I. Estates in Land: Freehold v. Non-Freehold

Question 1

Present Possessory Estates: Freehold vs. Non-Freehold

Answer 1

• Key word for estates is possession
• Estates w/ future rights are called future interests
• Non-Freehold are landlord tenant estates

Question 2

Types of Freehold Estates

Answer 2

1. Fee Simple (including defeasible fees)
2. Life Estate
3. Fee Tail (least important)

Question 3

Fee Simple Absolute: Duration

Answer 3

• INFINITE DURATION: Potentially infinite duration—-could last foreve r
  *

Question 4

FSA: Alienability

Answer 4

• FULLY ALIENABLE: FSA must be fully alienable–no direct restraints on transfer of ownership
  
  • any direct restrain is voided–ignore it
• Conditions may be imposed on the exercises of the fee simple but any attempt to limit right of transfer is void

Question 5

FSA: Right of First Refusal

Answer 5

• RIGHT OF FIRST REFUSAL: valid to allow someone the right of first refusal when transferring the property
• this is a restriction but one considered valid at common law

Question 6

FSA: Creation

Answer 6

• CREATION: common law used words such as To a * heirs. WOuld assume to A was a life state
• today, presume fee simple unless language says otherwise even if it says to A (true in GA)

Question 7

Fee Tail:

Answer 7

• Device to lock property into the grantee’s family
• CREATION: to and the heirs of his or her body
• Modern presumption–> not existent unless says to apply the common law rule. Most states, including GA, have abolished the fee tail

Question 8

Life Estate: Defined

Answer 8

• May come through express or implied creation
• NEver measured by time–only by the measured life (usually the grantee).

Question 9

Life Estate: by ipmlication

Answer 9

• When created by implication, usually created by the necessary implication from the terms of the will.
• E.g. to A & B after the death of C (necessary implication)

Question 10

LIfe Estate: Pur Autre Vie

Answer 10

• Life estate measured by the life of another
• If the life tenant dies before the measuring life dies, life estate passes to the estate of the DECEEASED LIFE TENANT and continues in place unti lthe measuring life dies
  
  • at common law, seisin woud be vacant and anyone could take

Question 11

Life Estate: Transfer of the LIfe Estate

Answer 11

• Transfer is allowed by the life tenant, but the measured life remains the same.
• If the life tenant dies before the measuring life dies, life estate passes to the estate of the life tenant & continues utnil measuring life dies

Question 12

Life Estate and Restraints on Alienation

Answer 12

• Modern rule allows for a provision that terminates the life estate if the life tenant attempts to convey away the life estate
  
  • contrast with FSA

Question 13

Law of Waste, Generally

Answer 13

• LIfe tenant must maintain the sstate
• creates a minimum and a maximum as to what the life tenant may do to the estate

Question 14

Voluntary Waste

Answer 14

• Voluntary waste is any AFFIRMATIVE ACTION beyond the right of maintenance that causes HARM to the premises.
• LIfe tenant may continue the normal use of land (can harvest a corn field but cannot drill for oil on it)
• Change of use resulting in voluntary waste may leave life tenant liable to future interest holder
  *

Question 15

Voluntary Waste: Open Mines Doctrine

Answer 15

• Depletion of natural resources is waste unless consumption of such resources constitutes the normal use of land (e.g. coal mine or granite quarry)
  
  • sale of harvestable crops not waste–must be a depleteable natural resoruce

Question 16

Permissive Waste

Answer 16

Three obligations to avoid Permissive Waste/Failure to Maintain the property

1. Repairs
2. Taxes
3. Mortgage Debt

Does not need to Insure property although an insurable interest exists

Question 17

Permissive Waste: Repairs

Answer 17

• REPAIRS: Has an obligation to make orindary repairs to property but not replacement
  
  • limited to the amount of rents and profits received from the land
  • if not renting, reasoanable rental value of land if life tenant is using hte land
  • if not renting and not using, no repair obligation

Question 18

Permissive Waste: Taxes

Answer 18

TAXES: Tenant must pay all taxes on the property

• Future interest holder has obligation to ensure that taxes are paid b/c if not, could end up with a tax sale that eliminates future interest
• GA: if life tenant fails to make prop tax payment, life estate is forefeited
• Limitations in Liabiilty:
  
  • limited to the amount of rents and profits received from the land
  • if not renting, reasoanable rental value of land if life tenant is using hte land

Question 19

Permissive Waste: Mortgage Debt

Answer 19

• INTEREST NOT PRINCIPAL: Must pay interest on any mortgage indebtedness on property BUT not required to make an principal payments
  
  • future interest owes principal payments
  • Same limitation regarding limits

Question 20

Ameliorative Waste

Answer 20

Occurs when the life tenant alters the property substantially but life tenant actually increases value of the land

• If CHANGED CONDITIONS have made the property RELATIVELY WORTHLESS, then the life tenant can alter property without incurring liability to holder of future interset

Question 21

Seisin

Answer 21

• Means that the holder is the taxpayer
• Applies to all freehold estates. Property law must always know who has seisin at all times and all circumstances

Question 22

What is a future interest

Answer 22

• Interest PRESENTLY EXISTS but POSSESSION HAS NOT OCCURRED, if at all, until some time in the future

Question 23

Future INterests Retained by Grantor

Answer 23

1. Reversion
2. Possibility of Reverter
3. Right of Entry

Question 24

Reversion in the Grantor

Answer 24

Arises whenever the grantor conveys away LESS THAN THE FULL DURATIONAL ESTATE that the grantor had

E.g. A gives estate to B for life while A is still alive.

Question 25

Possibility of Reverter in the Grantor

Answer 25

WHenever the grantor conveys a FSD, Grantor automatically retains a possibility of reverter

• usually comes with condition (e.g. A gives to B and heirs as long as no liquor on property)
• Only comes with FSD
• key words:
  
  • so long as
  • while
  • during
  • until

Question 26

Right of Rentry in the Grantor

Answer 26

• When condition is borken, title does not return to the granttor automatically.
  
  • grantor must exercise his RIGHT OF ENTRY to be able to do it.
• whenever there is a fee simple on condition subsequent it is exercised (O to A and heirs, provided that if A or heirs use liquor, O or heirs may retake premises)
• Magic words
  
  • provided however
  • but if
  • on condition that
• Must be followed by langauge that EXPRESSLY reserves right to renetry

Question 27

Transferability of Future Interests in the Grantor

Answer 27

• All future interests in the Grantor are vested. Therefore they are not subject to the Rule Against Perpetuities
• All freely transferrable at death and the through inter vivos gift.
  
  • EXCEPT Right of entry, which is not transferable through interv vivos

Question 28

Future Interests in Grantee

Answer 28

1. Remainder
2. Executory Interest

Question 29

Vested Remainder in a Grantee

Answer 29

A future interests in a 3P Greantee that comes NATURALLY AND IMMEDIATELY upon the termination of the preceding estate

• All remainders are either vested or contingent
• Vested remainders occur if nothing stands in the way of its becoming possessory on the natural expiratin of the proceeding estate (e.g. there is no condition for possession)
• O to A for life. Upon A’s death, to B.
• will never affect the person in the preceding life estate

Question 30

Contingent Remainder in a Grantee

Answer 30

Arises where there is a condition that Grantee must satisfy before his interest becomes possessory

E.g. O gives to A for life, then to B and his heirs if B survives A. (condition is that B must survive A)

Question 31

Class Gifts: Vested Remainder Subject to Open

Answer 31

WHere the remainder interset is conveyed to a group of unnamed persons whose members are not fully know, class remains open to allow for future persons who qualify as class members by satisfying the class description

e.g. O gives to A for life, then to A’s children. A has three chldren at the time but that list could grow

not a class gift if it mentions the children specifically

also called vested remainder subject to partial divestment

Question 32

Class Gifts: Time for Vesting and the Rule of Convenience

Answer 32

• Under a rule of convenience, the class closes for a gift whenever any class member i_s entitled to a distribution._
• The rule of convenience is a rule of construction, not a rule of law.
• e.g. if given to heirs, once B dies, class is closed even if baby to be born
• later born children lose out unless they’re in gestation

Question 33

Problems with Contingent Remaindrs

Answer 33

• If the grantee is not ascertainable/not in existence at the time conveyance takes effect, then the remainders is contingent on the grantee being born and therefore ascertainable (A to life, then to children–no children born at time)
• remainders (vested or contingent) will become possessory, if at all, ONLY upon the natural expiration of the estate before them
  
  • eg to A and then to A’s widow. If A’s wife is B at conveyance, his widow could be C at vest.

Question 34

Executory Interests

Answer 34

Operates to cut short the estate that comes before it

• Future interest in a grantee not a remainder, must be an executory interest
  
  • remainders never exist in fee simple–it is an executory interest
• Can come in
  
  • Fee simple subject to executory interest (to a so long as used for residential puprose; if used, then to B and heirs)
  • Vested Remainders subject to an executory interest (to a for life, then to b and his heirs, but if B is not surivived by issue, then to C and his heirs)
• Always lable the interests in the order the grants are made. Pay attention to punctuation
• But if ; then to

Question 35

Future INterests and the Law of Waste

Answer 35

• Holders of executory interests do not have standing to sue for waste, whereas the holder of the remainder does have standing to sue for waste

Question 36

Rule Against Perpetuities Defined

Answer 36

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

• No interest will be valid unless it must vest–if at all–with in 21 years after the death of some life in being who was alive at the moment the conveyance was made

Question 37

RAP: How does the rule operate

Answer 37

• always applies to executory interests and contingent remainders and vested remainders subect to open
• ALWAYS ask yourself: Could this future interest possibly vest in the Grantee outside the time period of the Rule (i.e., is it possible that everyone alive at the time of the grant dies—plus more than 21 years go by—before that interest might vest)? If the answer is yes, then the interest is VOID
  
  • (e.g. O gives to A and heirs as long as no alcohol on property; if alcohol ever consumed on property, B and heirs have title)
• Validity is determined at the time the conveyance is made (e.g. interest created). Do not wait to see what happens
  
  • made by will–RAP applies at time of testator’s death
  • Made by deed–at time deed takes effect

Question 38

RAP revision

Answer 38

• Many staes adopt a reform which takes common law rule and adds an alternative 90 years vesting peiord.
  
  • wait and see what actually occurs in the 90 years
• GA: wait-and-see approach. Wait within the 90 years of it
  *

Question 39

RAP: Perpetuities Savings Clause

Answer 39

INcluded in order to save a grant from violating the RAP by ensuring that vesting

(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.

Question 40

Right of First Refusal and RAP

Answer 40

Contingent interests in property, such as options and right of first refusal violate RAP if they could possibly be exercised OUTSDIE THE TIME PERIOD of the rule

To A and heirs, but if they ever try to sell, B gets right of frist refusal

Question 41

Charity to Charity Exception RAP

Answer 41

Saves a gift over to a chiarity where the gift would otherwise violate the Rule b/c it is entirely possible that the gift over might vest outside the time frome.

BOTH TRANSFEREES MUST BE CHARITES

Question 42

Class GIfts and RAP: Age Contingency Beyond 21 in an Open Class and the RAP

Answer 42

Gift given to a class where the gift is contingent on class reaching a certain age. (e.g. when they turn 30)

problem is that whenever the languge used in the grant puts the age contingency BEYOND 21, conveyance loses its link to a life in being

(e.g. O to A for life and then to A’s children once they reach 30; A has no children)

Question 43

Fertile Octogenarian Rule and the RAP

Answer 43

• conclusively presumes that Mary might have another child, regarldess of age or medical condition
• 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 even those who satisfy the interest
• O to M for life, then to M children as reach 30. Mary is 87 w/ 3 children in 60s. Theoretically all vest but law considers possibility that she may have another