Ownership Flashcards
(52 cards)
Fee simple absolute (FSA)
Grants all possible rights to land
May last forever - alienable, devisable, and descendible
Only way to terminate: owner dies w/o will or heirs
“To X and their heirs”
Modern view: also “to X”
Fee simple determinable (FSD)
Terminates automatically based on durational language - “for so long as”, “during”, “until”, “while”
Fee simple subject to a condition subsequent (FSSCS)
Based on conditional language - “provided however”, “but if”, etc
Unlike determinable, MUST reserve power of termination to the grantor
Without power of termination, courts interpret attempt to make FSSCS - often fails, becomes FSA
Fee simple subject to executory interest
Durational or conditional language, but interest goes to THIRD PARTY
“A to B on condition that B farms during his lifetime. If he does not, to C”
If B farms, then fee simple, goes to B’s heirs etc. if not, goes to C on B’s death
What is the default position when an interest is ambiguous?
Courts favor free alienability and disfavor forfeiture. Whatever outcome leads to free alienability of the property is most likely
Fee tail
“To B and the /heirs of his body/“
Can pass only to biological children
Disfavored, most jx treat as fee simple absolute these days
Life estate
“A to B for life”
Reverts to A after expiration
Can also be a different life: “to B for duration of C’s life” (if B dies first, goes to B’s estate, but then reverts when C dies)
Can be multiple “for duration of B and C’s lives” - lasts til both die
Can be defeasible “A to B for life, as long as…”
Non-freehold estates
Durational. Basically landlord-tenant
“A to B for 50 years / 1 year / etc”
Grantor future interests (3)
Possibility of reverter
Right of reentry / power of termination
Reversion
Grantee future interests
Executory interest
Remainder
Possibility of reverter
Grantor future interest
Automatic return to grantor after condition met - “silent” interest
Fee simple determinables and life estates automatically create this
Freely transferable
Not subject to RAP because already vested, like all grantor future interests
Power of termination / right of reentry
Grantor future interest
Not silent - MUST be written out, grantor must execute to recover property
FSSCS and defeasible life estates create
Descendible and devisable, but not transferable inter vivos (b/t the living)
Not subject to RAP because already vested, like all grantor future interests
Reversionary interest
Grantor future interest
Created whenever grantee gets less than a fee simple
Comes w life estates, non-freeholds, etc. “Silent” - no language necessary
“A to B for life” - returns to A after B dies
“A to B for life, then to C 10 years after B’s death” - returns to A in between
Freely transferable
Not subject to RAP because already vested, like all grantor future interests
Grantee future interests
Remainder (vested or contingent) Executory interest (springing or shifting)
Remainder
Grantee future interest - created in third party intended to take effect after the NATURAL TERMINATION of the preceding estate
CONTINGENT REMAINDER: not vested yet. “A to B for life, then to oldest child of C then living” - we don’t know who gets it til B dies (a condition precedent)
VESTED REMAINDER: is a) created in an ascertainable person and b) not subject to any conditions precedent. “A to B for life, then to C” gives vested remainder to C
Vested remainder subject to total divestment
Remainder is presently vested but may be terminated on some future event
“A to B for life, then to C, so long as liquor never sold on the premises”
C has vested remainder, with condition SUBSEQUENT - interest divests if liquor sold
A retains reversionary interest! because C could divest
Vested remainder subject to open
Remainder made to a class, w at least one ascertainable member and conditions satisfied BUT, class may open if more events occur "A to B for life, then to children of C" - vests once C has one child, opens if they have more Once C is incapable of more children, interest stops being subject to open
Class opening
Inter vivos conveyance (during life) - opens at time of conveyance
Testamentary conveyance - opens at death of testator
e.g. “A to B for life, then to children of C”. C has child D, D dies before A
if inter vivos - class opens as soon as A conveys. D (and estate) gets an interest
If in A’s will - D dies before class opens at A’s death. D’s estate gets no interest
Class closing
RAP can void a future interest (generally not vested interests, except subject to open) If any member of class could claim in a way that violates RAP, whole class gift fails RULE OF CONVENIENCE: Class closes as soon as one member of the class becomes entitled to immediate possession of the property. "too bad" rule EXAMPLE: “A to B for life, then to the children of C who reach the age of 25.” At B’s death, C has two children: one is 30 and one is 20. A year after B dies, another child is born to C. The 30-year-old has a vested remainder being an ascertainable person over the age of 25, and can go into immediate possession. The class closes. Any child who is alive but has not satisfied the condition may try to do so. If the 20-year-old reaches 25, that child will join the class. The child born to C a year after B died is shut out.
Executory interest (2 types)
Future interest in third person that cuts short previous estate BEFORE natural termination
Fee interests potentially last forever, so any third party interest following a fee is executory
e.g. “A to B so long as liquor not served on premises in B’s lifetime - if it is, passes to C”
Two types
Shifting: passes from one grantee to another, as above
Springing: passes from a grantor to a grantee
e.g. “A to B for life, then to C 20 years after B’s death”. interest returns to grantor after B dies as fee simple, then “springs” to C when executed
Subject to RAP
Doctrine of worthier title:
“worthier to take by descent than by devise”. Grantor cannot create remainder in their heirs.
E.g. “A to B for life, remainder to A’s heirs”. Second clause is destroyed by this doctrine, should just be “A to B for life” w interest reverting (not remainder-ing) back to A and subsequently their heirs when B dies
Doctrine of waste (3 types)
Owner of a fee estate can do whatever they want w property
Owner of less than a fee estate CANNOT commit waste (damage at expense of person who will hold them afterwards). e.g. cutting down trees, mining minerals, etc
Three types:
Voluntary/actual: cannot intentionally/negligently damage property. if so, they’re liable
Permissive: life tenant must take reasonable steps to avoid damage
Ameliorative: life tenant makes IMPROVEMENTS to the land. Illegal under common law but modern law permits if market value not impaired, AND either permitted by remainderer or substantial permanent change in neighborhood justifies improvement
Vested remainderer: can sue for damages or injunction
Contingent remainderer: can only sue for injunction
NOTE: this also applies in mortgage and landlord cases!!!
Rule Against Perpetuities
No property interest is good unless it must vest, if at all, no later than 21 years after some life that exists at time of creation.
Only applies to three future interests: executory, contingent remainder, and vested remainder subject to open. All other future interests exempt.
Also applies to purchase options and right of first refusal.
Only wipes out the future interest in question, not the whole clause. e.g.
“A to B so long as the property is used for residential purposes. If it is not used for residential purposes, then to C.” C has contingent remainder that could vest any time in the future. This interest is eliminated, leaving fee simple determinable, reversion to A.
How to apply the RAP
Step 1: identify the type of interest. Is it:
-executory interest
-contingent remainder
-vested remainder subject to open
-purchase option
-right of first refusal?
(I.e. is it a GRANTEE INTEREST or a PARTIAL RESTRAINT ON ALIENATION?)
If no, RAP doesn’t apply
If one of those, move to:
Step 2: is it possible to interpret the facts so someone can claim an interest more than 21 years after everyone currently alive is dead?
If yes, knock out that interest, interpret the rest accordingly
If no, it’s fine
