Real Property Flashcards
Types of defeasible fees
- Fee simple determinable
- Fee simple subject to condition subsequent
- Fee simple subject to executory interest
Fee simple determinable
limited by specific durational language (i.e., “so long as,” “during,” “while,” “until”).
Future interest: possibility of reverter (automatic)
Fee simple subject to condition subsequent
Limited by specific conditional language (i.e., provided that, on condition that, but if).
Future interest: right of entry/re-entry/power of termination (must be exercised) (devisable and descendible BUT no inter vivos transfer).
Fee simple subject to executory interest
Terminates on occurrence of specified condition and title goes to third party.
Future interest: executory interest (automatic).
Life estate
limited in duration by a life. transferable during that time. not devisable or descendible.
future interest: reversion.
Life tenant obligations
To the extent the property can produce income, must pay all ordinary taxes on the land and interest on the mortgage. if not income, responsible for taxes and mortgage interest to the extent of the reasonable rental value of the land.
no obligation to insure the land for the benefit of the remainderman, no responsibility for damage caused by third party tortfeasor.ojjj
Types of waste
Affirmative waste: over conduct causing decrease in value. (vested remainderman can sue for damages, vested or contingent remainderman can bring injunction). (exception: timber and minerals, necessary to maintain property, in effect when tenancy began).
Permissive waste: neglect to keep up or reasonably protect property. tenant only required to spend amount of income from property.
Ameliorative waste: majority rule allows alteration of structures when necessary for reasonable use.
Types of concurrent estates
Tenancy in common
Joint tenancy
Tenancy by the entirety
Tenancy in common
unity of possession.
no right of survivorship.
transferrable, BUT right to share in rental income.
most states presume this as default.
Joint tenancy
Four unities: Possession, Interest, Time, Title.
Conveyance severs the joint tenancy as regards the transferor.
Joint tenancy and mortgages
Lien theory (majority): mortgage is only a lien and does not sever joint tenancy absent default and foreclosure sale. Title theory (minority): mortgage severs title, converted to tenancy in common.
Joint tenancy and leases
Rule 1: lease destroys unity of interest and severs JT.
rule 2: lease temporarily suspends joint tenancy for life of lease.
Joint tenancy and killing
Rule 1: killer tenant holds deceased tenant’s interest in constructive trust for descendants.
rule 2: felonious killing severs joint tenancy.
Tenancy by the entirety
Five unities: Possession, Interest, Time, Title, Person.
Neither party can alienate or encumber without other’s consent.
Rights of Co-tenants
Not required to share profits from use of property.
Ouster: if denied access, co-tenant can sue for entry and damages for denied use.
Resources: co-tenants entitled to natural resources in proportion to share.
Third-party rents: must share rents with co-tenants based on ownership interest, but can first deduct operating expenses.
Expenses: co-tenant can collect contributions if paying more than his share of necessary or beneficially spent operating expenses, BUT if in sole possession, only the amount exceeding income from use.
Repairs and improvements: no right to reimbursement. BUT, contributions for necessary repairs in action for accounting or partition (minority: separate cause of action for contribution).
Duties of co-tenants
No fiduciary duties UNLESS unity of title.
Duty of fair dealing.
Partition
All co-tenants EXCEPT tenants by entirety have right to partition.
If division not practicable or fair, property may be sold at public auction and proceeds distributed.
Agreements not to seek partition are enforceable, provided they are clear and with a reasonable time limitation.
Types of future interests
Reversion
Possibility of Reverter
Right of reentry
Remainder
Survivorship contingency for remainders
Majority: contingency applies at the termination of the interest preceding distribution of the remainder.
Minority: survive only the testator, not the life tenant.
Vested remainder
No condition precedent, ascertainable grantee.
Fully transferable inter vivos, devisable, and descendible.
Vested subject to open: class of grantees, some member vested at conveyance. when class closes, those in gestation are at closing are included. (rule of convenience: class closes when any member becomes entitled to immediate possession). Vested subject to complete: occurrence of condition subsequent completely divests remainder interest.
Contingent remainder
grantee is unascertainable OR express condition precedent.
Destroyed if not vested by end of previous estate; grantor’s reversion becomes possessory and contingent remainderman gets a springing executory interest.
Rule in Shelley’s case
If grantor tries to create contingent remainder in grantee’s heirs, this is converted into two successive freehold estates, which merge into fee simple absolute.
Abolished in most jurisdictions.
Doctrine of worthier title
No remainders in grantor’s heirs, instead reversion to grantor.
Executory interests
Transferable, subject to RAP.
Shifting: cuts short prior estate created in same conveyance.
Springing: divests the grantor or fills gap in possession when estate reverts to grantor.
Transferability of future interests
Vested remainders: transferable inter vivos, devisable, descendible.
Executory interest/contingent remainders: not transferable under common law, but now transferable, devisable and descnedible in most jurisdictions.
Most states permit creditors to reach transferable future interests.
Interests subject to RAP
Contingent remainders, vested remainders subject to open, executory interests, powers of appointment, rights of first refusal, options.
NOT reversion, possibility of reverter, right of reentry.
Trust interests are subject.
Rule against Perpetuities
Life in being + 21 years.
If no measuring life, 21 years from when future interest is created.
“Vest or fail”
Only the offending interest fails, UNLESS it would violate grantor’s intent, in which case entire transfer is voided.
RAP and classes
If RAP voids transfer to one class member, then transfer to all class member is also voided.
Exceptions:
1) specific $ amount to each class member;
2) transfers to a subclass that vest at a specific time.
Rule of Convenience
Class closes when one member becomes entitled to immediate possession.
Exceptions to RAP
charity-to-charity
current tenant’s option to purchase property.
Uniform Statutory Rule Against Perpetuities
“wait and see”: if an interest does in fact vest within 90 years of creation, it’s okay.
NY: fee simple determinable AKA
fee on limitation
NY: possibility of reverter
may be automatic or conditional based upon the language
NY: fee simple subject to condition subsequent AKA
fee on condition
NY: ameliorative waste
tenant for life or years may alter despite objection if:
(1) no violation of agreement
(2) at least 5 years tenancy
(3) 30 days notice to future interest holder
(4) prudent owner standard
(5) no reduction in market value
future interest holder may require tenant to post security.
NY: statutory redemption
NO right to redemption after foreclosure, BUT can discharge lien prior to auction.
NY: right of survivorship
spouse can separately mortgage his interest without affecting wife’s interest
NY: ouster
10 year adverse possession clock begins after ouster OR after 10 years of exclusive possession.
NY: improvements and repairs
co-tentant entitled to reimbursement for reasonable repairs, BUT NOT for repairs to serve own purposes.
NY: preserving interests
to preserve right of entry or reverter, must file declaration of intent w/in 27 to 30 years, then again between 9-10 years after that, then again every 10 years.
NY: vested remainders subject to complete defeasance AKA
total divestment
remainder vested subject to complete defeasement
NY: remainder subject to condition precedent
includes both contingent remainders and executory interests.
NY: rule in shelley’s case and doctrine of worthier title
both abolished
NY: options to renew leases
RAP does not apply
NY: RAP
no “wait and see” or “cy pres” doctrine, EXCEPT for charitable trust and powers of appointment.
fertile octegenarian = 55
NY: written leases
must be clear and coherent, IF NOT then still valid but tenant gets damages plus $50 fine
NY: periodic tenancy
any holdover tenancy more than one month creates month-to-month periodic tenancy if:
(1) tenant continues to pay rent
(2) landlord accepts payment
NY: terminating tenancy at will or tenancy at sufferance
landlord must give 30 days notice
NY: destruction of leased premises
lease is terminated and tenant excused from paying rent.
NY: landlord self-help
treble damages to wrongfully evicted tenant.
commercial leases can have reentry provisions. landlord must first demand rent.
NY: duty to mitigate
landlord need NOT mitigate damages
NY: new tenants
if there is holdover tenant, new tenant can sue to evict or avoid the lease
NY: holdover tenant
must pay double rent if holdover after landlord demand to vacate or giving notice to vacate
NY: tenants with children
cannot refuse to rent to families with children, EXCEPT for old folks homes.
NY: duty to keep property in good repair
landlord duty to maintain multi-family dwellings.
tenant liable for damage due to negligence or negligence of controlled third party.
NY: assignment vs. sublease
NO assigments without landlord written consent. landlord can refuse without cause.
sublease also requires landlord consent, BUT landlord cannot unreasonably refuse. failure to respond = consent.
NY: adverse possession
adverse possessor must have reasonable belief that she had a right to the land
NY: possibility of reverter as defect
possibility of reverter renders title umarketable.