REAL PROPERTY RULES! Flashcards
Statutory Presumption
A deed or will creates fee simple unless intent to create lesser estate is clearly expressed in the instrument.
Statute Abolishing Fee Tails (Adopted in 1905)
Fee tail shall be deemed to be fee simple absolute (O to A and heirs of his body).
Rule in Wild’s Case
“O to A and his children,” but A has no children when the will takes effect at O’s death.
NC takes minority approach. Since no children when will took effect, the result is a fee tail which is converted to a fee simple absolute. However, if he has children when O dies, A has 50% interest & kids share 50%.
Rule in Shelley’s Case
NC has abolished the rule, but it only applies to transfer that take effect on and after October 1, 1987. If before, the Rule is when an instrument purports to give life estate to A and a remainder to A’s heirs (or heirs of body), A takes not just the life estate, but also the remainder, and A’s heirs take nothing (they merge). If after 1987, rule doesn’t apply, and kids have vested remainder in fee simple absolute.
Future Interests Retained by the Grantor
Reversion
Reversion is the interest kept by Grantor when he leaves less than the durational estate the grantor had.
Possibility of Reverter
Whenever grantor gives fee simple determinable, he keeps a possibility of reverter. A fee simple determinable ends automatically when the condition happens, and if so, the land automatically reverts back to the grantor.
Right of Entry or Power of Termination
Grantor has right of entry whenever he gives a fee simple on a condition subsequent, and expressly reserves the right of entry. The right is not automatic as he must exercise his right. It can be transferred by will ONLY.
Types of Defeasible Fee Simples
Fee Simple Determinable: “so long as, while, during, until, unless” – creates Possibility of Reverter.
Fee Simple Subject to Condition Subsequent: “on condition that, but if” + reentry language – right of entry
Fee Simple Subject to Executory Interest: “all of above” – Executory interest held by grantee automatic.
Life Estate
A life estate is measured by life and can be created by implication. Forfeiture restrictions are permissible.
Life Estate pur autre vie
A life estate pur autre vie is a life estate measured by the life of someone other than the life estate holder.
Rights and Duties of Life Estate Tenant
A life tenant has a duty to maintain the estate; normal use of land in its present condition.
Voluntary Waste
Voluntary waste is an (1) act beyond maintenance, and (2) causes harm to premise. Liable to future interest.
Open Mines Doctrine
Any depletion of natural resources is waste unless the normal use of the land was to deplete them. NOT crops.
Permissive Waste
If tenant fails to maintain, he has committed permissive waste. To avoid, tenant must (1) make all ordinary repairs, but never replacements, (2) pay taxes on land, and (3) pay interest on the mortgage.
Ameliorative Waste
Occurs if tenant commits voluntary waste, but increased value of property. Allowed if conditions have changed that make the property relatively worthless currently, and committing waste increases its value substantially.
Class Gifts
Class members who die before testator are eliminated b/c their gift lapses.
Rule Against Perpetuities
NC has adopted the Uniform Statutory Rule Against Perpetuities which declares that interest that violate the rule are not invalid, and NC takes a wait & see approach. Under this approach, they become invalid only if they actually fail to vest or terminate within 90 years of when they were created.
O’s will: “life estate to A, remainder to A’s first child to attain age 25.” A is alive and has one child C who is 24 when O dies in 2007.
- Under RAP, we cannot be certain that it could vest in a life in being + 21 years, thus, it violates.
- Under USRAP, we take a wait and see approach, A has life estate & wait and see 90 years for it to vest.
However, if it is a right of first refusal, it becomes invalid if not exercised within 30 years.
However, if it is a possibility of reverter, right of entry, or executory interest, that depends on an event affecting the use of land, the future interest becomes invalid if it does not actually vest w/60 years after it was created.
Future Interests Given to a Grantee
Remainder Generally
A remainder is a future interest created in a transferee that is capable of taking upon prior estate expiring.
Vested Remainder
A remainder is vested when nothing stands it its way of becoming possessory upon prior estate expiring.
Vested Remainder Subject to Open
Class remainder where members are not fully known remains open to allow for future class qualifiers.
Contingent Remainder
A remainder is contingent when something must happen or be known before the remainder can be possessory.
Executory Interest
An executory interest is any future interest that is not a remainder; thus, not capable of taking on natural termination of the preceding life estate. A shifting executory interest occurs when it operates by taking title from grantee to grantee. A springing executory interest occurs by taking title from grantor to grantee.
Concurrent Ownership
Tenancy in Common
Always presumed if created by intestate, deed, or will unless husband & wife.
Joint Tenancy with Right of Survivorship
Never presumed, the deed or will must contain express language showing transferor’s intent to create it. It must state “with ROS.”
NC does NOT require equal ownership. Thus, “O to A (40%), B (40%), & C (40%) as joint tenants w/ ROS” is valid. If A died, his interest will be distributed pro rata share to B and C.
NC does NOT require unity of Time or Title. Thus, “O to O & A as joint tenants w/ ROS” is valid.