create. RAP potentially applies to only contingent remainders, executor interests, and certain vested remainders subject to open.
- Identify the condition precedent to the vesting of the suspect future interest.
- Find a measuring life. Look for a person alive at the date of conveyance and ask whether the person’s life or death is relevant to the condition occurrence.
4: Ask: Will we know, with certainty, within 21 years of death of our measuring life, if our future interest holder(s) can or cannot take?
Two Bright Line Rules of Common Law RAP
- A gift to an open class that is conditioned on the members surviving to the age beyond 21 violates the common law RAP.
* If applicable, entire, gift is void - “bad as to one, bad as to all.” - Many shifting executory interest violate the RAP. An executory interest with no limit on the time within it must vest violates the RAP.
Exception: A gift from one charity to another. Does not violate RAP.
Reform of RAP - “Wait and See” or “Second Look doctrine”
Majority reform effort, applies in MA:
Validity of any suspect future interest is determined on the basis of the facts as they now exists, at the end of the measuring life.
Reform of RAP - Uniform Statutory RAP (USRAP)
Applies in MA:
Codifies the common law RAP and in addition provides for an alternative 90 year vesting period.
Modification if Conveyance Violates RAP
- Cy Pres (“as near as possible”) doctrine: If a given disposition violates the rule, a court may reform it in a way that closely matches the grantor’s intent while complying with RAP.
- Reduce any offensive age contingency to 21 years.
