Real Property Flashcards
Defeasible Estate
An estate with a remainder vested in some person, who may lose the vested interest upon the occurrence of some event
• Requires clear words of intent for the remainder to vest
» Words of desire, hope, or aspiration are insufficient
3 Types of Defeasible Estates
Fee Simple Determinable
Fee Simple Subject to Condition Subsequent
Fee Simple Subject to an Executory Interest
Fee Simple Determinable
Property automatically reverts back to grantor upon the happening of a given event
Phrases such as “for so long as,” “while,” “during,” “until,”
» Accompanying future interest = possibility of reverter (retained by grantor)
Fee Simple Subject to Condition Subsequent
Grantor retains power to terminate grantee’s estate (grantor must take action to terminate; does not occur automatically)
“to A, but if he wins the lottery, grantor reserves the
right to reenter and retake”
» Accompanying future interest = right of reentry (retained by grantor)
Fee simple subject to an executory interest
Property automatically transfers to a third party (i.e., someone other than grantor) upon the happening of a given event
“To A, but if A is ever arrested, then to B”
» Accompanying future interest = shifting executory interest (retained by third party)
Future Interests in Grantor
a) Possibility of reverter
• Accompanies a fee simple determinable
b) Right of reentry/power of termination
• Accompanies a fee simple subject to a condition subsequent
c) Reversion
• Default future interest for grants of an estate smaller than a fee simple, such as life estates
• E.g., “to A for life” or “to A for 99 years”
Future Interests in Grantee
a) Vested remainder — three types:
i. Indefeasibly vested remainder
ii. Vested remainder subject to total divestment
iii. Vested remainder subject to open
b) Contingent remainder
c) Executory interest
Remainder
A future interest in a third person that arises immediately upon the termination of the preceding estate
Vested Remainder
A remainder that automatically becomes possessory upon the natural expiration of the preceding estate
• Limitations — vested remainders cannot:
a) Be subject to any condition precedent
b) Vest in an unknown or unascertained person
Types of Vested Remainders
a) Indefeasibly vested remainders
b) Vested remainder subject to total divestment/ executory limitation
c) Vested remainder subject to open
Types of Contingent Remainders
a) There is a condition precedent to the future interest becoming possessory or
b) The future interest vests in an unascertained taker
Indefeasibly Vested Remainder
Becomes possessory immediately upon termination of the prior estate
Vested Remainder Subject to Total Divestment
Subject to some condition subsequent, such that the remainderman could be divested after taking possession
» E.g., “to A for life, remainder to B; but if B weds, to C”
Vested Remainder Subject to Open (Class Gift)
Remainder vested in a described class of takers, at least one of whom is capable of taking possession (i.e., by virtue of being alive) » Not subject to any condition precedent
Rule of Convenience
Class closes whenever any class member can call for distribution of her share; does not apply if it conflicts with the grantor’s expressed intent
Contingent Remainder
A remainder subject to a condition precedent, which must be satisfied before the interest becomes possessory
Rule of Destructibility
At common law, a contingent
remainder is destroyed if it remains contingent (i.e., the condition is not satisfied) when the preceding estate ends
• E.g., O grants “to A for life, then to B once he goes to law school.” A dies and B has not gone to law school
» At common law, B gets nothing upon A’s death
• Modern rule — gives a reversion to grantor or grantor’s heirs until grantee satisfies the condition
Shelley’s Rule
O grants “to A for life, then to A’s heirs” and A is alive
• At common law, the remainder merges and A has a fee simple absolute
• Modern rule — A has a life estate and A’s heirs have contingent remainders
» O has a reversion b/c A could die without heirs
Doctrine of Worthier Title
O conveys “to A for life, then to O’s heirs”
• The contingent remainder in O’s heirs is void; A instead has a life estate and O has a reversion
Executory Interest
A future interest in a third party that takes effect by cutting short some interest — two types: shifting and springing
• Includes any future interest that is not a remainder
• Look for phrases like “but if,” “then to,” “for so long as,” etc.
• Executory interest holders lack standing to sue for waste
Shifting Executory Interest
Always follows a defeasible fee
• Cuts short someone other than the grantor
• E.g., “to A and his heirs, so long as the property is used for storage. But if used for any other purpose, to B and his heirs”
Springing Executory Interest
Cuts short the interest of the
grantor or his heirs
• E.g., “to A, if and when he gets married”
Rule Against Perpetuities
No property interest is valid unless it must vest, if at all, no later than 21 years after the death of a life in being at the time the interest was created
• I.e., a future interest is void if there is any possibility, no
matter how remote, that it will vest more than 21 years after
the death of the measuring life
When does RAP apply?
RAP applies to:
a) Contingent remainders
b) Executory interests
c) Vested remainders subject to open