Real Property Flashcards
Fee Simple Determinable
Terminates upon the happening of a stated event and automatically reverts to the grantor.
Look for: “For so long as,” “while,” “during,” or “until.”
Grantor retains Possibility of Reverter, which automatically arises.
Fee Simple Subject to Condition Subsequent
Grantor reserves the right to terminate the estate upon the happening of a stated event.
Look for: “Upon condition that,” “Provided that,” “but if,” and “if it happens that.”
Right to terminate, reserved by the grantor is called Right of Entry, and it must be EXPRESSLY reserved.
Fee Simple Subject to an Executory Interest
Terminates upon the happening of a stated event and then passes to a third party, rather than reverting to the grantor or giving a right to terminate, the third party has an Executory Interest.
Examples:
“To A and his heirs for so long as liquor is not sold on the premises; in that event, to B.”
“Blackacre to XYZ Church, but if it is used for anything other than church purposes, then to B.”
Life Estate
Measured by the life or lives of one or more persons. It may be created by operation of law or by conveyance.
Reversion
Estate left in a grantor who conveys less than she owns (O conveys “to A for life”; O has a reversion).
Does not need to be expressly reserved.
Remainder
A future interest in a third person that can become possessory on the natural expiration of the preceding estate.
Must be EXPRESSLY created in the instrument creating the preceding possessory estate.
O conveys “to A for life, then to B and his heirs.” (B has remainder)
O conveys “to A for life, then to B and his heirs one day after A’s death”; (B does NOT have a remainder, bc gap).
Indefeasibly Vested Remainder
Vested remainder that is not subject to divestment or diminution.
Vested Remainder Subject to Open
Created in a class of persons (“children”) that is certain to become possessory, but is subject to diminution– e.g. by the birth of additional persons who will share int he remainder as a class.
Vested Remainder Subject to Total Divestment
Vested remainder that is subject to a condition subsequent.
O conveys “to A for life, then to B and his heirs; but if B dies unmarried, then to C and his heirs.”
Contingent Remainder
Remainders created in unborn or unascertained persons, or subject to a condition precedent.
Executory Interests
Future interests in third parties that either divest a transferee’s preceding freehold estate (“shifting interest”) or follow a gap in possession or cut short a grantor’s estate (“springing interests”).
To which type of interests does RAP apply?
(1) Vested remainders subject to open;
(2) Contingent remainders;
(3) Executory Interests
“Subject to” the mortgage
Mortgagor remains personally liable on the mortgage and subsequent grantees do not become personally liable on the mortgage.
“Assumes” the mortgage
Subsequent grantee who explicitly assumes the mortgage will be liable on it.
Buyer is primarily liable and the original debtor-mortgager remains secondarily liable.
Mortgagee in Possession
When the mortgagor abandons the premises and stops paying their mortgage, the mortgagee is entitled to take possession and administer the property to maintain the value of his security interest.
When will conveyance of land be valid?
When there is (1) execution and (2) delivery of the deed.
Delivery of a Deed
Established by a proven intent to pass title, even if the title document was never physically given to the transferee.
Doctrine of Estoppel by Deed
If a grantor purports to convey title that he does not actually hold, his subsequent acquisition of title to the property will automatically bring into effect the prior benefit conveyed to the grantee.
“No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof, unless it is recorded.”
Notice Statute
Effect: Subsequent BFP prevails
“No conveyance or mortgage of an interest in land is valid against any subsequent purchaser whose conveyance is first recorded.”
Race Statute
Effect: Grantee who records first prevails.
“No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof whose conveyance is first recorded.”
Race-Notice Statute
Effect: Subsequent BFP who records first prevails.
Equitable Mortgage
If the court concludes, by clear and convincing evidence, that the deed was really given for security purposes, they will treat it as an “equitable” mortgage and require that the creditor foreclose it by judicial action, like any other mortgage.
Factors: (1) existence of a debt or promise of payment by the deed’s grantor; (2) the grantee’s promise to return the land if the debt is paid; (3) the fact that the amount advanced to the grantor/debtor was much lower than the value of the property; (4) the degree of the grantor’s financial distress; and (5) the parties’ prior negotiations.
