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MBE > MBE Real Property > Property Interests > Flashcards

Property Interests Flashcards

Learn all about: - Present Estates - Future Interests - Concurrent Estates

1
Q

What are 4 types of present possessory estates?

A
  1. Fee simple absolute;
  2. Defeasible estate;
    • Fee simple determinable;
    • Fee simple subject to condition subsequent; and
    • Fee simple subject to executory limitation
  3. Life estate; and
  4. Non-freehold estates (leasehold estate)
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2
Q

Define

fee simple absolute

A

Absolute ownership for potentially indefinite duration.

Freely:

  • Alienable
  • Devisable
  • Descendible
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3
Q

Is there a future interest in a fee simple absolute?

A

No.

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4
Q

“To A” or “To A and his/her heirs” creates what type of interest?

A

Fee simple absolute.

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5
Q

Define

life estate

A

Interest that lasts for the duration of the grantee’s life. Grantee is called the life tenant.

  • Freely transferrable during life of life tenant
  • Not usually devisable or descendible
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6
Q

“To A for life” creates what type of interest?

A

Life estate

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7
Q

Define

life estate pur autre vie

A

Life estate measured by someone other than the grantee’s life (ex. “To A for the life of C”).

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8
Q

What are the two possible future interests in a life estate?

A
  1. Reversion - in O, the grantor (“A for life”)
  2. Remainder - in third party (“A for life, then to B”)
    • May be contingent or vested
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9
Q

If the holder of a life estate transfers that interest, the grantee receives a life estate measured by the _______

A

Measuring life (usually the original life tenant’s life).

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10
Q

What are the rights of a life tenant?

A
  1. Right to possession; and
  2. Right to rent & earn profits during term

Note: Life tenant cannot sell or waste the property without the remainderman’s consent

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11
Q

What are the 4 duties/obligations of a life tenant?

A
  1. Pay property taxes & mortgage interest;
  2. Make reasonable repairs;
  3. Not commit waste; and
  4. Pay insurance premiums (some jurisdictions)
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12
Q

What is the doctrine of waste and the 3 types of waste?

A

Life tenant must keep property in the same condition as when she took ownership.

3 types:

  1. Affirmative (“voluntary”) waste
  2. Permissive waste
  3. Ameliorative waste
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13
Q

Define

affirmative waste

A

Intentional and willful damage to the property that decreases its value to the future interest holder

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14
Q

Can a life tenant exploit natural resources on the land?

A

No, unless exploitation was:

  1. Expressly authorized by the grantor;
  2. Necessary to maintain the land; or
  3. Already occurring before life tenant took ownership (open mines doctrine)
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15
Q

Define

open mines doctrine

A

Allows a life tenant to continue exploiting natural resources on the land as long as the mining was previously done and still occurring when the life tenant took ownership

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16
Q

Define

permissive waste

A

Failure to protect the property from damage by neglect

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17
Q

How much is the life tenant required to spend when making reasonable repairs to the property?

A

No more than the income/profits generated by the land

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18
Q

What is ameliorative waste and when is it permitted?

A

When the life tenant makes improvements to the land.

Most jurisdictions allow the life tenant to make improvements if:

  1. A change in neighborhood conditions makes the improvement necessary; and
  2. There is no diminution in property value
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19
Q

Who has standing to sue for waste?

A

The holder of a remainder interest (vested or contingent) as well as a reversion interest.

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20
Q

In a waste claim, what can a contingent remainderman sue for?

A

Only an injunction to prevent future waste

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21
Q

In a waste claim, what can a vested remainderman sue for?

A
  1. Damages;
  2. Injunction to prevent future waste
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22
Q

In a life estate, does the future interest holder have a right to inspect the property for waste?

A

Yes, has a license to enter the property that cannot be revoked by current tenant. Can seek injunction or damages if waste is found.

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23
Q

What are defeasible fees and what are the 3 types?

A

A fee estate of potentially infinite duration that can be terminated upon the occurrence of a specified event

  1. Fee simple determinable
  2. Fee simple subject to condition subsequent
  3. Fee simple subject to executory interest
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24
Q

What is a fee simple determinable?

What type of language creates it?

A

Property interest that terminates automatically upon the happening of a named future event.

Created with specific durational language (“until,” “while,” “so long as”)

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25
Q

What is the future interest in a fee simple determinable?

A

Possibility of reverter: automatically reverts back to the grantor if condition happens

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26
Q

Is a possibility of reverter transferrable?

A

Modern law: transferrable, devisible, descendible

At common law: via intestacy only

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27
Q

What is a fee simple subject to a condition subsequent?

What type of language creates it?

A

Gives grantor power/right to terminate interest upon occurrence of a specific event.

Created with specific, conditional language: “on condition that,” “provided,” “if”

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28
Q

If language identifying the type of defeasible fee is ambiguous, then what is the default treatment?

A
  • Fee simple subject to a condition subsequent is preferred over fee simple determinable (because there is no automatic forfeiture)
  • Covenant is preferred over a defeasible estate
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29
Q

What is the grantor’s future interest in a fee simple subject to condition subsequent?

A

Power of termination: when the subsequent condition is met, the grantor has the power to terminate by affirmative action to re-take the property; the property does not automatically revert back to the grantor.

⚠️ Note: Also called the “right of re-entry”

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30
Q

Is the power of termination (“right of reentry”) transferrable?

A

Yes, devisable, descendible, and alienable (in most jurisdictions), but cannot be transferred during the owner’s lifetime.

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31
Q

What is a fee simple subject to an executory interest?

What type of language creates it?

A

An estate that is subject to a future interest by a third party, and upon occurrence of an event, the estate will automatically divest in favor of the third party.

Created with specific conditional language: “To A, but if A doesn’t finish law school, then to B and B’s heirs”

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32
Q

A third party may have what type of future interest in a fee simple subject to executory interest?

A

Shifting or springing executory interest

33
Q

What types of future interests can a grantor have?

A
  1. Reversion (life estate);
  2. Possibility of reverter (fee simple determinable);
  3. Power of termination (also can be called “right of reentry”; fee simple subject to condition subsequent)
34
Q

Differentiate between the power of termination and possibility of reverter

A

Power of termination:

  • Must be expressly retained by grantor in the conveyance
  • When the event happens the property does not automatically revert back to the grantor, the grantor must re-take the property
  • Descendable; devisable, not transferrable inter vivos (majority rule)

Possibility of reverter:

  • Automatically created whether or not grantor expressly reserves the right in conveyance
  • When the event happens the property automatically reverts to the grantor
  • Descendible, devisable, transferrable
35
Q

What types of future interests are retained by third parties?

A
  1. Remainder
    • Vested
    • Contingent
  2. Executory interest
    • Shifting
    • Springing
36
Q

Define

remainder interest

A

A future interest in a third party that arises after termination of prior possessory estate.

Can either be vested or contingent.

⚠️ Note: Can never follow a defeasible fee

37
Q

What is a vested remainder and what are the 3 types?

A

Interest that is:

  1. Created in an ascertainable grantee; and
  2. Not subject to any condition precedent other than termination of the preceding estate

Types:

  1. Indefeasibly vested
  2. Vested remainder subject to total divestment
  3. Vested remainder subject to open
38
Q

What is an indefeasibly vested remainder?

A

Grantee takes possession upon termination of prior estate, no conditions attached

39
Q

Define

vested remainder subject to total divestment

A

Future interest that could be cut short if some condition happened.

Ex. “To A for life, remainder to B, but if B doesn’t quit smoking, then to C.”

B has a vested remainder subject to total divestment because she must quit smoking to keep the interest.

40
Q

Define

vested remainder subject to open (class gift)

A

Remainder vested in an ascertained group of class of takers, at least one of whom is capable of taking possession

41
Q

Differentiate between an open vs. closed class

A

Open: Others can join

Closed: No new persons can join

42
Q

Define

rule of convenience

A

A class closes as soon as at least one member of the class can demand possession of the land

43
Q

Define

contingent remainders

A

Remainders that are either:

  • Created for an unknown beneficiary (“To A for life then to B’s heirs” if B has no children yet); or
  • Subject to a condition precedent (“To A for life then to B and her heirs if B passes the bar”)
44
Q

Once the stated condition occurs with a remainder subject to condition precedent, what does the future interest become?

A

Indefeasibly vested remainder

45
Q

Define

Rule in Shelley’s Case

A

Provides that any conveyance, which purports both to convey a present possessory estate of definite duration (such as a life estate) to a grantee and to create the corresponding remainder entirely in the grantee’s heirs, instead results in the conveyance of the grantor’s entire estate to the grantee alone, because both the present and future estates are deemed to be merged in the grantee.

⚠️ Note: Shelley’s Rule has been abolished in most states

46
Q

Define

doctrine of worthier title

A

When A conveys future interest to heirs, there is a rebuttable presumption that A intended to keep interest to herself

Note: The majority of states have abolished this.

47
Q

Define

executory interest

A

Future interest that cuts short another interest if the specified condition occurs. Can be either shifting or springing.

48
Q

Distinguish a shifting vs. springing executory interest

A

Shifting: cuts short a third party’s interest (“To A and her heirs but if B passes the bar, then to B)

Springing: cuts short the grantor’s interest (“To A if she passes the bar”)

💡Memory tip:

ShifTing (divests third party)

SprinGing (divests grantor)

49
Q

Define

Rule Against Perpetuities (RAP)

A

Future interests are void unless they vest no later than 21 years after the death of the measuring life

50
Q

Where do you look to determine the measuring life for the RAP?

A

It is either specified in conveyance or life of the future interest

51
Q

The RAP only applies to what types of future interests?

A
  • Executory interests
  • Contingent remainders
  • Vested remainders subject to open
  • Rights of first refusal
  • Powers of appointment
  • Options
52
Q

Define

doctrine of cy pres

A

Courts will rewrite the conveyance “as near as possible” to the grantor’s original intent so that it doesn’t violate the RAP

53
Q

What are the 3 types of concurrent estates?

A
  1. Joint tenancy
  2. Tenancy by entirety
  3. Tenancy in common
54
Q

Unless expressly written, any conveyance to two or more people is presumed to create what type of tenancy?

A

Tenancy in common

55
Q

Define

tenancy in common

A

Each co-tenant owns an undivided interest in the property and has the right to possess the whole

56
Q

What are the main qualities of a tenancy in common?

A
  1. No right of survivorship;
  2. Freely devisable, transferrable, alienable;
  3. Right to possess the whole; and
  4. Right to partition
57
Q

Define

joint tenancy

A

Co-ownership with the right of survivorship:

  • Freely alienable
  • NOT devisable or descendible
58
Q

How is a joint tenancy created?

A

Must have the Four Unities (“PITT”):

  1. Unity of Possession: equal right of possession;
  2. Unity of Interest: equal interest with co-tenants;
  3. Unity of Title: same conveyance; and
  4. Unity of Time: interests created at the same time

*In some modern jurisdictions, all that is required today is possession and unity.

59
Q

What is the effect of a right of survivorship?

A

If one joint tenant dies, property automatically transfers to the remaining joint tenants

60
Q

Does the right of survivorship or a will have priority?

A

Right of survivorship

61
Q

What happens when a joint tenancy is severed?

A

Becomes a tenancy in common

62
Q

What happens when a joint tenant transfers the interest?

A

The joint tenancy remains intact between remaining joint tenants and the interest sold is held as a tenancy in common between all parties (as long as there are 3 or more JTs)

63
Q

If one joint tenant mortgages their interest in land, what happens in a lien theory vs. a title theory state?

A

Lien: JT is not severed

Title: JT is severed

64
Q

What happens when one joint tenant makes an inter vivos conveyance of their interest?

A

Joint tenancy is severed and the interest transferred is that of a tenant in common

65
Q

What are two key differences between joint tenancy and tenancy in common?

A
  • A joint tenancy creates a right of survivorship and a tenancy in common does not
  • Tenancy in common only requires unity of possession (not the 4 unities like a JT)
66
Q

Define

tenancy by the entirety

A

A joint tenancy between a married couple that has:

  • Right of survivorship
  • No right to partition
67
Q

How can a tenancy by the entirety be severed?

A
  • Divorce;
  • Death of one spouse;
  • Agreement in writing
68
Q

Do co-tenants have the right to possess the whole?

A

Yes

69
Q

Is a co-tenant required to pay rent to the other co-tenants if they are in exclusive possession?

A

No, unless there was an ouster

70
Q

If a co-tenant uses the property to make a profit (e.g. runs a business on the property), do they need to share profits with the other co-tenants?

A

No

71
Q

If a third party is renting the property, how is the rental income divided among co-tenants?

A

Split proportionally according to each co-tenant’s property interest

72
Q

Do co-tenants have the right to be reimbursed for improvements? Repairs?

A

Improvements: No, but if the property value increases b/c of the improvement, co-tenant who did the improvement can receive the profit upon sale (but tenant is also liable for any diminution in property value from the improvements)

Repairs: No, even if the repairs are necessary, but some jurisidictions allow it as long as other co-tenants are notified in writing

73
Q

What share of the land’s natural resources are co-tenants entited to?

A

In proportion to their share of the property

74
Q

Define

partition

A

Divides concurrent estate into separate tracts of property in proportion to each tenant’s ownership; can be either voluntary or involuntary (court order).

Two types: partition in kind and partition by sale

75
Q

Who may bring an action for partition?

A

Any joint tenant or tenant in common

76
Q

What is the preferred method of partition?

A

Partition in kind: divides property into distinct sections

77
Q

Define

partition by sale

A

Partition ordered by the court when it’s impossible to come up with a fair and equitable physical division of the lot.

Proceeds from the sale will be apportioned among co-tenants.

78
Q

Define

ouster

A

Action brought by co-tenant if the other co-tenant has denied them access to the property.

Co-tenant can regain access and recover loss of use from property.

MBE Real Property (6 decks)

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