Real Property Flashcards
How can property be transferred (alienated)?
- sale
- gift
- devise
- intestate
How is ownership interest divided and what is the key distinction?
Ownership interests divided in time between present and future interests.
Key distinction of timing: posession
Fee Simple Absolute
Absolute property ownership of infinite duration
- default/presumptive grant
- no future interest associated with a fee simple
Defeasible Fees
(and the three types)
Can last forever but may be terminated by the occurance of an event.
1. Fee simple determinable
2. Fee simple subject to condition subsequent
3. Fee simple subject to executory interest
Freely alienable by owner and upon death, devisable/descendible
Fee Simple Determinable
Present fee simple estate that is limited by specific durational language that terminates automatically upon the happening of the stated event.
“so long as”
“while”
“during”
Fee Simple Subject to Condition Subsequent
Present fee simple that is limited in duration by specific conditional language and upon the occurrence of the event, the grantor has the right to terminate this estate. (termination not automatic)
“but if”
“provided that”
“on condition that”
*Courts have a preference for this over FS determinable.
Fee Simple Subject to an Executory Interest
Present fee simple that is limited by specific conditional language that will end upon the happening of an event and the future interest will vest in a third party (not grantor).
*automatically triggers passage to the third party
Possibility of Reverter
Future interest held by a grantor following a fee simple determinable.
Interest vests automatically after the durational period ends.
Right of Entry
Future interest held by the grantor following a fee simple subject to condition subsequent.
Does not vest automatically; it must be reclaimed.
Executory Interest
Future interest that will divest (cut short) an earlier interest held by a third party (a prior vested interest) upon the occurrence of a specified condition
Title automatically passes to third party.
2 types:
Springing executory interest
Shifting executory interest
Springing Executory Interest
Divests the grantor
Shifting executory interest
Divests a prior grantee
- estate shifts from one grantee to another on the happening of the condition
Life Estate
Present estate that is limited in duration by a life.
“for life”
Ends naturally when the measuring life ends.
Transferable but cannot be passed by devise or intestacy.
Reversion
Future interest following a life estate: If possession of the land goes back to the grantor after the life estate ends, the the grantor retains a reversion
*grantor takes property in fee simple absolute
Remainder
Future interests following a life estate: If possession of the land goes to a third party (transferee) after the life estate ends, then the third party takes a remainder.
*third party takes property in fee simple absolute
Can be vested or contingent.
Vested Remainder
- Given to an ascertained grantee (someone who can be identified), AND
- Not subject to a condition (no condition that must be satisfied in order for the interest to vest)
*if either condition not met, it is a contingent remainder
Can be vested remainder subject to open/partial divestment or vested remainder subject to complete divestment.
Vested Remainder Subject to Open
- Vested remainder in a class gift, AND
- Full class membership is unknown
*RAP applies to a Vested Remainder Subject to Open–Rule of Convenience is used to avoid application of RAP to class gift.
Rule of Convenience
A class closing mechanism to avoid application of RAP to a class gift.
If grant does not have an express closing date, the Rule of Convenience closes the class when any member of the class becomes entitled to immediate possession.
*an interpretive rule
Dotrine of Worthier Title
Prevents a grantor from creating a remainder in the grantor’s heirs.
*applies in a minority of jurisdictions to an inter vivos conveyance
Rule in Shelley’s Case
Prevents a grantor from creating a remainder in the grantor’s heirs. It uses the doctrine of merger to create a fee simple.
*most jurisdictions have abolished – grantee’s heirs take future interest as conveyed in the deed
e.g., “to Alice for life, then to Alice’s heirs”
Under the Rule in Shelley’s Case, Alice has a fee simple interest.
When does waste come into play?
3 types of waste?
Comes into play when more than one party has an interest in the same piece of real property.
- affirmative
- permissive
- ameliorative
Affirmative Waste
waste caused by voluntary conoduct which causes a decrease in value
Permissive Waste
Waste caused by neglect toward the property which causes a decrease in value
Ameliorative Waste
Special situation where a life tenant or other person in possession changes the value of the property and actually increases the value of the property.
Rule Against Perpetuities
Under RAP, specific future interests are valid only if they must vest or fail by the end of a life + 21 years ( 2 generations)
Purpose is to prevent remote vesting and tests for certainty and operates like a SOL for contingent future interests
What kind of interests does the Rule Against Perpetuities apply to?
- Contingent remainders
- Executory interests
- Class gifts (subject to open), if not closed by rule of convenience
*does not apply to vested remainders unless subject to open
Rule against Perpetuities
Relevant Life and Validating Life
& Requirements
Relevant Life: person who affects vesting, usually mentioned or implied by the grant (e.g., prior life tenant, the parent whose conveyance is made to a child)
Validating life: Person who tells us whether or not the interest vests within the perpetutities period (lifetime plus 21 years)
- must have been alive when the interests were created
- can validate her own interest
- if no validating life, then the interest is no good and we strike it from the grant.
- if there is validating life, the interest is good.
Special Rule pertaining to RAP and Class Gifts
If the gift to any member of the class is void under RAP, then the gift is void as to all members of the class – bad to one, bad as to all.
Exceptions to RAP
- Charities - RAP does not apply to a gift from one charity to another charity
- Options - RAP does not apply to an option held by a current tenant to purchase a fee interest in the leasehold property, nor does it apply to an option (or right of first refusal) in a commercial transaction
RAP issues
“Wait and See” Approach
Traditional RAP softened by Uniform Statutory Rule Against Perpetuities
- the most common modern approach, wait and see if an interest subject to RAP vests within the perpetuities period
- some of these states changed vesting period to 90 days
depends on jurisdiction, bar exam tests traditional RAP
RAP issues
Cy Pres
An equitable doctrine (borrowed from the law of tursts) that allows a court to reform a transfer to avoid RAP
Concurrent Estates & the 3 types
Definition: Ownership or possession of real property by two or more persons simultaneously.
Basic rule: Concurrent owners each have right to use or possess the whole of the property.
Concurrent owners can contract out of this basic rule.
- Tenancy in common
- Joint tenancy
- Tenancy by the entirety (minority)
Tenancy in Common
Concurrent owners have separate but undivided interests in the property.
There is no right of survivorship - each co-tenant can transfer the properly freely at death as well as during life.
Default concurrent interest - any conveyance to more than one person is presumed to be a tenancy in common.
Joint Tenancy
& how is it created
& the Four Unities required to create
The defining characteristic is the right of survivorship, whereby the surviving joint tenants automatically take the deceased tenant’s interest.
- Grantor must make a clear expression of intent, AND
- Must have survivorship language (e.g., “as joint tenants with a right of survivorship)
4 Unities: PITT
1. Possession - every joint tenant has an equal right to possess the whole of the property
2. Interest - Joint tenants must have an equal share of the same type of interest
3. Time - Joint tenants must receive their interests at the same time
4. Title - Joint tenants must receive their interests in the same instrument of title
Common situations where one of the 4 Unities to a Joint Tenancy is severed and joint tenancy is terminated and turned into a tenancy in common?
Inter vivos transfers- transfer during life will sever the right of survivorship and convert the estate into a tenancy in common
Mortgages- a joint tenant grants a mortgage interest in the joint tenancy to a creditor
- majority - follows a lien theory - mortgage is treated as a liena nd does not destroy the joint tenancy
- minority - title theory - mortgage severs title and tenancy between the joint tenants and the creditor is converted into a tenancy in common
Leases - a joint tenant leases her share in the property to a tenant
- some jurisdictions hold that lease severs the joint tenancy
- other jurisdictions treate lease as a temporary suspension of the joint tenancy
Tenancy by the Entirety
Joint tenancy between married peoplel, has a right of survivorship, tenants by entirety cannot alienate/encumber shares without consent of spouse
General Rule re: Possession and Use in concurrent estates
Each co-tenant has a right to possess all of the property, regardless of their share/type of co-tenancy
(unless agreed otherwise)
Concurrent Estates
Ouster
Co-tenant in possession denies another co-tenant access to the property
Remedies for ousted tenant:
- get an injunction granting access to the property, and/or
- recover damages for the value of the use while the co-tenant was unable to access the property
*have to ask for access before you can claim ouster
Concurrent Estates
Third party rents
Rent received from a third party’s ownership of the property (minus operating expenses) are divided based on ownership interests of each co-tenant
Anna 10% interest
Ben 90% interest
Carmen rents for property for $1000 a month
Anna entitled to $100
Ben entitled to $900
Concurrent Estates
Operating Expenses
Necessary charges, such as taxes or mortgage payments. Divided based on ownership interests of each co-tenant. A co-tenant can collect contribution from other co-tenants for payments in excess of her share of the operating expenses.
Concurrent Estates
Repairs
no right to reimbursement from co-tenants for necessary repairs
can get credit in partition action though
Concurrent Estates
Improvements
no right to reimburse
can get credit in partition action
Concurrent Estates
Partition Action
a unilateral right available to all holders of a tenancy in common or joint tenancy
Court will divide the property into distinct portions
- partition in kind (physical division) - preferred by courts
- partition by sale - proceeds from sale divided among co-tenants based on their ownership interests
*Courts will order a partition by sale if physical partition is not practical or not fair.
Co-tenants can also agree not to partition as long as
1. agreement is clear AND
2. time limit is reasonable
Fair Housing Act
FHA prohibits:
- discrimination in the sale, rental, and financing of dwellings.
- advertising that states a discriminatory preference (applies more broadly)
- requiring different rents
- falsely denying that a unit is available
- providing different services to facilities (exception: disability acc)
FHA allows for both intent (disparate treatment) and effect (disparate impact) cases
Prohibited behavior must have a nexus to the protected basis
Who’s covered under the FHA?
multi-family residential housing
Who’s not covered by the FHA?
- single family housing that is sold or rented without a broker
- owner-occupied buildings with four or fewer living units (“Ms. Murphy’s boarding house”)
- Religious organizations and private clubs
Top two can violate FHA through discriminatory advertising though but religious org/private clubs can list their restrictions in advertising.
