Real Property Flashcards

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1
Q

Estates in Land

A

Possessory interest in land

May be a present possessory interest - present estates, OR
Future Interests - becomes possessory in the future

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2
Q

Fee Simple Absolute

A

Present Possessory Estate

“full ownership of real property” - Created with language: “To A” or “To A and his heirs” (and his heirs language was necessary at common law, but not required today

  • Infinite duration
  • Freely transferable, devisable by will, and descendible through intestacy
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3
Q

Defeasible Fees

A

Fee simple estates (uncertain or potentially infinite duration) that can be terminated upon the happening of a stated event

  • To be defeasible has to be capable of forfeiture
  • Subject to the Rule Against Perpetuities (unless property is to revert to the grantor)

Three Types

  1. Fee Simple Determinable
  2. Fee Simple Subject to Condition Subsequent
  3. Fee Simple Subject to an Executory Interest
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4
Q

Fee Simple Determinable

A

Terminates upon the happening of a stated event and automatically reverts to the grantor (possibility of reverter)

Creation: Durational language (i.e. “to A for so long as, to A while, to A during, to A until…)

Transferable, devisable by will, and descendible through intestacy always subject to the attached condition

Example: Paul conveys Blackacre “to Ringo so long as the premises are used as a recording studio.”

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5
Q

Possibility of Reverter

A

Accompanying Future Interest in Grantor to a Fee Simple Determinable

The estate automatically reverts back to the grantor upon the happening of the stated event

FSDPOR

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6
Q

Fee Simple Subject to Condition Subsequent

A

Estate in which the grantor reserves the right to terminate the estate upon the happening of a stated event, meaning the state does not automatically terminate - the grantor must take some action

Creation:

  1. Use of conditional words (“upon the condition that, provided that, but if, and if it happens that”)
  2. An explicit statement of the grantor’s right to re-enter

Most courts hold that the right of entry is not transferable inter vivos, but are devisable by will, and descendible through intestacy

Example: B conveys “To S, but if S ever serves alcohol on site, B reserves the right to re-enter and retake”

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7
Q

Fee Simple Subject to an Executory Interest

A

Terminates upon the happening of a stated event and then passes to a third party rather than back to the grantor or giving the grantor a right to terminate

Third Party has an executory interest

Creation: look for a third party who will take upon forfeiture of a fee simple estate

If the condition occurs, the estate is automatically forfeited in favor of someone other than the grantor

Example: To A and his heirs for so long as liquor is not sold on the premises; in that event, to B. B has an executory interest

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8
Q

Rules of Construction for Defeasible Fees

A

Words of desire, hope, or intention do not create a defeasible fee

Absolute Restraints on Alienation are Void (Example: O conveys “to A so long as she never attempts to sell” - in this case, the language of restraint is void, and A is left with a fee simple absolute)

Conditions and Limitations Violating Public Policy are Void - i.e. condition to penalize marriage or encourage divorce will likely be struck down

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9
Q

FLORIDA DISTINCTION: Rules of Construction

A

FL Statute limits the duration of reverters or forfeiture provisions to 21 years from the date of the deed conveying the realty

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10
Q

Life Estate

A

Ownership interest for life

Created:

  1. For the life of the grantee (To A for life)
  2. Life Estate Pur Autre Vie (life of another - To A, for the life of B) Also results if when a life tenant conveys their life estate to another
    • Example: A, the holder of the life estate, conveys their interest to B. B has a life estate for the life of A)

Future Interests: If held by O - Reversion, if held by a third party - Remainder

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11
Q

Life Estates: Rights and Duties of the Life Tenant

A

Doctrine of Waste: life tenant is entitled to all ordinary uses and profits from the land, but must not commit waste

  1. Voluntary Waste: affirmative, actual, overt conduct causing a drop in value
    1. May not consume or exploit natural resources on the property
    2. Exception: If mining was done on the property before the life estate began, then the life tenant may continue to mine ONLY IN MINES ALREADY OPEN
  2. Permissive Waste - failure to take reasonable measures to protect land (neglect)
    1. FL DISTINCTION: if a life tenant makes improvements, generally they cannot demand that the owner of the remainder pay any part of the cost unless they expressly agreed otherwise. But a life tenant may complete improvements begun by the donor of the estate and demand contribution from the remainderman
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12
Q

Voluntary Waste

A

Voluntary Waste: affirmative, actual, overt conduct causing a drop in value

May not consume or exploit natural resources on the property

Exception: If mining was done on the property before the life estate began, then the life tenant may continue to mine ONLY IN MINES ALREADY OPEN

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13
Q

Permissive Waste

A

Permissive Waste - failure to take reasonable measures to protect land (neglect)

FL DISTINCTION: if a life tenant makes improvements, generally they cannot demand that the owner of the remainder pay any part of the cost unless they expressly agreed otherwise. But a life tenant may complete improvements begun by the donor of the estate and demand contribution from the remainderman

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14
Q

FLORIDA DISTINCTION: Waste and Improvements

A

If a life tenant makes improvements, generally hey cannot demand that the owner of the remainder pay any part of the cost unless they expressly agreed otherwise

But - a life tenant may compete improvements begun by the donor of the estate and demand contribution from the remaindermen

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15
Q

Ameliorative Waste

A

Change that benefits the property economically.

A life tenant may not engage in acts that will enhance a property’s value unless all future interest holders are known and consent

Today: a life tenant may alter or demolish existing buildings if:

  1. the market value of the future interests is not diminished and EITHER
  2. the remindermen do not object OR
  3. A substantial and permanent change in the neighborhood conditions has deprived the property in its current form of reasonable productivity or usefulness
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16
Q

FLORIDA DISTINCTION: Waste

A

A life tenant may not permanently reduce the value of the estate of the remaindermen and cannot acquire an interest adverse to that of the remaindermen. While a life tenant may be a purchaser at a sale to satisfy an encumbrance, the life tenant who allows the property to be sold for taxes or the satisfaction of an encumbrance cannot acquire a title adverse to the remainderman or revisioner by purchasing at the sale themselves or through and intermediary.

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17
Q

Future Interests

A

An estate that will or may give the owner possession in the future.

A present, legally protected right in property - not expectancy

Six Categories of Future Interests (see additional cards)

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18
Q

Adverse Possession and Future Interests

A
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19
Q

Future Interest: Definition

A

A future interest gives its holder the right or possibility of future possession of an estate.

Present, legally protected right

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20
Q

6 Categories of Future Interests

A

Future Interest in Transferor

  1. A possibility of Reverter
  2. A right of entry
  3. a reversion

Future Interests In Someone Else

  1. A contingent remainder
  2. A vested remainder (three types)
  3. A executory Interest (two types)
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21
Q

Reverter (Possibility Of)

A

Accompanies the Fee Simple Determinable - automatic reversion if the condition of the fee simple determinable is breached

Automatically retain a possibility of reverter.

Possibility of reverter is transferable, devisable by will, and descendible by intestacy

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22
Q

Right of Entry

A

Accompanies the Fee Simple Subject to Condition Subsequent

Power of termination - if the stated event occurs then the transferor has the right to terminate the estate, but it’s not automatic - the grantor must take some action

Not transferable inter vivos (generally and in most states) but are devisable and descendible

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23
Q

Transferable (Alienable) Inter Vivos

A

Means the interest is transferable within the holders lifetime (see/gift/or otherwise transfer)

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24
Q

Devisable

A

Passing by will (capable of being passed by will)

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25
Q

Descendible

A

To pass to heirs through statutes of intestate

26
Q

Reversion

A

Estate left in the grantor who conveys less than they own

  • Example:* O, owning land in fee simple, conveys “To A for Life” - O has a reversion in fee simple. O (or her successors) will be entitled to present possession of the land when the granted estate terminated
  • Example*: O, owning a life estate in land, leases it “to A for 20 years.” O has a reversion in a life estate. If O is alive when A’s lease expires, title will revert to O for life.
  • If 10 years after the transfer, O dies, then A’s lease will come to an end. He was given a lease by someone holding a life estate. O cannot convey a greater interest that she has

Reversions are transferable, devisable by will, and descendible by inheritance

Holder of a reversion can sue a possessory owner for waster and may recover against third-party wrongdoers for damages to the property (to the extent of the injury to the reversion)

27
Q

Vesting of Reversionary Interests

A

All reversionary interests are vested and, thus, not subject to the Rule Against Perpetuities

28
Q

Future Interests in Transferees

A

If a future interest is held by someone other than the grantor it has to be either:

  1. A Contingent Remainder OR
  2. A Vested Remainder (indefeasibly vested, vested subject to complete defeasance and the vested remainder subject to open)
  3. An Executory Interest (shifting executory and springing executory)
29
Q

Remainders

A

A remainder is a future interest in a third person that can become possessory on the natural expiration of ht preceding estate (never in O)

Must be expressly created in the instrument creating the preceding possessory estate

Cannot divest a prior estate, and cannot follow a time gap after the preceding estate

Can be vested or contingent

Examples:

  1. O conveys “to A for life, then to B and his heirs” - B has a remainder
  2. O conveys “to A for life, then to B and his heirs one day after A’s death” - B does not have a remainder, because there is a gap
30
Q

Remaindermen

A

Remainders are sociable, they never travel alone - remainders always accompany a preceding estate of known, fixed duration (such as a life estate or term of years)

Remainders wait for a proceeding estate to come to natural end - don’t come into possession through forfeiture

Patient and Polite: A remainder never cuts short or divests the prior taker. It waits it’s turn and won’t take until the present life estate or term of years comes to its conclusion

31
Q

Contingent Remainder

A

A remainder is contingent if: (1) it’s created in unborn or unascertained persons, or (2) it’s subject to a condition precedent, or both.

A remainder may be contingent as to a person or as to an event

32
Q

Unborn or Unascertained Persons

A

A remainder created in in unborn or unascertained persons is contingent because until the remainderman is ascertained, no one is ready to take possession if the preceding estate ends

Example: “To A for life, and on A’s death, per stripes to such of A’s descendants as survive her.” A the time of this disposition, A is in poor health and she has two adult children (B&C) who are healthy. Sate of title: A has a life estate; there is a contingent remainder in such of A’s descendants as survive A; the transferor has a reversion (for A may not be survived by any descendants)

33
Q

Subject to Condition Precedent

A

A condition is precedent if it must be satisfied before the remainderman has a right to possession.

Look for the condition to appear before the language creating the remainder or for it to be woven into the grant to the remainderman

Pre-requisite to the remainderman’s admission - something they must do in order to succeed in taking possession

Example: “To A for life, and then to B if she graduates from college.” A is alive. B is now in high school. Before B can take, she must graduate from college. She has not yet satisfied this condition precedent

  • B has a contingent remainder
  • O has reversion
  • If B graduates during A’s lifetime, the contingent remainder becomes indefeasibly vested remainder
34
Q

Destructibility of Contingent Remainders

A

At common law, a contingent remainder had to vest prior to or upon termination of the preceding freehold estate or it was destroyed

Most states today have abolished this rule. Today property reverts to grantor; springing executory interest upon meeting condition

35
Q

Rule in Shelley’s Case (Rule Against Remainders in Grantee’s Heirs)

A

At common law if the same interest created a life estate in A and gave the remainder only to A’s heirs, the remainder was not recognized, and A took the life estate and the remainder

Abolished in most jurisdictions

36
Q

Doctrine of Worthier Title

A

A remainder in the grantor’s heirs is ineffective, so grantor has a reversion.

Generally, this is treated as a rule of construction only, grantor’s heirs are said to have a contingent remainder

37
Q

FLORIDA DISTINCTION: Doctrine of Worthier Title

A

Abolished in Florida - a remainder to the grantor’s heirs does not presumptively create a reversionary interest in the grantor

38
Q

Vested Remainders

A

A vested remainder is one created in an existing and ascertained person, and not subject to a condition precedent

Three Types of Vested Remainders:

  1. Indefeasibly Vested Remainder
  2. Vested Remainder Subject to Total Divestment (Subject to Complete Defeasance)
  3. Vested Remainder Subject to Open
39
Q

Indefeasibly Vested Remainder

A

Vested remainder that is not subject to divestment or diminution. The holder is certain to acquire an estate in the future, with no strings or conditions attached.

40
Q

Vested Remainder Subject to Total Divestment

A

Vested remainder subject to a condition subsequent. The remainderman exists, his taking is not subject to any condition precedent. However, his right to possession could be cut short because of a condition subsequent.

Example: O conveys “to A for life, then to B and his heirs. But if B dies unmarried, then to C and his heirs.” B is alive and unmarried. He has a vested remainder subject to total divestment by C’s executory interest

41
Q

Condition Subsequent v. Condition Precedent

A

Condition Precedent: appears before language introducing you to the remainderman

Condition Subsequent: appears after language that, alone and set off by commas, creates remainders

*Whenever you have ambiguous language, the preference is for vested remainders subject to divestment (CS) rather than contingent remainders or executive interests

42
Q

Vested Remainder Subject to Open

A

Vested remainder created in a class of persons that is certain to become possessory, but is subject to diminution (i.e. by the birth of additional persons)

43
Q

Class Gifts

A

A class is a group of persons having a common characteristic (children, nephews). The share of each member is determined by the number of people in the class

A class gift of a remainder may be vested subject to open (where at least one group member exists) or contingent (where all group members are unascertained)

44
Q

When does the Class Close

A

The Rule of Convenience

A class is open when it’s still possible for others to join in

A class is closed when no other can join in - in the absence of express contrary intent, a class closes when some members of the class can call for distribution of their share of the class gift (i.e. when any member of the class can demand possession)

45
Q

Survival of the Class

A

Survival of a class member to the time of closing is usually unnecessary to share in a future gift - unless survival was made an express condition (example: to A for life and then to her surviving children)

Some terms are construed to create implied survivorship conditions (widow, issue, heirs, next of kin)

46
Q

Executory Interests

A

Future Interest in third parties that either diest a transferee’s preceding freehold estate (shifting interest) or follow a gap in possession or cut short a grantor’s estate (springing interests)

Executory Interests must take effect by cutting short some interest - either in another person or in the grantor or the grantor’s heirs

47
Q

Shifting Executory Interest

A

Always follows a defeasible fee and cuts short someone other than the grantor

Example: To A for life, then to B and his heirs; but if B predeceases A, then to C and his heirs. (A is alive; B is alive), C has a shifting executory interest because if B predeceases A, C will take, thereby divesting B’s estate of B’s interest.

48
Q

Springing Executory Interest

A

Cuts short O’s interest (the grantor)

Example: O conveys “To A, if and when she becomes a lawyer”

49
Q

Transferability of Remainders and Executory Interests

A

Vested remainders are fully transferable, descendible by intestacy, and devisable by will. At common law, contingent remainders and executory interests were not transferable inter vivos, but most courts today hold that they are freely transferable

Contingent remainders and executory interests are descendible and devisable, provided survival is not a condition to the interest’s taking

*TIP: Any future interest that is transferable is subject to involuntary transfer; that is, it is reachable by creditors

50
Q

The Rule Against Perpetuities

A

Certain kinds of future interests are void if there is any possibility, however remote, that the interest might vest more than 21 years after a person alive at the time of the grant has died.

  • Applies only to contingent remainders, executory interests, vested remainders subject to open, options to purchase, and rights of first refusal. The grantor’s interests (reversions, possibilities of reverter, rights of entry) are safe from the rule
51
Q

When Does the Perpetuities Period Begin to Run

A

The time the interest is created and the perpetuities period begins to run depends on the instrument and the interest created

  • Interests Granted by Will: runs from the date of the testator’s death
  • For Deeds: it is the date of delivery
52
Q

Must Vest

A

An interest vests for purposes of the Rule when it becomes:

  1. Possessory, or
  2. An indefeasibly vested remainder or a vested remainder subject to total divestment

The issue is when the interest could possibly vest - examine the grant as of the time of its creation and be sure that if the interest vests it will be within the period (the life in being plus 21 years). If there’s any possibility that it could vest beyond the period, it’s void.

53
Q

Lives in Being

A

Unless other measuring lives are specified, one connected with the vesting of the interest is used.

Looking for a person alive at the date of the conveyance whose life and/or death is relevant to the prescribed condition’s occurence

54
Q

Interests Exempt from the Rule

A

Except for vested remainders subject to open, the Rule does not apply to vested interests.

Does not apply to any disposition from one charity to another, and an exception for options to purchase held by a current tenant.

55
Q

Effect of Violation of the Rule

A

Violation of the Rule destroys only the offending interest.

56
Q

Four-Step Technique for Assessing Rule Against Perpetuities Problems

A

Step 1: Determine the Interests

  • Why future interests have been created by the conveyance and whether the rule could apply to that interest
  • Potentially applies only to contingent remainders, executory interests, and certain vested remainders subject to open

Step 2: How Does the Future Interest Holder Take?

  • What has to happen for the future interest holder to take - does the holder of a previous estate need to die? Holder need to have children? Certain conditions have to be met?

Step 3: Find the Measuring Life

  • Look for people alive at the date of the conveyance whose lives and/or deaths are relevant to what has to happen for the future interest holder to take

Step 4: When Will We Know if the Future Interest Holder Can Take?

  • Will we know for sure within 21 years of the death of the measuring life if the future interest holders can take - if so the conveyance is good
  • In other words “at time of creation will we know for sure within 21 years of measuring lifetime if suspect future interest holder is certain to take or not”
  • If we won’t know for sure if the interest will vest within 21 years of the death of the measuring life, the future interest is void
57
Q

The Rule in Operation - Common Pitfalls

A
  1. Bright Line Rule - Executory Interest with No Time Limit Violates the Rule
  2. Age Contingency Beyond Age 21 in Open Class
  3. Fertile Octogenarien
  4. Unborn Widow or Widower
  5. Administrative Contingency
  6. Options and Rights of Furst Refusal
58
Q

Reform of the RAP

A

Wait and See or Second Look Doctrine: majority reform effort - the validity of any suspect future interest is determined on the basis of the facts as they exist at the conclusion of our measuring life

Uniform Statutory Rule Against Perpetuities: Codifies the common law RAP and, in addition, provides for an alternative 90-year vesting period

59
Q

FLORIDA DISTINCTION: Uniform Statutory Rule Against Perpetuities

A

Nonvested Property interest (real or personal) is invalid unless:

  1. when the interest is created it is certain to vest or terminate within the common law period; or
  2. it actually vests or terminates within 90 years after its creation
60
Q

The Rule Against Restraints on Alienation

A

Three Types of Restraints on Alienation:

  1. Disabling restraints, under which attempted transfers are ineffective
  2. Forfeiture restraints, under which an attempted transfer forfeits the interests; and
  3. Promissory restraints, under which an attempted transfer breaches a covenant

A disabling restraint on any legal interest is void. Forfeiture and promissory restrains may be valid depending on the nature of the restraint and the interest void