Real Property Flashcards
3 interests in land:
(1) Estate
(2) Easement
(3) Restrictive covenant
Generally speaking, apply the common law rule UNLESS there has been a ___________ in the common law rule.
Majority change
Strategy for Real Property questions is:
(1) Identify & describe the three interests in land
(2) How can these interests be acquired, retained, or transferred?
Key word for estates:
Present possessory
Present possessory estates:
Freehold & Non-Freehold
Estates for future rights of possession are called:
Future interest
The Non-Freehold Estates are:
The Landlord-Tenant Estates
Identify the Freehold Estates:
Fee Simple - including the defeasible fees
Life Estate
Fee Tail
Duration of Fee Simple Absolute (FSA)
Potentially infinite duration - potentially lasts forever
FSA must be fully Alienable: No ___________ restraints on transfer of ownership of FSA.
Direct
John wills the farm in upstate New York to Yoko, but provides that if Yoko tries to sell the farm, it goes to Shaun.
Who gets what?
Yoko: FSA
Shaun: Nothing (ignore the restriction because no direct restraints allowed on FSA)
General rule: Any attempt to put a direct restraint on alienation is VOID - which means you
Ignore the restriction!
John wills the farm in upstate New York to Yoko, but provides that if Yoko allows Paul onto the property, then the farm goes to Shaun. Is this ok?
Yes because it is language of condition. Conditions may be imposed on the exercise of a fee simple but any attempt to limit the right to transfer is void.
John wills the farm to Yoko, but provides that if Yoko tries to sell the farm during her lifetime, then Shaun has a right of first refusal; that is, Shaun has the option to buy the land before Yoko can sell the land to anyone else. Is this restriction on alienation ok?
Yes. Modern exception upholds validity of rights of first refusal.
Language required at common law to create FSA: “To A and her heirs.” If the language was to “A,” then at common law A took:
Only life estate
Today, there has been a majority change in common law rule: Courts will presume a fee simple was granted - UNLESS language shows ____________ to do otherwise.
A clear intent
John wills the farm to Yoko. What estate does Yoko receive?
Yoko gets FSA (majority change in common law rule)
What is a Fee Tail?
At common law, the Fee Tail was a device to lock the property into the Grantee’s family.
At common law, a Fee Tail was created by using the following very precise language:
(1) “To A and the heirs of his (or her) body”; OR
(2) “To A and his (or her) bodily heirs.”
Modern presumption: Language of Fee Tail will be presumed to create a ___________ unless the Bar Exam question asks you to apply the common law rule.
FSA
Life Estate may be granted _________ or may arise ____________.
Expressly; by implication
Key Rule: Life Estate is ____________ by time - only measured by __________.
Never measured; life
Fixed time ≠ life estate
Some years ago, a large house in Nashville, Tennessee, was conveyed from Garth to Elvis. The language was “to Elvis for 200 years if he lives that long.”
Does Elvis have a life estate?
No
Some years ago, a large house in Nashville, Tennessee, was conveyed from Garth to Elvis. The language was “to Elvis for life.”
Does Elvis have a life estate? If so, who’s life is the measuring life?
Yes. Elvis takes a life estate created by EXPRESS GRANT.
The Grantee’s life is the measuring life.
In his will, Lyndon leaves the ranch “to Luci and Lynda after the death of my beloved wife Lady Bird.”
What is Lady Bird’s estate?
Lady Bird has an implied life estate.
Her life estate is created by necessary implication from the terms of the testator’s will.
O conveys Blackacre “to Tarzan for the life of Jane.”
What interest does Tarzan have?
Tarzan has a life estate measured by Jane’s life.
O conveys Blackacre “to Tarzan for the life of Jane.”
At common law, what happens to Tarzan’s estate if Tarzan dies but Jane (the measuring life) is still alive?
Seisin is vacant - to anybody takes.
O conveys Blackacre “to Tarzan for the life of Jane.”
Under the modern rule, what happens to Tarzan’s estate if Tarzan dies but Jane (the measuring life) is still alive?
Tarzan’s life estate interest passes to his estate. Tarzan’s life estate will continue in place until Jane - the measuring life - dies.
O conveys Blackacre “to Tarzan for the life of Jane.”
What happens to Tarzan’s life estate if Jane dies first, leaving Tarzan still alive?
Tarzan’s life estate terminates. HIs life estate was measured by Jane’s life - NOT his life.
O conveys Blackacre “to Tarzan, and on Tarzan’s death, to Jane.”
What interest does Tarzan have?
Tarzan gets a life estate.
Some years ago, Garth conveyed his large mansion in Nashville, Tennessee “to Reba for life.” Later Reba sold her life estate to her agent, Al. What happens to the mansion if Al should die before Reba dies?
(a) Reba holds a life estate and Reba’s (the grantee’s) life is the __________ life.
(b) So Al holds a ___________ measured by ___________ life.
(c) If Al dies before Reba, the modern rule says that the life estate passes to _________ estate and continues until ___________ dies.
(a) Measuring
(b) Life estate; Reba’s life
(c) Al’s; Reba
Bill conveys Whiteacre to Paula for life, then to Monica, but provides that if Paula tries to sell her life estate, than her life estate terminates and the property goes to Monica in fee simple.
Is this forfeiture valid?
Yes.
The MODERN rule allows a provision that terminates the life estate IF the life tenant attempts to convey away the life estate.
The Law of Waste
General Rule: Life tenant _________ the estate.
Maintains
Voluntary waste is any ____________ action beyond the right of ___________ that causes _________ to the premises.
Affirmative; maintenance; harm
MAINTAIN means life tenant may continue the _________ of the land.
Normal use
General Rule: Depletion of natural resources constitutes waste UNLESS consumption of such resources constitutes the normal use of the land, as in the case of a life estate in a coal mine or a granite quarry.
Open Mines Doctrine
The sale of harvestable crops ________ involve waste.
Does not
General Rule for Repairs: Life tenant has obligation to make ordinary repairs but NOT ____________.
Replacement
The Life Tenant’s REPAIR obligation is ___________ to the maount of rents an profits received from the land.
Limited
However, if there are NO rents and profits, then the repair obligation is limited to reasonable rental value of land IF the life tenant is __________ the land.
Using
If Life Tenant is receiving NO income from the property and is not otherwise using the property, then Life Tenant has _______ repair obligation.
No
General Rule for Taxes
The tenant MUST pay ALL taxes on the property.
Extent of obligation to pay taxes:
The obligation extends ONLY to amount of rents & profits received from land; OR if there are NO rents & profits received, then it is limited to the reasonable rental value of the land IF the life tenant is using the land.
What happens if the life tenant FAILS to pay TAXES on the property?
The holder of the future interest must be sure that taxes are paid because a tax sale will eliminate the future interest. The buyer at the tax sale takes the property free and clear of the future interest.
Mortgage Debt General Rule: Life Tenant must pay ________ on any mortgage indebtedness on the property but is NOT required to make any __________ payments. The holder of the future interest generally must pay the principal.
Interest; principal
Limitations on interest obligation of mortgage debt:
Interest obligation is limited to the amount of rents and profits received; however, IF there are NO rents and profits, then the obligation is limited to reasonable rental value of the land IF the life tenant is using the land.
Life tenant does NOT have to insure the property. However, life tenant does have an ________________.
Insurable interest
Ameliorative Waste occurs when the life tenant alters the property substantially but the life tenant’s activity ________ the value of the land.
Increases
An old residential mansion is now surrounded by heavy industry. The life tenant wants to tear down the mansion, thus making the underlying land much more valuable for other uses. The holder of the future interest objects. Can the life tenant tear down the mansion?
General Rule: If changed conditions have made the property relatively worthless, then the life tenant can alter the property without incurring liability to the holder of the future interest.
All freehold estates carry with them the concept of __________.
Seisin
What is seisin?
Today, this means that the holder of seisin is the taxpayer.
At the moment that each and every conveyance of Blackacre takes effect, property law wants to know how has seisin at _____ times and under ________ possible circumstances.
All; all
General Rule Future Interest: The INTEREST exists now BUT ___________ will NOT take place - IF it takes place at all - UNTIL some time in the FUTURE.
Possession
The future interest exists now - when it is created - but will not become _____________ until some time later.
Possessory
Future interests retained by GRANTOR:
(1) Reversion
(2) Possibility of reverter
(3) Right of entry
Future interests given to GRANTEE:
(1) Remainder
(2) Executory interest
O conveys Blackacre to A for life.
What does A get?
What does O get?
A: Life estate
O: Reversion in fee simple
General Rule: A Reversion in the Grantor arises whenever the Grantor conveys away ______ than the _______ durational estate that the Grantor had.
Less; full
O coneys Blackacre to A for life. Later A conveys Blackacre to B for life.
What does A get?
What does B get?
What does O get?
A: Life estate
B: Life estate measured by B’s life and by A’s life.
O: Reversion
O coneys Blackacre to A for life. Later A conveys Blackacre to B for life.
What happens to Blackacre if B dies before A does?
When B dies, B’s interest terminates.
O coneys Blackacre to A for life. Later A conveys Blackacre to B for life.
Where will the property go when B dies?
Back to A - arises automatically in favor of grantor
O coneys Blackacre to A for life. Later A conveys Blackacre to B for life.
What interest did A keep when A conveyed a life estate to B?
A kept reversion for life.
O coneys Blackacre to A for life. Later A conveys Blackacre to B for life.
What happens to Blackacre if A dies before B does?
When A dies, B’s interest terminates because A could convey only if a life estate measured by A’s life.
O coneys Blackacre to A for life. Later A conveys Blackacre to B for life.
When A dies, where will the property go?
When A dies, Blackacre goes back to O by way of reversion.
O coneys Blackacre to A for life. Later A conveys Blackacre to B for life.
What result if A is 86 years old at the time A conveys Blackacre to B for life and B is 20 years old?
A: Reversion for life
B: Life estate measured by B’s life and A’s life
O: Reversion in fee simple
O conveys Blackacre to A for life and A is 86 years old at the time of this conveyance. Later, A leases Blackacre to B for 50 years.
What interest does A have in Blackacre?
B?
O?
A: Reversion for life
B: Non-freehold estate
O: Reversion
O conveys Blackacre to A for life and A is 86 years old at the time of this conveyance. Later, A leases Blackacre to B for 50 years. Ten years after A gives B the 50 year lease, A dies.
What interest does A have in Blackacre?
B?
O?
A: Nothing
B: Nothing
O: Revert to O
O conveys Blackacre to A and his heirs for so long as no liquor is consumed on the premises.
What estate does A receive?
Fee Simple Determinable
When does the Fee Simple Determinable (FSD) estate terminate?
The FSD will determine (or end) AUTOMATICALLY on the occurrence of some event.
General Rule: Whenever the Grantor conveys a FSD, the Grantor automatically retains what?
Possibility of Reverter
A Possibility of Reverter goes ONLY with the grant of what?
Fee Simple Determinable
What are the magic words to identify the Fee Simple Determinable (FSD)?
(1) So long as
(2) While
(3) During
(4) Until
O conveys Blackacre to A and her heirs, provided, however, that if liquor is ever consumed on the premises then O or O’s heirs shall have the right to re-enter and retake the premises.
What estate does A receive?
Fee Simple on Condition Subsequent
When does the Fee Simple on Condition Subsequent (FSCS) terminate?
(1) Title does NOT go back to the Grantor automatically when the condition is broken.
(2) Instead O must do something to retake property.
(3) Title stays in the Grantee A until the Grantor O exercises his Right of Entry.
Whenever Grantor conveys a Fee Simple on Condition Subsequent, Grantor keeps what?
Right of Entry
Magic words to identify the FSCS:
(1) Provided however
(2) But if
(3) On condition that
To create an FSCS, the magic words MUST be followed by language where the Grantor expressly ___________ the right to re-enter and retake the property.
Reserved
O conveys Blackacre to Loyola Marymount University for the purpose of building a gymnasium. If Loyola Marymount University later builds a school theater on Blackacre, will Loyola Marymount lose title to Blackacre?
No
Remember: All future interests in Grantor are ____________.
Vested
Reversion: Subject to Rule Against Perpetuities?
No
Reversion: Freely transferable on death?
Yes
Reversion: Freely transferable inter vivos?
Yes
Possibility of Reverter: Subject to Rule Against Perpetuities?
No
Possibility of Reverter: Freely transferable on death?
Yes
Possibility of Reverter: Freely transferable inter vivos?
Yes
Right of Entry: Subject to Rule Against Perpetuities?
No
Right of Entry: Freely transferable on death?
Yes
Right of Entry: Freely transferable inter vivos?
No
FLORIDA LAW: The Right of Entry CAN be transferred inter vivos!! (Opposite of MBE)
O conveys Blackacre to A for life; and then on A’s death to B and heirs.
What estate does A receive?
B?
O?
A: Life Estate
B: Fee Simple Absolute
O: Nothing
How do you spot a Remainder?
A remainder is a future interest in a third party Grantee that comes naturally and immediately on the termination of the preceding estate.
General Rule: Remainders are EITHER __________ or _____________.
Vested; contingent
General Rule: A Remainder is _____________ if nothing stands int he way of its becoming possessory on the natural expiration of the preceding estate.
Vested
O conveys Blackacre to A for life, then to B and his heirs if B survives A.
What estate does A receive?
B?
A: Life estate
B: Contingent remainder in fee simple
O conveys Blackacre to A for life, then to B and his heirs if B survives A.
Why does B take a contingent remainder?
Because there is a condition (i.e. a survivorship clause) that B must satisfy BEFORE his interest in Blackacre will become possessory.
O conveys Blackacre to A for life, then to B and his heirs if B survives A.
What happens to the property if B dies before A?
The law assumes that the contingency plan is for the property to go to O by way of reversion.
O conveys Blackacre to A for life, then to B and his heirs when B reaches age 21. At the time of this conveyance, B is 15 years old.
What estate does A receive?
B?
A: Life estate
B: Contingent remainder in fee simple
O conveys Blackacre to A for life, then to B and his heirs when B reaches age 21. At the time of this conveyance, B is 15 years old.
Why does B take a contingent remainder?
There is an age contingency to be satisfied before B’s interest becomes possessory.
O conveys Blackacre to A for life, then to B and his heirs when B reaches age 21. At the time of this conveyance, B is 15 years old.
Why does O keep a reversion?
Just in case B is not 21 when A dies.
O conveys Blackacre to A for life, then to B and his heirs when B reaches age 21. At the time of this conveyance, B is 15 years old.
What happens to B’s interest when B celebrates his 21st birthday and A is still alive?
B’s interest is now a vested remainder because B satisfied the age contingency.
O conveys Blackacre to A for life, then to B and his heirs when B reaches age 21. At the time of this conveyance, B is 15 years old.
At the time of A’s death, B is 18 years old. What happens to Blackacre when A dies?
Under the modern majority rule, Blackacre goes back to O by way of reversion, who will hold the property in fee simple subject to an executory interest and B holds the springing executory interest.
O conveys Blackacre to A for life, then to A’s children. AT the time O makes his grant, A has 3 children, B, C, and D.
What estate does A receive?
B, C, and D?
O?
A: Life estate
B, C, and D: Vested remainder subject to open
O: Nothing
O conveys Blackacre to A for life, then to A’s children. AT the time O makes his grant, A has 3 children, B, C, and D.
Why is this conveyance of a Vested Remainder further qualified as “Subject to Open”?
This vested remainder is subject to pen to allow for the birth of future siblings.
Sometimes called a vested remainder subject to partial divestment.
O conveys Blackacre to A for life, then to B and C, the children of A. Is this a class gift?
No, because not unnamed.
Testator’s will devises Blackacre “to A’s children.” At the time the will is executed, A has 2 children, B and C. After the will is executed and before the Testator dies, A has another child, D, and one of the other children, B dies. Then the Testator dies. Finally, two years after Testator’s death, A has another child, E.
The gift “to A’s children” is a what?
Class gift
General Rule: Under a rule of convenience, the class __________ for a class gift whenever any class member is entitled to a distribution. The rule of convenience is a rule of construction, not a rule of law.
Closes
Testator’s will devises Blackacre “to A’s children.” At the time the will is executed, A has 2 children, B and C. After the will is executed and before the Testator dies, A has another child, D, and one of the other children, B dies. Then the Testator dies. Finally, two years after Testator’s death, A has another child, E.
Who will share in this class gift?
B?
C?
E?
B: No - because the general rule is: Members of a class who predecease the testator are eliminated. Their gift lapses (unless the anti-lapse statute applies)
C: Yes
D: Yes - because the general rule is: Once the class is established, when the will is executed, the class remains open - to accommodate those who come later and satisfy the class definition.
E: No - because, under the Rule of Convenience the class closes when the testator dies.
Under the Rule of Convenience, later born children ____________ unless they were in gestation at time of testator’s death.
Lose out
O conveys Blackacre to A for life, then to A’s children. At the time this conveyance is made, A has no children.
What estate does A receive?
A’s Children?
O?
A: Life Estate
A’s Children: Contingent Remainder
O: Reversion - just in case A dies never having children.
General Rule: If the Grantee is not in existence (i.e., is not ascertainable) at the time the conveyance takes effect, then the remainder is _________________ on the Grantee being born and therefore ascertainable.
??
O conveys Blackacre to Harry for life, then to Harry’s widow. At the time this conveyance is made, Harry is married to Sally.
What estate does Harry receive?
Harry’s Widow?
Harry: Life Estate
Harry’s Widow: Contingent Remainder
O conveys Blackacre to Harry for life, then to Harry’s widow. At the time this conveyance is made, Harry is married to Sally.
Harry’s widow’s interest is contingent because the exact identity of the taker is not ascertainable until Harry dies, at which time we can identify the person who is ____________.
Harry’s Widow
O conveys Blackacre to Harry for life, then to Harry’s widow. At the time this conveyance is made, Harry is married to Sally.
What interest does Sally take at the moment the conveyance is made?
Sally gets nothing.
O conveys Blackacre to Harry for life, then to Harry’s widow. At the time this conveyance is made, Harry is married to Sally.
What interest does O get?
O keeps a reversion because the property will go back to O IF Harry should be unmarried at the time of his death, leaving behind no widow.
Rule: Remainders (whether vested or contingent) will become possessory, if at all, ONLY upon the natural expiration of ______________________.
The estate that comes before them
So remainders NEVER/ALWAYS affect the estate that comes before them.
Always
An executory interest operates to ____________ the estate that comes before it.
Cut short
O conveys Blackacre to A so long as the property is used for residential purposes and if the property is ever used for other than residential purposes, then to B and heirs.
What estate does A receive?
B?
A: Fee simple subject to executory interest
B: Executory interest
O conveys Blackacre to A so long as the property is used for residential purposes and if the property is ever used for other than residential purposes, then to B and heirs.
Rule: B’s interest is NOT a remainder because?
Remainders NEVER, EVER follow a fee simple.
If a future interest in a Grantee is NOT a Remainder, then it must be:
An executory interest
O conveys Blackacre to A for life, then to B and his heirs; but if at B’s death B is not survived by issue, then to C and her heirs.
What estate does A receive?
B?
C?
A: Life Estate
B: Vested remainder in fee simple subject to an executory interest
C: Executory interest
O conveys Blackacre to A for life, then to B and his heirs; but if at B’s death B is not survived by issue, then to C and her heirs.
Why does C take an Executory Interest?
The language of condition is made part of the grant over to C.
O conveys Blackacre to A for life, then to B and his heirs; but if at B’s death B is not survived by issue, then to C and her heirs.
What is another name for the interest (vested remainder in fee simple subject to an executory interest) that B takes?
A Vested Remainder Subject to an Executory Interest is sometimes called a Vested Remainder Subject to Total Divestment –OR– a Vested Remainder Subject to an Executory Interest
O conveys Blackacre to Ross for life, then to Phoebe; but if coffee is ever consumed on the property during Phoebe’s lifetime, then the property should go to Rachel.
Label the interests created by this conveyance:
Ross:
Phoebe:
Rachel:
Ross: Life Estate
Phoebe: Vested Remainder in Fee Simple Subject to Total Divestment –OR– Vested Remainder in Fee Simple Subject to Executory Interest
Rachel: Executory Interest
O conveys Blackacre to Ross for life, then to Phoebe; but if coffee is ever consumed on the property during Phoebe’s lifetime, then the property should go to Rachel.
If Ross cuts down all thes hade tress on Blackacre, can Rachel sue for waste?
No, because holders of Executory Interest do NOT have standing to sue for waste.
O conveys Blackacre to Ross for life, then to Phoebe; but if coffee is ever consumed on the property during Phoebe’s lifetime, then the property should go to Rachel.
If Ross cuts down all the shade tress on Blackacre, can Phoebe sue for waste?
Yes, because Phoebe - the holder of the remainder - has standing to sue for waste.
What are the defeasible fees?
(1) Fee Simple Determinable
(2) Fee Simple Subject to Condition Subsequent
(3) Fee Simple Subject to Executory Interest
The Rule Against Perpetuities
No interest is good unless it must vest, if at all, not later than 21 years after the death of some life in being at the creation of the interest.
Stated differently: No interest will be valid unless it must vest - if it is going to vest at all - within 21 years after the death of some life in being who was alive at the moment the conveyance was made.
What public policy is promoted by the Rule Against Perpetuities?
To promote free transferability of land by preventing remote vesting (don’t know where the property is going in the future - uncertainty)
O conveys Blackacre to A and his heirs so long as no liquor is consumed on the premises; and if liquor is ever consumed on the premises, title shall go to B and her heirs.
What are the intended grants?
A:
B:
O:
A: Fee Simple Subject to Executory Interest
B: Executory Interest in Fee Simple
O: Nothing, because O intended to convey away his entire interest in Blackacre
O conveys Blackacre to A and his heirs so long as no liquor is consumed on the premises; and if liquor is ever consumed on the premises, title shall go to B and her heirs.
Does the Rule Against Perpetuities Apply?
Yes
The Rule Against Perpetuities ALWAYS applies to Executory Interests AND Contingent Remainders AND Vested Remainders Subject to Open
O conveys Blackacre to A and his heirs so long as no liquor is consumed on the premises; and if liquor is ever consumed on the premises, title shall go to B and her heirs.
What happens to B’s future interest under the Rule Against Perpetuities?
It is VOIDED because it violates the rule.
The executory interest is VOID because it is entirely possible that many generations will pass before liquor is consumed on the property - which may occur at a time that is outside lives in being plus 21 years.
What happens if a future interest is rendered VOID under the Rule Against Perpetuities?
Cross out language of conveyance that violates the Rule.
O conveys Blackacre to A and his heirs so long as no liquor is consumed on the premises; and if liquor is ever consumed on the premises, title shall go to B and her heirs.
What interests are left AFTER application of the Rule Against Perpetuities?
A:
B:
O:
A: Fee Simple Determinable
B: NOTHING
O: Possibility of Reverter - vested and therefore not subject to RAP (Whenever liquor is consumed on the property, Blackacre will revert to O)
O conveys Blackacre to A and his heirs so long as no liquor is consumed on the premises; and if liquor is ever consumed on the premises, title shall go to B and her heirs.
Assume that 5 years after the conveyance of Blackacre to A, liquor is consumed on the premises. Is B’s interest valid under the Rule Against Perpetuities?
A:
B:
O:
No
A: Fee Simple Determinable
B: NOTHING
O: Possibility of Reverter
General Rule: Validity of an interest under the Rule Against Perpetuities is determined at _________________ - at the time the interest is created. We do NOT wait and see what actually happens.
The time the conveyance is made
Rule: If transfer is made by WILL - apply the Rule Against Perpetuities as of time of _______________ - when the will takes effect.
Testator’s death
Rule: If transfer is made by DEED - apply the terms of the Rule Against Perpetuities as of the time __________________.
The deed takes effect
Uniform Statutory Rule Against Perpetuities
Today, many states have adopted this reform of the common law Rule Against Perpetuities, which essentially codifies the common law Rule, and in addition provides for an alternative 90 year vesting period. Thus, the Uniform Rule adopts a “wait and see” approach to determine whether vesting actually occurs within 90 years.
Florida Law: Florida has enacted the Uniform Statutory Rule Against Perpetuities - and has adopted a ________ year alternate vesting period.
90
O conveys Blackacre to A and his heirs for so long as no liquor is consumed on the premises; and if liquor is consumed on the premises during the lifetime of A or B or within 21 years after the death of the survivor of A or B, then in that event title shall pass to B and his heirs.
What are the intended grants?
A:
B:
A: Fee Simple Subject to Executory Interest
B: Executory Interest
O conveys Blackacre to A and his heirs for so long as no liquor is consumed on the premises; and if liquor is consumed on the premises during the lifetime of A or B or within 21 years after the death of the survivor of A or B, then in that event title shall pass to B and his heirs.
B’s Executory Interest is valid because the language of this conveyance included a __________________.
Perpetuities Savings Clause (during the lifetime of A or B or within 21 years)
Why include a Perpetuities Savings Clause?
This language is included in order to save a grant from violating the Rule Against Perpetuities by making sure that vesting must occur within the time period of the Rule.
O conveys Blackacre to A and his heirs for so long as no liquor is consumed on the premises; and if liquor is consumed on the premises during the lifetime of A or B or within 21 years after the death of the survivor of A or B, then in that event title shall pass to B and his heirs.
What future interest does O (the Grantor) have at the moment the conveyance is made? (What will happen to Blackacre IF liquor is consumed on the property AFTER the time for vesting in B has EXPIRED?)
(1) In order for B’s future interest to become possessory, liquor must be consumed during A’s or B’s lifetime or within 21 years after the death of whichever of them lives the longest because that is the time frame set up by this Perpetuities Savings Clause.
(2) Therefore if the condition is not violated before B’s interest expires by its own terms; A holds the property as a Fee Simple Determinable and O has a Possibility of Reverter.
O conveys Blackacre to A and his heirs for so long as no liquor is consumed on the premises; and if liquor is consumed on the premises during the lifetime of A or B or within 21 years after the death of the survivor of A or B, then in that event title shall pass to B and his heirs.
Why does O keep a Possibility of Reverter?
Because once B’s executory interest is extinguished by its own terms, all that’s left is an FSD in A and O automatically keeps a possibility of a reverter.
O conveys Blackacre to A and her heirs; provided, however, that if the premises shall ever cease to be used for residential purposes, then B has the right to re-enter and retake the premises.
What are the intended grants?
A:
B:
O:
A: Fee Simple Subject to Executory INterest
B: Executory Interest
O: Nothing
O conveys Blackacre to A and her heirs; provided, however, that if the premises shall ever cease to be used for residential purposes, then B has the right to re-enter and retake the premises.
What is the “TRICK” in the language of this conveyance?
(1) The language used in the conveyance looks like it is trying to create a Right of Entry int he grantee, B.
(2) But a Right of Entry can be created in favor of the grantor ONLY (not 3rd party B)
(3) So B, as the Grantee, has to take either a remainder or an executory interest. Don’t be fooled by the use of extraneous words in the language of grant.
O conveys Blackacre to A and her heirs; provided, however, that if the premises shall ever cease to be used for residential purposes, then B has the right to re-enter and retake the premises.
Does the Rule Against Perpetuities apply?
Yes
O conveys Blackacre to A and her heirs; provided, however, that if the premises shall ever cease to be used for residential purposes, then B has the right to re-enter and retake the premises.
Does this grant of an Executory Interest violate the Rule Against Perpetuities?
Yes
It is entirely possible that the property may be used for non-residential purposes outside the time period of the Rule.
O conveys Blackacre to A and her heirs; provided, however, that if the premises shall ever cease to be used for residential purposes, then B has the right to re-enter and retake the premises.
What interests are left AFTER application of the Rule Against Perpetuities?
A:
B:
O:
A: Fee Simple Absolute
B: Nothing, because B’s Executory Interest is VOID under the Rule Against Perpetuities and therefore we strike it out.
O: NOTHING
General Rule: Contingent interest in property, such as options and rights of first refusal, violate the Rule Against Perpetuities IF ___________________________.
They could possibly be exercised outside the time period of the Rule.
Bilbo conveys Blackacre to Frodo and his heirs; but if Frodo and his heirs ever try to sell the property, Gandalf and his heirs have a right of first refusal.
Does the Rule Against Perpetuities apply to the grant of a right of first refusal?
Yes
Bilbo conveys Blackacre to Frodo and his heirs; but if Frodo and his heirs ever try to sell the property, Gandalf and his heirs have a right of first refusal.
Does the grant of the right of first refusal violate the Rule Against Perpetuities?
Yes.
It is entirely possible that the condition could be violated –thereby triggering Gandalf’s right of first refusal–way outside the time frame of the Rule. Exercise of this right of first refusal does not have to occur within the lives of the named parties. Instead, exercise could occur anytime in the future.
Bilbo conveys Blackacre to Frodo and his heirs; but if Frodo and his heirs ever try to sell the property, Gandalf and his heirs have a right of first refusal.
What interests are left after application of the Rule Against Perpetuities?
Gandalf:
Frodo:
Gandalf: Nothing
Frodo: FSA
O conveys Blackacre to Saint Anne’s Catholic Church for so long as the premises are used for church purposes; and if they shall ever cease to be so used, to the American Red Cross.
What interest are created here?
Church:
Red Cross:
O:
Church: Fee Simple Subject to Executory Interest
Red Cross: Executory Interest
O: Nothing
O conveys Blackacre to Saint Anne’s Catholic Church for so long as the premises are used for church purposes; and if they shall ever cease to be so used, to the American Red Cross.
Is the Rule Against Perpetuities violated?
No, because the gift over is from one charity to another.
Without this Charity-to-Charity Exception, the gift over tot he Red Cross would violate the Rule because it is entirely possible that Blackacre may be used for non-church purposes way outside the time frame of the Rule.
For this exception to operate, BOTH transferees must be CHARITIES.
Testator dies with a will devising Blackacre to A for life, then to such of A’s children as reach age 30. A has no children at the time of Testator’s death.
What are the intended grants?
A:
A’s Children:
O:
A: Life Estate
A’s Children: Remainder that is Contingent in 2 respects: (1) the taker(s) still must be ascertained; and (2) the taker(s) must reach age 30
O: Reversion - just in case no child of A is born and reaches age 30 before A dies
Testator dies with a will devising Blackacre to A for life, then to such of A’s children as reach age 30. A has no children at the time of Testator’s death.
Does the Rule Against Perpetuities apply to void the gift over to the class of A’s children who reach 30?
Yes.
Testator dies with a will devising Blackacre to A for life, then to such of A’s children as reach age 30. A has no children at the time of Testator’s death.
What if the language of conveyance was “to such of A’s children as reach 21?”
Would it violate RAP?
Then the gift would be VALID, because it is clear - at the moment the conveyance is made - that a child will be born to A and will reach age 21, if at all, within 21 years (plus any period of gestation) of some life in being - that is, within 21 years of someone who was alive at the moment the conveyance is made. Here, we use A (the biological parent) as the measuring life.
Whenever the language used in the grant puts the age contingency beyond 21, the conveyance ___________________________.
Loses its link to a life in being.
O conveys Blackacre to Mary for life, then to such of Mary’s children as reach the age of 30. Mary is now 87, and she has 3 children, all in their 60s.
What are the attempted grants?
Mary:
Mary’s Children:
Mary: Life Estate
Mary’s Children: Vested Remainder Subject to Open - to allow for birth of future siblings who reach age 30.
O conveys Blackacre to Mary for life, then to such of Mary’s children as reach the age of 30. Mary is now 87, and she has 3 children, all in their 60s.
Does the Rule Against Perpetuities apply to void the gift over to those of Mary’s children who reach age 30?
Yes, because of the Fertile Octogenarian Rule - which conclusively presumes that Mary might have another child, regardless of her age or medical condition.
O conveys Blackacre to Mary for life, then to such of Mary’s children as reach the age of 30. Mary is now 87, and she has 3 children, all in their 60s.
Does the Rule Against Perpetuities apply to Mary’s existing children, those who have already reached age 30?
(1) They take NOTHING because this class gift VIOLATES the Rule Against Perpetuities.
(2) General Rule: If the Rule Against Perpetuities operates to VOID the gift over to ANY member of the class because their interest might vest outside the time frame of the Rule, then all class members lose.
(3) The entire class gift is VOID, even if there are persons who satisfy the class definition and therefore appear vested in their interests.
(4) Remember the old maxim: Bad as to one - Bad as to all!! Look carefully at the facts to be sure that there is NO POSSIBILITY that a class member’s gift might vest outside the time period of the Rule.
O conveys Blackacre to Mary for life, then to such of Mary’s children as reach the age of 30. Mary is now 87, and she has 3 children, all in their 60s.
What interests are left AFTER applying the Rule?
Mary:
Mary’s Children:
O:
Mary: Life Estate
Mary’s Children: NOTHING
O: Back to O because of reversion
