Real Property Flashcards
Fee Simple Absolute
To A and his heirs
Fee Simple Determinable
So long as…
Until..
Future Interest: Possibility of Reverter
Created in Whom: O
Automatic
Fee Simple on Condition Subsequent
Condition or re-enter
Future Interest: Right of re(Entry)
Created in whom: O
REQUIRES ACTION ON BEHALF OF O
Fee Simple Subject to Executory Interest
So long as… or until… & then to B
Future Interest: Executory Interest
Created in B
Automatic
What happens if there is no time limit within which an executory interest must vest or fail?
Void
To A, but if liquor is ever sold on the property, then to B.
What does A have?
Valid Under RAP?
A has a FSA because it is not valid under RAP because there is no time limit within the exectory interest must vest or fail.
To A so long as no liquor is ever sold on the property, and if it is then to B.
What does A have?
What does B have?
Valid under RAP?
A has a Fee Simple Determinable.
B’s interest is void because of RAP.
So, O has a possibility of reverter
To A, but if A personally sells liquor on the property, then to B.
A?
B?
RAP?
Valid under RAP, lifetime of A is time period.
A has Fee SImple subject to Executory Interest
B has Executory Interest automatically
To A, but if liquor is sold on the property within the next 20 years, then to B.
A?
B?
RAP?
A has a fess simple subject to EI
B has an AUTOMATIC EI
Valid under RAP
To A, but if liquor is sold on the property during A’s lifetime or within 20 years after A’s death, then to B.
A?
B?
RAP?
A has fee simple subject to EI
B has AUTOMATIC EI
Valid. Can combine a life + years as long as it is within 21 years of life in being.
Fee Tail
To A and the heirs of his body.
Life Estate
To A for life. (A is the measuring life, and A owns the life estate.)
To A for the life of B. (B is the measuring life. A has an estate for the life of another.)
To A for life. Later, by a new deed, A conveys her interest to B. What does B have? (Life Estate, but A is measuring life)
Law of Waste
Plaintiff mayt be holder of a future interest (usually following a life estate) or a mortgage.
Usual remedies are damages and an injunction.
What type of waste is committed by A, a life tenant?
1) A chops holes in the walls of the house.
2) A allows leakes in the roof to rot the roof timbers.
3) A fails to pay the property taxes or the interest on a mortgage.
1) Voluntary Waste
2) Permissive Waste
3) Financial Waste
Taxes and Waste
Life tenant must pay, up to property’s rental.
Mortgages and Waste
Life tenant must pay interest; future interest holder must pay principal.
A removes a house which has become obsolete because of neighborhood changes, and replaces it with a warehouse which is of greater value. What type of Waste?
Ameliorative Waste
Requirements for Ameliorative Waste
Surroundings/Neighborhood must have changed, making present use infeasible, AND
Building must be replaced with one having equal or greater value.
Future Interests created in the grantor.
Possibility of Reverter
Right of Reentry
Reversion
Possibility of Reverter
Follows a FSD
Right of Reentry
Follows a FSSCS
Reversion
Follows any interest given by the grantor which is of lesser duration than he or she owns.
Ex. To A for Life, or To A for ten years.
Future Interests not for the grantor.
Remainder
Executory Interest
Remainder
Can only exist if certain rules are met.
Four Rules of Remainders
1) Created at same time and by same instrument as prior estate
2) Prior estate must be life estate
3) Doesn’t “cut short” the prior estate
4) There may not be a “built-in” time gap between the prior estate and the future interest
Executory Interest
The “catch-all” it’s any future interest, created in one other than the frantor, which does not meet the rules for remainders.
Types of Executory Interests
To A until (so long as, but if) …. and then to B (SHIFTING EXECUTORY INTEREST)
To A, to take possession (on A’s 21st birthday, when A graduates, etc (SPRINGING EXECUTORY INTEREST)
Types of Remainders
Vested and Contingent
O conveys “To A for life, then to B’s heirs.” The taker is unascertainable so B’s heirs remainder is contingent.
O conveys “To A for life, then to B if and when B passes the bar exam.” There is an expressed condition precedent. B’s remainder is contingent until he passes the bar exam. Once he passes the bar the remainder becomes vested.
To A for life, then to A’s firstborn child.
What type of remainder does A’s firstborn child have?
Contingent until A’s child is born, vested afterwards.
To A for life, then to A’s children.
What types of remainders?
Contingent until A has a child, then becomes vested to open because it is a class gift.
To A for life, then to B’s children
Remainders?
When A dies, if B has any children we close the class and give possession to the children born so far. Any later born children get nada!
What does RAP apply to?
Only applies to:
Contingent Remainders
Executory Interests
Class Gifts
Options to Buy Land*
Rights of First Refusal to Buy Land*
*unless held by lessee under a lease AND not separated fromt he leasehold interest.
What doesn’t RAP apply to?
Vested Remainders (UNLESS TO A CLASS)
Any future interests created in a grantor.
Definition of RAP
A future interest covered by the RAP is void unless it is certain to vest or fail within 21 years after some life in being.
To A for life, then to B for life if and when B ever passes the bar exam, then to C.
Define all interests.
B has a contigent remainder. And it will either fail or vest within B’s life so it is valid under RAP.
C has a vested remainder, and its not to a class. NOT APPLICABLE UNDER RAP.
To A for life, then to A’s eldest surviving duaghter for her life, then to the Red Cross if and when it ever affiliates with the United Way.
Define Interests.
Daughter has a contigent remainder, since she is presently unascertainable. Remainder is certain to vest or fail AT A’S DEATH so it is valid under RAP.
Red Cross has a contigent remainder. Not certain their remainder will vest or fail within A or Daughter’s lifetime + 21 years. Invalid under RAP.
To the Cancer Society, but if it ever ceases to support cancer research, then to the Heart Fund.
Define Interests
This is an example of the two charities rule which says RAP does not apply. Both interests are valid.
Restraints on Alienation
Forfeiture Restraint
Promissory Restraint
Disabling Restraint
To A, but if A ever transfers this land without my consent, I may reenter and terminate the estate.
What type of restraint on alienation.
Forfeiture Restraint
To A, but A agrees and covenants never to transfer this land without my consent.
What type of restraint on alienation?
Promissory Restraint
To A, but if A ever attempts to transfer this land without my consent, the transfer shall be null and void.
What type of restraint on alienation?
Disabling Restraint
ALWAYS VOID, EXCEPT IN A SPENDTHRIFT TRUST!!!!
Enforcement of Forfeiture and Promissory Restraints on Alienation.
More likely to be upheld if;
1) The interest is less than a FS (life estate or leasehold)
2) The restraint is limited in time OR scope (Cant sell to Joe)
3) The restraint has a reasonable, not illegally or discriminatory purpose (Approval from condo directors of condo assoc.)
4) The land was conveyed for a charitable use.
Trust
Typically involves three parties:
1) The trustor (creates the trust and transfers property into it)
2) The trustee (holds title to the trust property and administers the trust)
3) The beneficiaries receive distributions of profits and property from the trust
A trust may create a trust by:
Deed the corpus to the trustee
Declare himself to be a trustee
Leaving property by will to the trustee
Establishing the trust during life and then pour over additional corpus into the will
Private Trust vs Charitable Trust
Naming of Beneficiaries
Private trust must have beneficiaries who are identifiable by the time their beneficial interest can be enjoyed.
Chartiable Trusts must have a group of beneficiaries who are reasonably numerous (several hundred at least) and not individually identified.
Can a trust include both real and personal property?
Can the beneficial interests by both present or future interests?
Yes.
Yes.
RAP applies to private trust but NOT charitable trusts.
May a beneficiary transfer their beneficial interest in the trust?
May trusts contain a “spendthrift” clause prohibiting transfer?
Yes.
Yes, even though they are disabling restraints on alienation.
Types of concurrent ownership.
Tenancy in common
Joint Tenenact with right of survivorship
