Real Property Flashcards
What are the 3 forms of concurrent ownership?
1) Joint tenancy = two or more own w/ a right of survivorship 2) Tenancy by the entirety = a protected marital interest b/t married partners w/ the right of survivorship 3) Tenancy in common = two or more own w/ NO right of survivorship
What are the features of a joint tenancy?
1) The right of survivorship: when 1 JT dies, his share passes AUTOMATICALLY to surviving JTs NOTE: if second to LAST JT dies (i.e. only 1 is left), the JT ENDS 2) A JT’s interest is alienable but is NOT devisable (via will) or descendable (via intestacy) b/c of the right of survivorship
How do you create a joint tenancy? NOTE: NY Distinction
1) Need the 4 unities (“T-TIP”)…JT’s must take their interests: Time: at the same time Title: by the same title (instrument, e.g. deed) Interest: w/ identical interests Posess: w/ right to posess the whole 2) Grantor must CLEARLY/EXPLICITLY express the right of survivorship 3) (If want to self-create JT w/ 3d party) Use a straw (a middleman) First, convey to straw Second, straw conveys back to grantor and 3rd party so 4 unities are present NY DISTINCTION: by statute there is NO need to use a straw in NY
What are the 3 ways tosevering a joint tenancy? NOTE: NY Distinction
“S-P-A-M” 1) SALE: a joint tenant can sell/trnfr her interest during her lifetime (EVEN w/o the knowledge/consent of the other tenants) Buyer becomes a tenant in common If there were originally 3 or more JTs, then among the remaining joint tenants the joint tenancy survives Equitable conversion: simply entering into Kto sell severs JT 2) PARTITION: 3 variations to partition and sever a JT Voluntary Agreement: peaceful severance (no need for ct to step in) Partition in Kind: judicial action for physical division IF in best interests of ALL parties (more likely if the property is bountiful) Forced Sale: judicial actionIF sale in best interests of ALL; proceeds divided proportionally (more likely when JT is in a single property) 3) AND 4) MORTGAGE: depends on jx theory… Title Theory: mortgage/lien severs (minority rule) Lien Theory: mortgage/lien does NOT sever (NY DISTINCTION: NYfollows this rule)
What are the features of the tenancy by the entirety? NOTE: NY Distinction
Tenancy by the entirety = a protected marital interest b/t married partners w/ the right of survivorship This is a VERY protected form of co-ownership Creditors of only ONE spouse can’t touch this tenancy NY DISTINCTION: in NY, one spouse may mtg his interest and his creditor may enforce against THAT interest, but ONLY as to the debtor spouse’s share. The right of survivorship MUST NOT be compromised Neither tenant (spouse), acting ALONE, can defeat the right of survivorship by unilateral transfer to a 3d party DEATH or DIVORCE will severa TBTE
How can a tenancy by the entirety be created?
It is created b/t MARRIED partners w/ the RIGHT of survivorship It arrises PRESUMPTIVELY in any conveyance to married partners (unless stated otherwise by the GRANTOR)
What are the features of a tenancy in common?
Tenancy in common = two or more own w/ NO right of survivorship each co-tenant owns an INDIVIDUAL part and each has a right to posess the WHOLE each interest is devisable (by will); descendable (by intestacy); AND alienable; there are NO survivorship rights b/t tenants
What are the 5rights AND responsibilities of co-tenants (tenancy in common)? NOTE: NY Distinction
1) Posession: each CT is entitled to posess and enjoy the WHOLE (otherwise wrongful ouster) 2) Rent: CT in exclusive possession (w/o ouster) is not liable to other CTs for rent, BUT IF CT rents all/part of TIC to 3rd party, must pay other CTs proportionate share of rental income 3) Adverse possession: unless ouster, NO adverse possession by another CT b/c NO hostility NY DISTINCTION: in NY, a CT may acq full title by adverse posession if he has EXCLUSIVE posession for 20 CONTINUOUS yrs (i.e. an implied ouster) 4) Carrying costs/improvements: each CT responsible for: Proportionate share carrying costs (tax/mortgage) Proportionate share of costs of necessary repairs (if other CTs notified by repairing CT) BUT NOT responsible for “improvements” made by another CT (subjective) 5) Waste: a CT must not commit waste (voluntary, permissive, ameloriative) Other CTs can bring a waste action DURING the life of the tenancy in common
How can a tenancy in common be severed?
Severance can be by (i) voluntary; (ii) partition in kind; OR (iii) forced sale At partition, for any improvements… the improving CT is entitled to a credit equal to any increase in value caused by her efforts; OR the “improving” CT would bear full liablity for any drop in value caused by her efforts
What is a fee simple absolute?
Fee simple absolute = the ABSOLUTE ownership of potentially infinite duration 1)Language used to create: “To A and his heirs” “To A” 2) Transferability: Devisable (can pass by will) Descendible (will pass via statutes of intestacy if holder has no will) Alienable (capable of inter vivos transfer) 3) Future Interest: NO accompanying future interest
What is a fee tail?
Fee tail = estate where inheritability is LTD to lineal heirs, which lasts as long as there are lineal blood decendants of grantee NOTE: most jx have ABOLISHED fee tails; an attempt to create a fee tail today leads to fee simple absolute 1)Language used to create: “To A and his heirs of his body” 2) Transferability: Passes automatically to grantee’s lineal decendants 3) Future Interest: Reversion (if held by grantor)
What are the 3 defeasible fees?
1) Fee Simple Determinable 2) Fee Simple Subject to Condition Subsequent 3) Fee Simple Subject to Executory Limitation
What is a fee simple determinable? NOTE: NY Distinction
Fee simple determinable = a defeasible fee that terminates upon the occurance of a stated event and AUTOMATICALLY reverts back to grantor NY DISTINCTION: In NY the fee simple determinable is called a Fee on limitation 1)Language used to create: “To A… for so long as [event…] during [event…] while [event…] until [event…] NOTE: words of desire, hope, or intention are INSUFFICIENT to create a defeasible fee 2) Transferability (ALL subject to condition): Devisable (can pass by will) Descendible (will pass via statutes of intestacy if holder has no will) Alienable (capable of inter vivos transfer) NOTE: an absolute (i.e. forever)restraint on alienability as a condition IS void (e.g. “To A so long as she never attempts to sell”) 3) Future Interest: Possibility of reverter
What is a fee simple subject to condition subsequent? NOTE: NY Distinction
Fee simple subject to condition subsequent= a defeasible fee that gives grantor the RIGHT to terminate upon the occurance of a stated event (i.e. must file an ejectment action) NY DISTINCTION: In NY the fee simple subject to condition subsequent is called a fee on condition 1)Language used to create: “To A,… but if [event…], upon condition that [event…], provided that [event…], if it happens that [event…] …grantor reserves the right to reenter and retake” NOTE: words of desire, hope, or intention are INSUFFICIENT to create a defeasible fee 2) Transferability (ALL subject to condition): Devisable (can pass by will) Descendible (will pass via statutes of intestacy if holder has no will) Alienable (capable of inter vivos transfer) NOTE: an absolute (i.e. forever) restraint on alienability as a condition IS void (e.g. “To A so long as she never attempts to sell”) 3) Future Interest: Right of entry/power of termination (held by grantor) NY DISTINCTION: In NY right of reentry is known as right of reaquisition
What is a fee simple subject to executory interest?
Fee simple subject to executory interest= a defeasible fee that terminates upon a stated event and then passes to a third party (vs. reversion to grantor) 1)Language used to create: Fee simple s/t shifting executory interest… “To A,… for so long as [event…], while[event…], during[event…], until[event…] …then to B” Fee simple s/t springing executory interest… To A if and when [even…] NOTE: words of desire, hope, or intention are INSUFFICIENT to create a defeasible fee 2) Transferability (ALL subject to condition): Devisable (can pass by will) Descendible (will pass via statutes of intestacy if holder has no will) Alienable (capable of inter vivos transfer) NOTE: an absolute (i.e. forever) restraint on alienability as a condition IS void (e.g. “To A so long as she never attempts to sell”) 3) Future Interest: The shifting/springingexecutory interest (3d party) [which is subject to the RAP!]
What is a life estate?
Life estate= an estate that is measured by the life of transferee; OR by some other life (pur autre vie) 1)Language used to create: “To A for life” (simple life estate) “To A for the life of B” (life estate pur autre vie) “To A for life, then to B” (B has indefeasibly vested remainder) “To A for life, but if…, to B” (B has contingent remainder) 2) Transferability (IF pur autre vie AND measuring life is still alive): Devisable (can pass by will) Descendible (will pass via statutes of intestacy if holder has no will) Alienable (capable of inter vivos transfer) 3) Future Interest: Reversion (if held by grantor) Remainder (if held by a 3d party)
What is a life tenant’s entitlements and restrictions?
The life tenant… 1) is entitled to all ORDINARY uses and PROFITS from the land 2) must NOT commit “waste” (i.e. something that hurts the future interest holder’s interest)
What are the 3 types of waste that a life tenant can commit? NOTE: NY Distinction
3 types of waste… 1) Voluntary or affirmative waste = overt conduct that causes a drop in value (i.e. willful distruction, consumption of natural resource on property) “PU-R-G-E” EXCEPTIONS… Prior Use, meaning that prior to grant, the land was used for exploitation; life tenant can CONTINUE to exploit (unless otherwise agreed) and subject to Open Mines Doctrine (if mining was done on land, the life tenant can mine from existing mines, BUT NOT new ones) Repairs, meaning the life tenant may consume natural resources for REPAIRS and MAINTANENCE Granted, meaning the life tenant may exploit if GRANTED that right Exploitation, meaning the land is suitable ONLY to exploit (e.g.a quarry) 2) Permissive waste or neglect = this occurs when the land falls into disrepair The life tenant must simply MAINTAIN the premises in reasonably good repair MUSTpay all ordinary TAXES and INTEREST on mtgs (NOT principal) NOTE: if the life tenant fails to pay taxes or interest, the gov’t/mtgee can FORECLOSE on the property, which will CUT OFF the interest to the remaindermen 3) Ameliorative waste = the life tenant must not engage in acts that ENHANCE the property value, UNLESS all future interest holders are KNOWN and CONSENT EXCEPTION: if changed conditions have rendered a piece of property UNIHABITABLE, we will allow a life tenant to tear down that structure and replace (Changed Condition Doctrine) Policy = protects the sentimental value for future interests NY DISTINCTION = In NY via statute, life tenant MAY make reasonable improvements UNLESS remaindermen object
What are the 8 types of future interests?
3 interests created in GRANTOR 1) Possibility of Reverter (ONLY accompanies the fee simple determinable) 2) Right of Entry/Power of Termination (ONLY accompanies the fee simple subject to a condition subsequent) 3) Reversion (ONLY accompanies the life estate) 5 interests created in a TRANSFEREE 4) IndefeasiblyVested Remainder(ONLY accompanies the life estate OR term of years) 5) Vested Remainder s/t Complete Defeasance(ONLY accompanies the life estate OR term of years) 6) Vested Remainder s/t Open(ONLY accompanies the life estate OR term of years) 7) Contingent Remainder (ONLY accompanies the life estateOR term of years) 8) Executory Interest (ONLY accompanies fee simple subject to executory limitation)
What is a remainder AND what are the 4 types?
Remainder = a future interest created in a grantee that is capable of becoming posessory on the natural expiration of the preceeding estate (i.e. it can NEVER cut short the preceeding estate) ONLY follows a life estate OR a term of years A remainderman is “patient and polite” TYPES: (i) contingent remainder; (ii) indefeasibly vested remainder; (iii) vested remainder s/t complete defeasance; AND (iv) vested remainder s/t open
What is acontingent remainder? NOTE: NY Distinction
Contingent remainder = a remainder that is created in (i)an UNACERTAINED/UNBORN person;(ii) is subject to a CONDITION PRECEDENT; (iii) or BOTH Unacertained/unborn e.g. =”To A for life, then to B’s first child (TBD)” Condition precedent e.g. = “To A for life, then, IF B graduates from college, to B” If B graduates college while A is alive, then B’s contingent remainder BECOMES an indefeasibly vested remainder If the contigency never occurs, the original GRANTOR has a reversion NOTE: contingent remaiders are OPEN TO the Rule Against Perpetuties NY DISTINCTION: NY has abolished the distinction b/t an EXECUTORY INTEREST and a CONTINGENT REMAINDER. Instead BOTH are called remainders s/t a condition precedent
What is the Rule of Destructability of Contingent Remainders? NOTE: NY Distinction
TheRule of Destructability of Contingent Remainders… HISTORICALLY at common law: a contingent remainder was DESTROYED if it was still contingent at the time the preceeding estate ended TODAY: the Rule has been abolished; if still contingent at end of preceding estate, then grantor (or his heirs) hold the estate subject to a springing executory interest NY DISTINCTION: the Rule has been ABOLISHED in NY
What is the Rule in Shelley’s Case? NOTE: NY Distinction
TheRule in Shelley’s case… Applies ONLY to this type of contingent remainder: “To A for life, then, on A’s death, to A’s heirs” A is alive. HISTORICALLY at common law: the present and future interests would MERGE giving a fee simple absolute (in order to promote alienability) This rule was applied EVEN IF it went against the grantor’s intent TODAY: the Rule has been abolished; A would have a life estate and A’s heirs would have a contingent remainder NY DISTINCTION: the Rule has been ABOLISHED in NY
What is the Doctrine of Worthier Title? NOTE: NY Distinction
TheDoctrine of Worthier Title… Applies when: the GRANTOR tries to create a future interest in his OWN heirs “To A for life, then to O’s heirs” This is a contingent remainder b/c O is still alive (AND HAS NO HEIRS) The Doctrine would make the contingent remainder in GRANTOR’s heirs VOID (i.e. A would have a life estate and O would have a reversion) BUT, grantor’s intent CNTRLS (i.e. if he INTENDED-with a clear stmt-to create a contingent remainder in his heirs, then it shall exist) NY DISTINCTION: the Doctrine has been ABOLISHED in NY
What is a indefeasibly vested remainder?
The holder of this remainder is CERTAIN to acquire an estate in the future, NO STRINGS ATTACHED Language used to create “To A for life, remainder to B” A is alive. B is alive A has a life estate B has a indefeasibly vested remainder Grantor has a reversion NOTE: If remainder predeceases the life tenant, the future interest passes by will or intestacy
What is a vested remainder s/t complete defeasance? NOTE: NY Distinction
The remainderman exists and is NOT s/t a condition precedent, BUT his posession could be cut short by a CONDITION SUBSEQUENT Language used to create Comma rule= if conditional language appears AFTER language that would (by itself) created a vested remander, it’s a CONDITION SUBSEQUENT; if language appears BEFORE then it’s a CONDITION PRECEDENT “To A for life, remainder to B, PROVIDED, HOWEVER, that if B dies under the age of 25, to C” A is alive. B is 20 A has a life estate B has a vested remainder s/t complete defeasance (and will take upon A’s death) C has a shifting executory interest Grantor has a reversion NY DISTINCTION: in NY it’s known as remainder vested s/t complete defeasance
What is a vested remainder s/t open?
A remaider is vested in a GROUP of takers, at least ONE OF WHOM is qualified to take, BUT each class member’s share is subject to partial diminution b/c ADDITIONAL takers can still join the group Language to create “To A for life, then to B’s children [OPEN].” A is alive. B has two children, C & D Open class vs. closed class 1) Open = others can still join the group 2) Closed = no other can join the group Determined by rule of convenience, which happens WHENEVER any class member can demand posession (i.e A’s death) EXCEPTION: under the womb rule, a child of B in the womb @ time of A’s death can share w/ C & D NOTE: vested remaiders s/t open are OPEN TO the Rule Against Perpetuties
What is anexecutory interest? NOTE: NY Distinction
It’s a future interest created in a transferee (third party), which is NOT a remainder and which takes effect by either CUTTING SHORT (i) some interest in ANOTHER person (“shifting”); OR (ii) in the GRANTOR (springing) 1) Shifiting executory interest Always follows a defeasible fee ANDcuts short someone OTHER than grantor “To A and her heirs, but if B returns from Canada, to B and his heirs” A has a fee simple s/t shifting executory interest B has a shifting executory interest 2) Springing executory interest Always follows a defeasible fee AND cuts short the GRANTOR “To A, if and when he marries” A has a springing executory interest O has afee simple s/t executory interest NOTE: an executory interests areOPEN TO the Rule Against Perpetuties NY DISTINCTION: NY has abolished the distinction b/t an EXECUTORY INTEREST and a CONTINGENT REMAINDER. Instead BOTH are called remainders s/t a condition precedent
What is the Rule Against Perpetutities (RAP)?
RAP = Certain kinds of FUTURE INTERESTS are VOID if there is ANY POSSIBILITY (no matter how remote) that the given interest may vest more than 21 YEARS after the death of a measuring life
What are the 4 steps to assessing anyRule Against Perpetutities (RAP) issue?
Step 1: determine which future interest have been created by the conveyance RAP ONLY applies to: (i) contingent remainders; (ii) certainvested remainders s/t open; AND (iii) executory interests E.g. “To A for life, then to A’s children” A is alive and has NO children (A’s children have a contingent remainder) RAP DOES NOT apply to: (i) any future interest in GRANTOR; (ii) indefeasibly vested remainders; OR vested remainders s/t complete defeasance Step 2: identify the conditions precedent to the vesting of the suspect future interest (i.e. what must happen in order for the future interest can take posession) From previous e.g., A must die leaving a children in order for it to take posession Step 3: find a measuring life (i.e. a person that is ALIVE at the date of the conveyance whose life/death is RELEVANT to the condition occurance) From previous e.g., A qualifies as the measuring life Step 4: Ask: will we know, with CERTAINTY, within 21 yrs of the death of our measuring life (A) if our future interest holder(s) CAN or CANNOT take? Yes? the future interest is VALID The previous e.g. is valid b/c we’d know at A’s death whethor or not he’d have children No? the future interest is VOID Must apply Fertile Octogenarian Rule (you can have a child whenever) and the MOST remote scenarios (i.e parade of horribles)
What are the 3bright line rules re: common law Rule Against Perpetuties (RAP)?
1) A gift to an OPEN CLASS that is conditioned on the members surviving to an age BEYOND 21 violates the common law RAP “Bad as to one, bad as to all” – to be valid, it must be shown that the condition precedent to EVERY class member’s taking will OCCUR w/in the 21 yr pd E.g. “To A for life, then to such of A’s children as to live to atain the age of 30.” A has two children, B and C who are 35 and 40. A is alive»_space; future interest is VOID (A may have a child a day before he dies) and BECOMES a reversion in O 2) An executory interest with NO TIME LIMIT for vesting violates the common law RAP E.g. “To A and his heirs so long as the land is used for farm purposes, and if the land ceases to be so used to B and his heirs”»_space; executory interest violates RAP (as we don’t know at A’s death whether the condition will be met) and BECOMES a fee simple determinable (with possiblity of reverter) 3) A GIFT from one charity to another WILL NOT violate the RAP E.g. “To the American Red Cross, so long as the premises are used for Red Cross purposes, and if they ceased to be so used, then to the YMCA” (normally NOT ok under RAP)
What are the 3reforms to the Rules of Perpetuity (RAP)? NOTE: NY Distinction
1) “Wait and see” or “second look” doctrine: wait until end of measuring life to adjudicate future interest (no more parade of horribles). 2) The Uniform Statutory Rule Against Perpetuities: provides alternative 90 YEAR vesting period 3) Cy pres doctrine: “as near as possible”; a ct. may reform in such a way that most closely maintains grantor’s intent WHILE comporting with the RAP (i.e. reducing any offensive age contingency to 21 yrs) NY DISTINCTION: the NY reform statute applies the common law RAP and REJECTS the wait and see approach and cy pres (judicial) doctrineEXCEPT for charitable trusts AND pwrs of appointment If an interest is invalid b/c condition requires age > 21 yrs, a ct WILL reduce age to 21 The common law Fertile Octogenarian principle is modifed providing that women OVER AGE of 55 are presumed to not have any more children The NY “suspension” rule (Trusts and Wills) applies the common law RAP on restrictions of pwr to sell or trnfr
What are the 2 steps in the conveyance of real estate?
1) The land K, which endures UNITILL… 2) The closing, where the DEED becomes the operative document
How is risk of loss apportioned in land sales? NOTE: NY Distinction
The std is Equitable Conversion = once the K is signed, the buyer is the owner of he land (s/t the condition to pay purchase price at closing) At sigining, the risk of loss (i.e. destruction without FAULT) is on the BUYER (i.e. has to pay FULL K price), UNLESS the K states otherwise NY DISTINCTION: in NY so long as the buyer is w/out fault, the ROL remains with the SELLER until the buyer takes possession
What are the requirements of the land K?
1) The land K must be in WRITING, signed by the would-be ∆ (p/t SOF) SOF EXCEPTION: the “doctrine of part performance”; if you have TWO of the following THREE elements, DON’T need a writing… Buyer takes possession; Buyer pays ALL or PART of the price; Buyer makes subtl improvements 2) It must describe blackacre and state some consideration? When the amt of land receited in the K is MORE than the actual size of the parcel, the REMEDY is specific performance w/ a pro rata reduction in price
What are 2 implied promises in everyland K?
1) Seller promises to provide MARKETABLE title at the closing The std = the title is free from reasonable doubt (i.e. free from litigation or the threat of litigation) UNMARKETABLE TITLE = Title acq’d by adverse possession (even if just PART of title) BUT, if the seller brings a succesful c/a action to quiet title and is successful, then CAN sell Encumberances (no servitudes or mtgs UNLESS waived by buyer) [NOTE: seller has a right satisfy existing mtg w/ sale proceeds] Zoning violations (BUT not when blackacre is subject to an adverse zoning req) 2) Seller promises not to make any false stmt of material fact Seller is liable for failure to disclose LATENT material defects Even if K states a general disclaimer of liability (e.g. “property sold as is”), it wont relieve seller from liability for FRAUD or FAILURE to disclose
Do land Ks contain implied warranties of fitness OR habitability?
At common law, NO! (caveat emptor) EXCEPTION: the implied warranty of fitness and workmanlike construction APPLIES to sale of a NEW home by a BUILDER vendor
What is the purpose of a deed?
At closing, the deed PASSES legal title from the seller to the buyer
What are the 4 requirements for a deed to pass legal title?
“L-E-A-D” = Lawfully Executed And Delivered 1) Lawful execution of the deed 2) Delivery of the deed
What is the std for the lawful execution of a deed?
The std = the deed must be (1) in WRITING (signed by the grantor); AND (2) have a DESCRIPTION of the land The land description doesn’t have to be perfect, just UNAMBIGUOUS YES: “All of O’s land” NO: “Some of O’s land” NOTE: need not recite consideration, NOR must consideration pass to make a deed valid
What is requirements for a deed to be properly “delivered”?
“Delivery” is accomplished… 1) When grantor PHYSICALLY transfers deed to the grantee (via the mail, agent OR messenger); 2) When the deed has been LEGALLY transfered (governed by grantor’s present INTENT); OR 3) When delivered by ESCROW (via an escrow agent once conditions are met); BUT 4) NOT when the grantee expressly REJECTS the deed NOTE: if deed (absolute on its face) is transferred to grantee with an oral condition, the oral condition DROPS OUT (it’s not provable), BUT delivery is accomplished