Present Possessory Estates Flashcards
(38 cards)
1
Q
Estates in Land - Overview
A
- possessory interests -> can be present or future
- can be freeholds (possession under some legal title or right to hold) or nonfreeholds (mere possession, such as leases)
- DISTINGUISH FROM NONPOSSESSORY INTERESTS (easements, profits, covenants, and servitudes)
2
Q
Present Possessory Estate - Basics
A
- an interest that gives the holder the right to present possession
3
Q
Categories of Present Possessory Estates to Know
A
- fee simple absolute
- defeasible fee
- life estate
- for each of these, make sure you know a) what language creates it and b) what are its distinguishing characteristics (devisable? descendible? alienable?)
4
Q
Devisable - Basic Meaning
A
- capable of passing by will
5
Q
Descendible - Basic Meaning
A
- capable of passing by statutes of intestacy if holder dies “intestate” (without a will)
6
Q
Alienable - Basic Meaning
A
- capable of transfer inter vivos (during lifetime)
7
Q
Fee Simple Absolute - Distinguishing Characteristics
A
- absolute ownership of indefinite/potentially infinite duration
- freely transferable
- devisable by will
- descendible through intestacy
8
Q
Fee Simple Absolute - Language to Create
A
- “To A” or “To A and his heirs”
- generally presumed in the absence of express contrary intent -> language of “and his heirs” is not strictly necessary
*note that even if it says “his heirs”, the heirs have 0 interest (a living person technically doesn’t have heirs, just heirs apparent, and A can transfer whenever to somebody else w/o depriving the heirs of anything)
9
Q
Defeasible Fees - Overall
A
- fee simples with a catch -> can be terminated upon the happening of a stated event
-> defeasible essentially means capable of forfeiture - these estates are fee simples in the sense that their duration is uncertain + potentially infinite, BUT not absolute b/c there’s some kind of condition that makes the property subject to a risk of forfeiture
10
Q
Types of Defeasible Fees
A
3 core ones to note:
- fee simple determinable
- fee simple subject to condition subsequent fee simple subject to an executory interest
11
Q
Fee Simple Determinable - Basic Concept
A
- terminates upon the happening of a stated event and AUTOMATICALLY reverts to the GRANTOR
12
Q
Fee Simple Determinable - Language to Create
A
- created by durational language
-> “to A FOR SO LONG AS”
-> “to A WHILE”
-> “to A DURING”
-> “to A UNTIL” - need clear durational language -> express language limiting the duration of the estate
- WON’T create with mere expressions of motive or purpose (ex: “for the purpose of” or “to be used for”)
13
Q
Fee Simple Determinable - Distinguishing Characteristics
A
- transferable
- devisable by will
- descendible through intestacy
- BUT throughout all of the above, the interest is ALWAYS subject to the attached condition
-> the interest can be conveyed, but whoever takes it does so subject to the estate’s being terminated by the specified event
-> if the stated condition is violated, forfeiture is automatic
14
Q
Fee Simple Determinable - Accompanying Future Interest
A
- possibility of reverter
-> held by the GRANTOR - one and only one future interest attached to fee simple determinable
- when grantor conveys fee simple determinable, the grantor AUTOMATICALLY retains a possibility of reverter
-> that possibility of reverter is transferable, devisable by will, and descendible by intestacy
15
Q
Fee Simple Subject to Condition Subsequent (and Right of Entry) - Basic Concept
A
- an estate in which the grantor reserves the right to terminate the estate upon the happening of a stated event
-> DOESN’T automatically terminate -> grantor must take some action
16
Q
Fee Simple Subject to Condition Subsequent - Creation
A
Two main ingredients:
1) use of conditional words, such as “upon condition that”, “but if”, and “if it happens that” AND
2) an explicit statement of the grantor’s right to re-enter
- ex: “to A, but if X event occurs, grantor reserves the right to re-enter and retake”
17
Q
Fee Simple Subject to Condition Subsequent - Distinguishing Characteristics
A
- NOT automatically terminated if the stated condition occurs
-> GRANTOR DECIDES
-> occurrence of the condition gives grantor right to cut the estate short at their prerogative
18
Q
What happens if conveyance contains both durational language AND power of termination?
A
- likely construed as creating fee simple subject to a condition subsequent
-> the forfeiture is optional at the grantor’s election rather than automatic - policy disfavors forfeiture of estates
19
Q
Fee Simple Subject to Condition Subsequent - Accompanying Future Interest
A
- in GRANTOR
- right of entry, aka power of termination
- must be expressly reserved + doesn’t arise automatically
- most courts hold that rights of entry are NOT transferable inter vivos, but most states agree they are devisable by will, and all states agree they are descendible through intestacy
20
Q
Fee Simple Subject to an Executory Interest - Basic Concept
A
- fee simple terminates upon the happening of a stated event and then passes to a third party rather than reverting to the grantor or giving the grantor right to terminate
- third party has executory interest
21
Q
Fee Simple Subject to an Executory Interest - Language of Creation
A
- look for third party who will take upon forfeiture of a fee simple estate
- ex: “to A, but if X event occurs, then to B”
22
Q
Fee Simple Subject to an Executory Interest - Distinguishing Characteristics
A
- just like the fee simple determinable, only now, if the condition occurs, the estate is automatically forfeited in favor of someone other than the grantor
23
Q
Fee Simple Subject to an Executory Interest - Accompanying Future Interest
A
- shifting executory interest accompanies the fee simple subject to an executory interest
24
Q
Rules of Construction for Defeasible Fees
A
- words of desire, hope, or intention do not create a defeasible fee
-> ex: “with the hope that”, “for the purpose of”, “with the expectation that” NOT enough
-> book notes that courts generally disfavor restrictions on free land use -> won’t find defeasible fees w/o clear language - absolute restraints on alienation are void
- conditions and limitations violating public policy are void
-> typically struck down if purpose is to penalize marriage + encourage divorce, though could be upheld if purpose is to give support until marriage or in event of divorce
25
Fee Tail
- estate where inheritability is limited to lineal heirs
- ex: "to A and the heirs of his body"
- most jurisdictions have abolished these + attempt to create one results in fee simple
26
Life Estate - Basic Concept
- an estate measured by the life or lives of one or more persons
-> need explicit lifetime measurement, never years
27
Life Estate - How Created
- ex: "To A for life"
Ex's where not created:
"To A for 50 yrs, if she lives that long"
"To A for life, but in no event more than 10 yrs"
28
Life Estate Pur Autre Vie
- measured by a life other than the grantee's
- ex: "to A for the life of B"
- also results when the life tenant conveys their life estate to another
-> ex: if A, holder of a life estate, conveys their interest to B, B's interest is still measured by A's lifetime
29
Life Estate - Accompanying Future Interest
- if the future interest is held by O, it is called a reversion
- if held by a third party, it is called a remainder
30
Life Estate - Doctrine of Waste
- life tenant is entitled to all ordinary uses and profits from the land
- BUT life tenant must not commit waste (voluntary, permissive, or ameliorative)
-> can't do anything that injures the interests of a remainderman or holder of the reversion
- future interest holder can sue for damages to enjoin any wasteful acts
- future interest holder is also entitled to reimbursement if they spend money to perform the life tenant's obligations
31
32
Life Estate - Affirmative Waste
- affirmative waste = actual, overt conduct that causes a drop in value
- a life tenant depleting a property's natural resources could constitute voluntary waste -> exploitation of nat resources by life tenant generally limited to situations where:
1) necessary for repair or maintenance
2) the land is suitable only for such use OR
3) it's expressly or impliedly permitted by the grantor
-> open mines doctrine: if mining was done on the land prior to the life estate, the life tenant can continue mining BUT they're limited to the mines that are already open
33
Life Estate - Permissive Waste
- occurs when life tenant fails to comply with their duties (ex: by allowing land to fall into disrepair or by failing to reasonably protect the land)
34
Permissive Waste and Duties of the Life Tenant
Life tenant is obligated to:
- preserve the land + structures in a reasonable state of repair
- pay interest on mortgages (not principal)
- pay special assessments for public improvements of SHORT duration (those of long duration are apportioned between the life tenant and the future interest holder)
- pay ordinary taxes on the land
NOT obligated to insure the premises for the benefit of remaindermen
NOT responsible for damages caused by a third-party tortfeasor
35
Life Tenant - Taxes
- duty to pay taxes is limited to the extent of the total income or profits generated from the land since the life tenant acquired ownership
-> or if the life tenant is in possession of the land herself, to the extent of the greater of the income or profits and the reasonable rental value of the land
- if no income or profit, life tenant is required to pay all ordinary taxes only to the extent of the premises' fair rental value
-> in other words, when there's no income or profits coming from the land, the life tenant's tax liability for the parcel is computed on the basis of its fair rental value instead of its full fair market value
36
Life Tenant - Ameliorative Waste
- a change that benefits the property economically
- life tenant can't engage in acts that will enhance property's value unless all future interest holders are known and consent
37
Life Tenant - Demolition of Buildings
Life tenant may alter or demolish existing buildings IF:
1) the market value of the future interests is not diminished AND EITHER
2) the remaindermen do not object OR
3) a substantial and permanent change in the neighborhood conditions (ex: change from residential to 90% industrial) has deprived the property in its current form of reasonable productivity or usefulness
Vs. worthless property - if the land is practically worthless in its present state, life tenant can seek a partition sale, proceeds of which are put in trust w/ income paid to life tenant
38
Renunciation of Life Estate
- if a life tenant who receives the estate by will or intestacy renounces their interest, the future interest following the life estate is generally accelerated so that it becomes immediately possessory
