Real Property Law Flashcards
Present Estates
i.- Fee Simple Absolute (pleno dominio)
Under common law, an estate in fee simple is an absolute ownership of an estate of infinite duration.
Creation:
- At common law, "To A and his heirs…" (A's heirs have no interest in the property. A living person has no heirs; a living person only has prospective heirs) - Today, "To A …"
Characteristics: A FSA is the largest present possessory estate one can hold.
- freely devisable (can be inherited by will), - descendible (will pass without a will if its holder dies intestate), - alienable (can be transferred during the holder's lifetime) and - future interest (has an infinite duration).
Present Estates
ii.- Defeasible Fee Simple (pleno dominio sometido a condición)
Under common law, a defeasible fee simple is a fee simple estate that is subject to termination by the happening of a specified event. Defeasible estates thus terminate unnaturally.
Generals Rules:
1- Absolute restraints on alienation are void, unless they are linked to a reasonable time-limited purpose. If an absolute restraint on alienation without a reasonable time-limited purpose is part of the grant, it is treated as if the restraint on alienation was never written.
2- historically, the law has disfavored the creation of this figure because they interfere with the owner’s enjoyment of the property, and
3- three types of defeasible fee simple: Fee Simple Determinable, Fee Simple Subject to Condition Subsequent and Fee Simple Simple Subject to Executory Interest.
Present Estates
ii. - Defeasible Fee Simple
- Fee Simple Determinable (rescindible)
Under common law, a fee simple determinable is an estate that automatically terminates and reverts to the grantor on the happening of a specific event.
Creation: using durational language “so long as”, “during”, “until”, and “while”. Ex: “To A for so long as used for residential purposes”. If the property is used for any reason other than a residential purpose, there is an automatic forfeiture of the estate.
Characteristics: devisable, descendible, alienable and future interests (is followed by a possibility of reverter).
If the estates condition is violated, there is an automatic forfeiture of the estate and the estate reverts back to the grantor.
NY Distinction: In NY, a fee determinable is referred to as a “fee on limitation”
Present Estates
ii. - Defeasible Fee Simple
- Fee Simple Subject to Condition Subsequent
Under common law, a fee simple subject to condition subsequent is an estate where the grantor retains the power to terminate the estate of the grantee on the happening of a specified event.
Creation: use clear conditional language “upon condition that”, “provided that”, “but if” and “if it happens that”. The grantor must carve out a right to entry/power of termination upon the happening of a stated event. Upon the happening of the stated event, the grantor has the right of entry, which can be exercised by making reentry or by bringing an action against the grantee.
“To A upon condition that the property is only used for residential purposes, and in the event that it is not so used, i may enter and terminate the estate as hereby conveyed”. If the property is used for any reason other than a residential purpose, the grantor has the option to exercise the right to terminate A’s interest in the property.
Characteristics: devisable, descendible, alienable and future interest (is followed by a right of entry, which is also called a power of termination).
In this one, a breach of the condition does not automatically terminate the interest; the estate continues a conveyed until the grantor or successor affirmatively elects to terminate the estate (op. to SF Determinable).
NY Distinction: in NY, a fee simple subject to condition subsequent is referred to as “fee on condition” with the “right of reacquisition” (is equivalent to the right of entry or power of termination; is devisable, descendible and alienable).
Present Estates
ii. - Defeasible Fee Simple
- Fee Simple Subject to Executory Interest
Under common law, a fee simple subject to executory interest is an estate where upon the happening of a specified event, the estate is automatically forfeited in favor of someone other than the grantor.
Creation: same way as others. However, it goes to someone other than grantor upon the happening of the specified event.
“To A upon condition that the property is only used for residential purposes, and in the event that is not so used, to B”. A has the estate in fee simple subject to executory interest; B has an executory interest in fee simple absolute in the land.
Characteristics: devisable, descendible, alienable and future interests (is followed by an executory interest).
Present Estates
iii.- Life Estate (finca en usufructo vitalicio)
Under common law, a life estate is an estate that is measured by the explicit lifetime of a person and never in terms of years.
Creation: is measured by the life of the grantee. “To A for life” (A is the life tenant; at the end of A’s lifetime, the estate reverts back to O or O’s heirs).
A life estate can be created to end upon the natural life of the grantee, and also it can be made defeasible.
Characteristics:
1- devisable (cannot be inherited by will because its natural termination is at its holder’s death),
2- descendible (will not pass without a will because its natural termination is at its holder’s death),
3- alienable (can be transferred during the holder’s lifetime, but the interest transferred cannot convey more than the life tenant’s interest),
4- future interests ((is subject to a reversion (in the grantor) or a remainder (in a third party). If O gives A a life estate, O retains a reversion. O can also give A a life estate and B the future interest (rather than retaining it for himself) thereby creating a remainder interest in B)),
5- duty not to commit waste (the holder of a life estate is liable under the doctrine of waste to the future interest holder whose interest in the land follows that of the life tenant)
Present Estates
iii. - Life Estate
- Life Estate Pur Autre Vie
Under common law, a life estate pur autre vie is a special type of life estate where the life estate is measured by a life other than of the grantee.
Creation: is measured by a life other than the grantee. Ex: “To A for the life of B” or “To A for B’s life…” (A is the life tenant; at the end of B’s life, the estate reverts to O or O’s heirs). It can be created if a life tenant conveys his interest to another person.
Characteristics: as well as Life estate.
Life Estate Pur Autre Vie If Life Tenant Dies Before Measuring Life Dies: if the life tenant who holds a life estate put autre vie dies before the measuring life dies, the life tenant’s interest passes to the life tenant’s estate (either via will or intestacy) for the remainder of the measuring life’s life. Once the measuring life dies, the interest held by the life tenant’s heir will terminate naturally. Ex: “To A for the life of B” (A dies while B is still alive. A’s heirs become the life tenants pur autre vie for the life of B until B’s death).
Present Estates
iii. - Life Estate
- Doctrine of Waste
As a general rule, a life tenant is entitled to all ordinary uses and profits from the land.
To protect the future interest holders, the life tenant must not commit waste; it is said,life tenant must not do anything to prejudice the interests of the holder of a remainder or reversion. While the holder of a remainder or reversion has the right to possess in the future, a future interest is a present, legally protected right in property. Therefore, if the life tenant commits waste, the holder of a remainder or reversion has the right to sue for damages or to enjoin the life tenant from committing such waste.
Types of waste:
1- Voluntary or affirmative waste,
2- Permissive waste or neglect, and
3- Ameliorative waste.
Present Estates
iii. - Life Estate
- Doctrine of Waste
* Voluntary or Affirmative Waste
It occurs through willful acts of destructiveness that cause a decrease in the value of the property. Ex: cutting down trees or extracting minerals from land.
There are only a few limited situations in which a life tenant may consume or exploit the natural resources of the land. These exceptions are:
1- unless otherwise restricted by the grantor, a life tenant can exploit certain resources if those resources were exploited before the life estate began.
2- unless otherwise restricted by the grantor, a life tenant can mine the land if mining was performed on the land before the life estate began; however, the life tenant must limit mining to the mines already in existence at the start of the life estate; known as the Open Mines Doctrine.
3- unless otherwise restricted by the grantor, a life tenant can use reasonable amounts of natural resources for necessary repairs and maintenance of the premises.
4- unless otherwise restricted by the grantor, a life tenant can use the natural resources if the land is only suitable for exploitation.
5- a life tenant can use the natural resources if expressly granted. the law defers to the intent of the grantor.
Present Estates
iii. - Life Estate
- Doctrine of Waste
* Permissive Waste or Neglect
It is the failure to protect the property or the failure to keep the land in a reasonable condition. A life tenant has an obligation to repair (maintain the property in reasonably good conditions).
Similarly, a life tenant has a duty to pay all ordinary taxes to the extent of income or profits from the land.
Present Estates
iii. - Life Estate
- Doctrine of Waste
* Ameliorative Waste
It is defined as the making of substantial changes to the property that increase the value of the property.
Under common law, any change to the property was actionable waste, even if it increased the value of the property.
Under modern term, a life tenant may engage in acts that will enhance the value of the property if:
1- the market value of the future interests is not diminished,
2- remainder men do not object
3- substantial and permanent change in the neighborhood conditions has deprived the property in its current form of reasonable productivity and usefulness.
NY Distinction: NY follows the modern trend for Ameliorative waste and add four additional requirements:
1- the proposed change is one that a prudent fee simple owner of the land would be likely to make in light of the conditions existing on or in the neighborhood of the land;
2- the proposed change must not violate any agreement regulating the conduct of the life tenant;
3- the life estate must not be for a term of less than 5 years
4- the life tenant must give written notice of the proposed change to all future interest holders at least 30 days prior to the start of the any work.
Concurrent Estates
cotenancies
Under common law, a cotenancy is an estate in which more than one person has the right to the enjoyment and possession of the land at the same time.
General Principles of Cotenancies:
1- Possession and Enjoyment: each tenant is entitled to possess and enjoy the entire property
2- Rent from Covenant in Exclusive Possession: a cotenant in exclusive possession ins to liable to the other cotenants for rent. (ex: A goes on a business trip for a year leaving B, a covenant, to use Blackacre. A cannot demand rent from B because B was in exclusive possession for a year).
The only scenarios in which rent can be demanded by one cotenant is if the other cotenants refuse him enter the property or if the cotenants created an agreement in which one or more cotenants owes the other cotenants rent.
3-Rent from Third Parties: a cotenant who leases all or part of the premises to a thrid party must account for the profits and provide the fair share of the rental income to the other cotenants.
4- Adverse Possession: a cotenant cannot acquire title to the whole property through adverse possession, unless the cotenant is ousted.
5- Carrying Costs: each cotenant is responsible for his share of certain carrying costs, such as taxes and mortgage interest payment. This amount is proportional to the undivided share that the cotenant holds.
6- Repairs: a cotenant is entitled to contribution from other cotenants for reasonable and necessary repairs, provided that he notifies the other cotenants of the repairs.
7- Improvements: there is no right to contribution for improvements made to the property during the con tenancy. However, the cotenant that made the improvements to the property is entitled to a credit equal to the increase in value resulting from the improvements. If the improvements cause a decrease in value to the land, the cotenant that made the improvements is responsible for the decrease in value.
8- Waste: a cotenant may be responsible under the doctrine of waste for the following: voluntary waste, permissive waste, and ameliorative waste.
Types of cotenancies:
1- Tenancy in Common,
2- Joint Tenancy, and
3- Tenancy by the Entirety
Concurrent Estates
i.- Tenancy in Common (Type of cotenancies)
Under common law, a tenancy in common is a tenancy by two or more persons, in equal or unequal divided shares, who each have an equal right to possess the whole property but no right of survivorship.
Description: is a cotenancy where two or more owners have the right to the enjoyment and possession of the land with no right of survivorship.
Ex: if A and B are tenants in common, when A dies, his interest in the tenancy in common will pass to his heirs or devisees. Each owner has a distinct, proportionate, and undivided interest in the property which is descendible, devisable and alienable.
Severance: removing property from a tenancy in common can occur primarily through:
a. - Partition: each tenant in common always has a right to request partition. There are three types:
- Voluntary agreement: in which the parties agree to partition.
- Partition by sale: in which the land is sold pursuant to a judicial proceeding. The proceeds from the sale are then divided according to the proportionate share of ownership
- Partition in kind: in which the land is divided pursuant to a judicial proceeding and allocated proportionately by value among the tenants in common.
b. - Merger: if title to the property vests in one tenant in common, the tenancy in common is destroyed. Ex: A and B are tenants in common. A dies and leaves his interests in the tenancy in common to B. B is the sole owner of the property and is no longer subject to the tenancy in common.
Concurrent Estates
ii.- Joint Tenancy
Under common law, a joint tenancy is a tenancy by two or more persons, who take identical interests simultaneously by the same instrument with the same right of possession and with a right of survivorship.
Creation: is created where two or more owners have the right to the enjoyment and possession of the land with a right of survivorship.
Ex: A, B, C and D are joint tenants. A, B and C will continue to hold the property as joint tenants upon D’s death, each holding a one-third share. D’s share will not pass to D’s heirs or devisees upon his death because of the right of survivorship.
It must be express language that two or more persons own a parcel “as a joint tenants with the right of survivorship”.
A JT is alienable, but not descendible nor devisable due to the right of survivorship.
a.- Four unities:
1.- Time: the interest of all the joint tenants must vest at the same time.
2.- Title: the interest of all the joint tenants must be established by the same title.
3.- Interest: the joint tenants must have identical, equal interests in the property.
4.- Possession: the joint tenants must have the right to possess the whole property.
NY Distincion: in NY, a joint tenancy can be created even if the unities of time and title are not satisfied. By NY statute, a disposition of property to two or more people as executors, trustees, or guardians creates a joint tenancy even without express languages in the conveyance of title.
b.- Use of a Strawperson: under common law, a grantor must use a straw person to satisfy these four unities, not for the modern trend.
Severance: a joint tenancy can be severed by:
- Partition: same as for a tenancy in common. - Sale or Conveyance: A joint tenant can sell or convey his joint interest during his lifetime without the other joint tenant's consent or knowledge. The moment the contract is signed, the seller destroys the unity of time, thereby creating a tenancy in common between the buyer and the remaining joint tenants.
NY Distinction: in NY, the right of survivorship of the non acting party will not be destroyed unless the conveyance is properly recorded in the county courthouse.
- Mortgages (in some jurisdictions): Under common law, a mortgage was viewed as an actual transfer of title, thereby destroying the unity of title and the right of survivorship. Today, a right of survivorship may end by a mortgage, depending on the jurisdiction. Under the minority view, a joint tenant's execution of a mortgage is viewed as a transfer of title, and will end the right of survivorship as to the now encumbered share. Under the majority view, a joint tenant's execution of a mortgage on his interest will not sever a joint tenancy; the mortgage is regarded as a lien on title. Under the lien theory, actual title passes to the creditors only if a foreclosure action is initiated, the equity of redemption expires, and full legal title passes to the creditors.
NY Distinction: NY follows the lien theory of mortgages.
Concurrent Estates
ii.- Tenancy by the Entirety
Under common law, a tenancy by the entirety is a tenancy between husband and wife, arising when a single instrument conveys property to the husband and wife, creating an indestructible right of survivorship, and the interest created is not a joint tenancy.
This is a joint tenancy that is held between husband and wife with an indestructible right of survivorship, that means that one spouse cannot unilaterally end the right of survivorship, absent death or divorce. Similarly, a conveyance of the property must be executed by both spouses; any unilateral conveyance of the property is ineffective.
Creation of TBTE requires five unities:
- Time - Title - Interest - Possession - Marriage
Severance: the indestructible right of survivorship in a tenancy by the entirety can only end by the death of a spouse, divorce, mutual agreement, or execution by a joint creditor of both spouses.
NY Distinction: By NY statute, any grant to both the husband and the wife creates a tenancy by the entirety unless the grantor expressly provides otherwise. If the couple is not legally married, a joint tenancy is created unless a tenancy in common is expressly created. In NY, the right of survivorship in a tenancy by the entirety can only end by mutual agreement, a conveyance signed by both parties, or by divorce. Only a creditor of both parties can reach the property.
