Property Interests Flashcards
Learn all about: - Present Estates - Future Interests - Concurrent Estates
1
Q
What are 4 types of present possessory estates?
A
- Fee simple absolute;
-
Defeasible estate;
- Fee simple determinable;
- Fee simple subject to condition subsequent; and
- Fee simple subject to executory limitation
- Life estate; and
- Non-freehold estates (leasehold estate)
2
Q
Define
fee simple absolute
A
Absolute ownership for potentially indefinite duration.
Freely:
- Alienable
- Devisable
- Descendible
3
Q
Is there a future interest in a fee simple absolute?
A
No.
4
Q
“To A” or “To A and his/her heirs” creates what type of interest?
A
Fee simple absolute.
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
6
Q
“To A for life” creates what type of interest?
A
Life estate
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”).
8
Q
What are the two possible future interests in a life estate?
A
- Reversion - in O, the grantor (“A for life”)
-
Remainder - in third party (“A for life, then to B”)
- May be contingent or vested
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).
10
Q
What are the rights of a life tenant?
A
- Right to possession; and
- Right to rent & earn profits during term
Note: Life tenant cannot sell or waste the property without the remainderman’s consent
11
Q
What are the 4 duties/obligations of a life tenant?
A
- Pay property taxes & mortgage interest;
- Make reasonable repairs;
- Not commit waste; and
- Pay insurance premiums (some jurisdictions)
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:
- Affirmative (“voluntary”) waste
- Permissive waste
- Ameliorative waste
13
Q
Define
affirmative waste
A
Intentional and willful damage to the property that decreases its value to the future interest holder
14
Q
Can a life tenant exploit natural resources on the land?
A
No, unless exploitation was:
- Expressly authorized by the grantor;
- Necessary to maintain the land; or
- Already occurring before life tenant took ownership (open mines doctrine)
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
16
Q
Define
permissive waste
A
Failure to protect the property from damage by neglect
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
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:
- A change in neighborhood conditions makes the improvement necessary; and
- There is no diminution in property value
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.
20
Q
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A
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21
Q
In a waste claim, what can a contingent remainderman sue for?
A
Only an injunction to prevent future waste
22
Q
In a waste claim, what can a vested remainderman sue for?
A
- Damages;
- Injunction to prevent future waste
23
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.
24
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
- Fee simple determinable
- Fee simple subject to condition subsequent
- Fee simple subject to executory interest
25
What is a fee simple **determinable**?
What type of **language** creates it?
Property interest that terminates **automatically** upon the happening of a named future event.
Created with **specific durational** language ("until," "while," "so long as")
26
What is the **future interest** in a fee simple determinable?
**Possibility of reverter:** *automatically* reverts back to the **grantor** if condition happens
27
Is a possibility of reverter **transferrable**?
**Modern law:** transferrable, devisible, descendible
**At common law**: via intestacy only
28
What is a fee simple **subject to a condition subsequent?**
What type of **language** creates it?
Gives grantor **power/right to terminate** interest upon occurrence of a specific event.
Created with **specific, conditional** language: "on condition that," "provided," "if"
29
If language identifying the type of **defeasible fee** is ambiguous, then what is the **default** treatment?
* **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
30
What is the grantor's **future interest** in a fee simple subject to condition subsequent?
**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.
## Footnote
*⚠️* Note: Also called the "right of re-entry"
31
Is the **power of termination** ("right of reentry") **transferrable**?
Yes, **devisable**, **descendible, and alienable** (in most jurisdictions), but cannot be transferred during the owner's lifetime.
32
What is a fee simple subject to an **executory interest**?
What type of **language** creates it?
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"
33
A third party may have what type of **future interest** in a fee simple subject to **executory interest**?
Shifting or springing executory interest
34
What types of **future interests** can a **grantor** have?
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)
35
Differentiate between the **power of termination** and **possibility of reverter**
**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
36
What types of **future interests** are retained by **third parties**?
1. **Remainder**
* Vested
* Contingent
2. **Executory interest**
* Shifting
* Springing
37
# Define
remainder interest
A future interest in a third party that arises **after termination of prior possessory estate.**
Can either be vested or contingent.
## Footnote
⚠️ Note: Can **never follow a defeasible fee**
38
What is a **vested remainder** and what are the 3 types?
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
39
What is an **indefeasibly vested** remainder?
Grantee takes possession upon termination of prior estate, **no conditions** attached
40
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41
# Define
vested remainder **subject to total divestment**
Future interest that could be **cut short** if some condition happened.
## Footnote
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.
42
# Define
vested remainder **subject to open (class gift)**
Remainder vested in an ascertained **group of class of takers**, at least one of whom is capable of taking possession
43
Differentiate between an **open vs. closed class**
Open: Others can join
Closed: No new persons can join
44
# Define
rule of convenience
A class closes as soon as at least one member of the class **can demand possession** of the land
45
# Define
contingent remainders
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")
46
**Once the stated condition occurs** with a remainder subject to condition precedent, what does the future interest become?
Indefeasibly vested remainder
47
# Define
Rule in Shelley's Case
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.
## Footnote
⚠️ Note: Shelley's Rule has been abolished in most states
48
# Define
doctrine of worthier title
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.
49
# Define
executory interest
Future interest that **cuts short** another interest if the specified condition occurs. Can be either shifting or springing.
50
Distinguish a **shifting vs. springing** executory interest
**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")
## Footnote
💡Memory tip:
Shif**_T_**ing (divests **t**hird party)
Sprin**_G_**ing (divests **g**rantor)
51
# Define
Rule Against Perpetuities (RAP)
Future interests are void unless they **vest no later than 21 years** after the death of the measuring life
52
What sources may specify the relevant **measuring life** when it comes to the RAP?
It is either specified in conveyance or life of the future interest
53
The RAP only applies to what **types** of future interests?
* Executory interests
* Contingent remainders
* Vested remainders subject to open
* Rights of first refusal
* Powers of appointment
* Options
54
# Define
doctrine of cy pres
Courts will **rewrite** the conveyance "as near as possible" to the grantor's original intent so that it doesn't violate the RAP
55
What are the 3 types of **concurrent estates**?
1. Joint tenancy
2. Tenancy by entirety
3. Tenancy in common
56
Unless expressly written, any conveyance to two or more people is **presumed** to create what type of tenancy?
Tenancy in common
57
# Define
tenancy in common
Each co-tenant owns an **undivided interest** in the property and has the **right to possess the whole**
58
What are the main qualities of a tenancy in common?
1. **No** right of **survivorship**;
2. Freely **devisable**, **transferrable**, **alienable**;
3. Right to **possess the whole**; and
4. Right to **partition**
59
# Define
joint tenancy
Co-ownership with the right of survivorship:
* Freely alienable
* NOT devisable or descendible
60
How is a **joint tenancy** created?
**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
## Footnote
\*In some modern jurisdictions, all that is required today is possession and unity.
61
What is the **effect** of a **right of survivorship**?
If one joint tenant dies, property automatically transfers to the remaining joint tenants
62
Does the **right of survivorship** or a **will** have priority?
Right of survivorship
63
What happens when a joint tenancy is **severed**?
Becomes a tenancy in common
64
What happens when a joint tenant **transfers the interest**?
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)
65
If one **joint tenant mortgages** their interest in land, what happens in a **lien** theory vs. a **title** theory state?
**Lien:** JT is not severed
**Title**: JT is severed
66
What happens when one joint tenant makes an **inter vivos conveyance** of their interest?
Joint tenancy is **severed** and the interest transferred is that of a **tenant in common**
67
What are two **key differences** between joint tenancy and tenancy in common?
* 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)
68
# Define
tenancy by the entirety
A **joint tenancy** between a **married** couple that has:
* Right of survivorship
* No right to partition
69
How can a tenancy by the entirety be severed?
* Divorce;
* Death of one spouse;
* Agreement in writing
70
Do co-tenants have the right to possess the **whole**?
Yes
71
Is a co-tenant required to **pay rent** to the other co-tenants if they are in **exclusive possession**?
No, unless there was an ouster
72
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?
No
73
If a third party is renting the property, how is the **rental income divided** among co-tenants?
Split **proportionally** according to each co-tenant's property interest
74
Do co-tenants have the right to be **reimbursed** for improvements? Repairs?
**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
75
What share of the land's **natural resources** are co-tenants entited to?
In **proportion** to their share of the property
76
# Define
partition
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
77
Who may bring an action for **partition**?
Any joint tenant or tenant in common
78
What is the **preferred** method of partition?
**Partition in kind**: divides property into distinct sections
79
# Define
partition by sale
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.
80
# Define
ouster
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.
