Property Interests Flashcards
Includes RAP, Class Gifts, etc
Fee Simple Absolute
An ultimate estate interest that goes on forever. Key words are “to “A” or “to A and her heirs”
If language in a transfer is ambiguous, the court defaults to an FSA.
If the only limit in an estate is “purpose”, then it’s an FSA!
Fee Simple Determinable + Possibility of Reverter
An estate interest that is based on durational language. The interest goes on until a specific period ends.
“So long as; Until; While; During”
Future Interest: Grantor possesses a possibility of reverter, where the estate automatically transfers back to the Grantor when the “period” ends.
Fee Simple Subject to Condition Subsequent + Right of Entry
An estate interest that goes on until a condition has been met.
“But if; Provided that; On condition that”
Future Interest: Grantor has a right of entry. The grantor (or anyone with their interest) must intentionally reenter and retake the land.
Fee Simple Subject to Executory Limitation + Executory Interest
An estate interest that is given to a third party once a condition or durational term has been complete. The third party essentially cuts an interest short.
Future Interest: Third party possesses an executory interest. Grantor has no future interest.
Springing vs. Shifting Executory Interest
Springing: Interest divests from the Grantor’s interest. “To B for life, then to C one year after.”
Shifting: Interest divests from Grantee’s interest, cutting it off based on an event or occurrence. “To B, but if C returns home, to C.”
Life Estate + Reversion, Contingent Remainder, and Vested Remainder
An estate that lasts as long as a person’s life. Can be based on another’s life re: “Por Autre Vie.” Even if you transfer an estate away, it will revert back to the Grantor following the end of the person’s life.
Future Interest: Grantor has Reversion, where it automatically goes back to the Grantor. If it goes to a third party, then the third party can either have a contingent or vested remainder.
Vested vs. Contingent Remainders
Vested: Follows a life estate. Must be 1) an ascertainable person (alive); 2) not based on condition precedent. If the individual dies, it goes to their heirs.
Contingent: If either requirement to a vested remainder is not met, it is automatically a contingent remainder.
Life Tenant Duties
Life tenant is required to:
- Pay current charges; taxes, mortgages, etc., up to financial benefit of party if occupying the land. If occupying, financial benefit = fair market value of land. If not occupying, financial benefit = income derived from land.
- Prevent Affirmative, Permissive, or Voluntary waste
- Duty to make ordinary repairs
- Right to all income/rent
Remaindermen of the estate may sue and recover based on the life tenant’s wastes if the annual taxes are less than the reasonable rent.
Doctrine of Waste + Types of Waste
Applies when there are two or more parties that have an interest in the same piece of property. This allows the remainder holder to sue the life estate holder!
1) Affirmative Waste: PPI holder voluntarily damages property
2) Permissive Waste: PPI holder’s neglect leads to decrease in property value
3) Affirmative Waste: PPI’s change in use lead to an increase in value
Class Gifts
A type of donative transfer that occurs during someone’s life or death to a members of a group.
Vested Remainder Subject to Complete Divestment
Occurs when a subsequent condition eliminates a remainder interest.
EX: “… then to my heirs, but if none survive my friend, to my lawyer.” In this case, heirs have a VR subject to complete divestment.
Vested Remainder Subject to Open
Interest held by members of a class gift when full membership is known. One person must have a vested remainder for it to be “open.” When all members are identified, it is closed. RAP applies.
EX: A for life, then A’s kids who are 21. If B and C are 18, it remains open until C and D.
Rule of Convenience
To avoid RAP invalidating a class gift through a vest remainder subject to open, allows you to close it early once a class member has immediate possession of the property through the gift.
Doctrine of Worthier Title
Prevents Grantor from making a remainder to their heirs. Grantor is provided a presumption of a Reversion.
EX: “O to A for life, then to my heirs.”
Rule in Shelly’s Case
Prevents remainders given to Grantee’s heirs. Grantee will then hold a FSA.
EX: “O to A for life, then to A’s heirs.”
