Restraints on Alienation

Question 1

General Rule

Answer 1

Generally, any restriction on the transferability of a legal interest is void

Question 2

What the types of restraints on alienation

Answer 2

1) disabling restraints - attempted transfers are ineffective (void)

2) forfeiture restraints - attempted transfer forfeits the interests

3) promissory restraints - attempted transfer breaches a covenant

A disabling restraint on any legal interest is void. Forfeiture and promissory restraints may be valid depending on their nature and interest involved.

Question 3

Restraints on Fee Simple

Answer 3

All absolute restraints on fee simple estates are void.

A partial restraint is one that purports to restrict the power to transfer to specific persons, or by a specific method, or until a specific time.

Forfeiture or promissory restraints on fee simple estate for a limited time and reasonable purpose may be upheld.

Question 4

Discriminatory Restraints

Answer 4

Judicial enforcement of restraints prohibiting the transfer or use of property to or by a person of a specified race, religious, or ethnic group is discriminatory state action and forbidden under the 14th Amendment.

This may also violate the Fair Housing Act.

Question 5

Restraints on Life Estate

Answer 5

Forfeiture and promissory restraints on life estate are valid, but disabling estates are void

Question 6

Restraints on Future Interests

Answer 6

Restraints on vested future interests are generally valid to the extent that restraints on present interests on the same type are valid.

Question 7

Other Valid Restraints on Alienation

Answer 7

1) reasonable restrictions in commercial transactions

2) reasonable options and rights of first refusal

3) restrictions on assignment and sublease of leasehold (for example requiring landlord consent)