Ownership of Real Property Flashcards
(27 cards)
Present Estates and Future Interests
Present Estates
An estate is the amount, degree, nature, and quality of a person’s interest in land or other property. Estates are classified in terms of their duration and extent, by the number of persons owning an interest, and as to the period of their enjoyment or use.
Present Estates and Future Interests: Present Estates
Fee Simple Absolute
A fee simple is the broadest interest in land allowed by law, which lasts until the current hold dies without heirs. If a person owns all rights (present and future) to the property, they own a fee simple absolute. A fee simple absolute is full ownership of the land and the duration of this is infinite. This can be transferred, put in a will, or passed down to heirs without a will. It is freely alienable, descendible, and devisable.
Present Estates and Future Interests: Present Estates
Defeasible Fees: Fee Simple Determinable
“To A, so long as A does not drink on the property.”
A fee simple determinable is limited by specific durational language (so long as, until, while, during). It terminates automatically upon the happening of a stated condition and full ownership of the property is returned to the grantor or his successor in interest. The grantor retains a possibility of reverter. To create a fee simple determinable, specific durational language must be used and language that suggested the owner intended to retain a possibility of reverter must be included.
A FSD can be transferred, but the transferee must follow the original condition.
Present Estates and Future Interests: Present Estates
Defeasible Fees: Fee Simple Subject to Condition Subsequent
These are followed by right of entry.
A fee simple to condition subsequent is limited in duration by specific conditional lanaguage (but, if, upon condition). Upon occurrence of the stated condition, the present fee simple will terminate if the grantor affirmatively demonstrates an intent to terminate. The grantor must explicitly retain the right to terminate the fee simple subject to condition subsequent in the conveyance.
Pretty much the exact same thing as a FSD, except if the condition is not fulfilled, it does not automatically go back to the grantor; the grantor can choose to enter or not.
Present Estates and Future Interests: Present Estates
Defeasible Fees: Fee Simple Subject to Executory Interest
An executory interest is a future interest in someone other than the grantor that is not a reversion or right of re-entry. A springing executory interest is an interest directly from the transferor to the transferee upon a certain condition. A shifting executory interest is an interest from the grantee to another grantee.
These are subject to RAP.
Springing EI: “To Alyssa, but only if she passes the Bar exam.”
Shifting EI: “To Alyssa, but if she fails the Bar exam, to Omed.”
Present Estates and Future Interests: Future Interests
Reversions
Reversionary Interests follow defeasible fees. A possibility of reverter follows a fee simple determinable. If the condition is not met, the property automatically reverts back to the original grantor. A right of entry follows a fee simple subject to condition subsequent. If the condition is not met, the original grantor has the choice to re-take the property or not; it is not automatic. Reversions may follow life estates, but only if the holder of the future interest is the original grantor (O simply conveys Blackacre to A, for life).
Possibilities of reverter are always vested.
Present Estates and Future Interests: Future Interests
Remainders (Vested and Contingent)
A remainder typically follows a life estate. A remainder is vested when the remainderman is ascertained and it is certain to become possessory; it is contingent when the remainderman is unborn, unascertained, or if it is uncertain to vest due to a condition.
RAP applies to contingent conditions because we are uncertain if they will vest.
Present Estates and Future Interests: Future Interests
Life Estates and Waste
When do reversions follow life estates? When do remainders follow life estates?
A life estate is an estate held only for the duration of a specified person’s life, usually the possessor’s. Life tenants cannot commit waste (permissive, affirmative, or ameliorative). Affirmative waste involves eliminating or reducing the natural resources on the property. Permissive waste occurs when the life tenant neglects to maintain the property by failing to do things like make regular repairs, pay property taxes, or make interest payments on the mortgage. Amoeliorative waste occurs when the lief tenant makes changes to the property that increase its value.
Reversions follow life estates when the holder of the future interest is the original grantor, and remainders follow life estates when the holder of the future interest is not the original grantor.
Present Estates and Future Interests: Future Interests
Rules Affecting These Interests (Survivorship, Class Gifts, Waste, and Cy Pres)
Class gifts are gifts to unnamed persons. Cy Pres occurs when a gift to a charity fails and the court reforms it to match the donor’s intention. There must be money or property given for a charitable purpose, it must be impossible, impracticable, or illegal to carry out the purpose, and the settlor must have manifested a general intent to devote thr property to a charitable purpose.
Cotenancy
Types: Tenancy In Common
A tenancy in common is any tenancy with two or more grantees with equal rights to possess or use the property, but no right of survivorship. It is freely alienable and inheritable.
This tenancy is the default tenancy if nothing is specifed in the instrument.
Cotenancy
Types: Joint Tenancy
A joint tenancy exists when two or more persons own property with the right of survivorship. The joint tenancy must be created with each joint tenant having the equal right to possess or use the property, with each interest equal to the others, at the same time, and in the same instrument. In most states, there is presumption that a conveyance to two or more persons creates a tenancy in common rather than a joint tenancy. To determine if a joint tenancy was created, modern law calls for a clear expression of intent and survivorship language.
One cannot give a joint tenancy interest by will.
Lien Theory State = Mortgage does not break the JT
Title Theory State = Mortgage does break the JT
Cotenancy
Tenancy By The Entirety
The tenancy by the entirety is a marital estate that is recognized today only in a minority of states. In a tenancy by the entirety, a husband and wife own the interest with the right of survivorship. There is a right of survivorship, and the tenancy can only be terminated by death, mutual agreement, divorce, or a mutual creditor of both executing on its interest.
Cotenancy: Rights and Obligations of Cotenants
Partition
A partition in kind refers to a court physically dividing a property between tenants, while a partition by sale refers to the property being sold and each tenant taking a share of the net proceeds according to their percentage of ownership interest.
Cotenancy: Rights and Obligations of Cotenants
Severance
A joint tenancy will be severed by the sale of one joint tenant’s interest. The new buyer would be a tenant in common.
Cotenancy: Rights and Obligations of Cotenants
Relations Among Cotenants
Every tenant in common has the right to use and enjoy the property – and tenants in common can sell their share, convey their share, etc. However, when a cotenant, acting alone, brings in a third party to stay there and is paid rent by this third party, this cotenant owes money to the other cotenants (essentially, all cotenants are affected by the third person now living there, and are all entitled to rent from this third party). Further, an ouster is when a person who is entitled to be in possession of the property is kicked out, and this ousted cotenant can sue for money or an injunction.
Landlord-Tenant Law
Types of Tenancies: Periodic Tenancy and Tenancy at Will
If the tenant takes possession and the landlord accepts rent, then a periodic tenancy or tenancy at will is created because there has been partial performance. A tenancy at will may be terminated by either party without notice. A periodic tenancy requires notice of termination before the beginning of the intended last period of the periodic tenancy. Thus, a periodic month-to-month tenancy can be terminated by either party with a one-month notice of termination. A tenancy at will lasts as long as the landlord and tenant will that it lasts.
Landlord-Tenant Law
Types of Tenancies: Tenancy by the Years
A tenancy for years is an estate measured by a fixed and ascertainable amount of time. Termination of a tenancy for years may occur before the expiration of the term, such as when the tenant surrenders the leasehold. A tenant surrenders a lease by transferring the lease back to the landlord with the landlord accepting the return. Many courts require the surrender to be in writing if the original lease was so required. If the landlord accepts surrender, the tenant is not obligated for future rent.
Created by a written lease. If it is for greater than one year, it must be in writing to satisfy the SoF.
Landlord-Tenant Law
Tenancy at Sufferance
A tenancy at sufferance happens when a holdover tenant has a lease of any one of our previous three categories and stays after the expiration of it.
Causing the landlord to suffer = tenancy at sufferance.
Landlord-Tenant Law
Possession and Landlord’s Duties
Upon the creation of a lease, the landlord transfers the right of possession to the tenant for the duration of the lease term, subject to the terms of the lease agreement. The landlord, however, retains ownership of the property and may retain a reversionary interest once the lease expires. Under the modern view, the landlord must put the tenant in actual physical possession of the premise. Under the minority view, the landlord may simply “hand over the keys,” and give legal possession, not true physical possession. A tenant has the right to quiet use and enjoyment of their premises without interfence from the landlord.
One party’s performance is excused if another party materially breaches the contract (but there must proper notice to cure).
Landlord-Tenant Law
Duties of Tenants
Tenants have certain duties and they are as follows: a duty to avoid tortiously injuring third parties, a duty to repair (simply maintain the premisees and make ordinary repairs), and a duty to pay rent. If a tenant stops paying rent, the landlord may either evict them through the court system or continue the relationship as a tenancy at sufferance and sue for the rent due (without engaging in self help). If the tenant stops paying rent and abandons the property, the landlord has three options: the landlord may treat this is as a surrender and the tenant is longer on the hook to pay, the landlord can ignore the abandonment and hold the tenant responsible for the rent anyway, or the landlord can re-let the premise on behalf of the wrongdoer tenant and get a new tenant.
Landlord-Tenant Law
Transfer by Landlord or Tenant
(Assignments and Subleases)
The baseline rule is that absent a prohibition in a lease, a tenant can transfer their interest in whole (assignment) or in part (sublease). If a landlord says you cannot assign, you can still sublease. If a landlord says you cannot sublease, you can still assign. Future, once a landlord consents to one transfer by tenant, he waives the right to object to future transfers by the tenant. When it comes to assignments, the landlord can sue when there is privity of contract (you can sue someone because they signed a contract with you), or when there is privity of estate (relates to who has the reversionary interest, so this would be the assignee, the second tenant). When it comes to subleases, only the sublessor and the sublesee have privity, so the original landlord cannot sue.
If the assignee (tenant 2) doesn’t pay the rent, the landlord can sue both tenant 1 and tenant 2.
Landlord-Tenant Law
Termination (Surrender, Mitigation of Damages, Anticipatory Breach, and Security Deposits)
Termination of a lease occurs automatically upon the expiration of the term. Termination may also occur before the expiration of the term when the tenant surrenders the leasehold, and the landlord accepts the return of the leasehold. When a tenant abandons the leasehold without justification, the landlord may treat the abandonment as an offer of surrender and could accept that surrender by retaking the premises.
Landlord-Tenant Law
Termination (Surrender, Mitigation of Damages, Anticipatory Breach, and Security Deposits)
When a tenant abandons the leasehold, the landlord may treat the abandonment as an offer of surrender and accept such surrender, or the landlord may attempt to re-rent the premises on the tenant’s behalf and hold the tenant liable for any deficiency. The majority of jurisdictions now require a landlord to mitigate damages by attempting to re-rent the premises in the event that the tenant abandons the property and breaches of the lease.
Landlord-Tenant Law
Habitability And Suitability
The implied warranty of habitability essentially states that all minimal living requirements must be met in all residential leases, such as plumbing, running water, heat in the winter, etc. This standard is set by a local housing code or by a judge. This warranty is non-waivable, and if the implied warranty is breached, there are remedies available for the tenant: the tenant can move out and terminate the lease, the tenant can repair the mess up by the landlord and then deduct those costs from their rent price, the tenant can reduce or withhold their rent until a court can determine what the rental value is with the mess up by the landlord, or the tenant can simply remain in possession, pay rent, and then sue for damages.
