Unit 3 Flashcards

Question

Fee Simple Determinable (FSD)

Answer 1

Automatically expires when the holder of the fee fails to meet the use condition The retained interest of the grantor is called a possibility of reverter “To A as long as…” or “to A until…”

Answer 2

Expires automatically upon the occurrence of the condition The interest of the third party is an executory interest “To A so long as…and then to B” or “to A until… and then to B”

Answer 3

Durational: So long as Until During As long as While Conditional: , but if , but when , on the condition that , provided that , however, if

Answer 4

Durational: - Defeasance is automatic; immediately possession transfers to grantor when event happens - Can use adverse possession here if she meets all elements (lost property but can get back through adverse possession through quiet title action) Conditional: - Comma helps make it conditional - Defeasance at Grantor’s election - 2 things happen: defeasance & grantor elects to take possession back -No limit on time for when O can come back & take it

Answer 5

Expires only when the holder of the fee fails to meet the use condition & the grantor actively seeks to terminate the estate The interest of the grantor is called the right of entry (power of termination) Doesn’t automatically go back, they have to take action “To A on the condition that…” or “to A, but the grantor may reenter if…”

Answer 6

Duration limited to the life of named indv A life estate may be made defeasible by words of limitation or condition Can't give freehold for duration of time that’s not lifetime An inherently limited estate (we all die) Always an associated future interest: reversion (kept by grantor) or remainder (goes to another grantee/third party) Remainder if so stated; otherwise a reversion "To A for life, remainder to B" "To A for the life of B"

Answer 7

Vested: ascertained holder & no condition precedent to taking possession (3 types) 1. Completely vested 2. Vested in a closed class: vested to all members & no one else can join the group 3. Vested in an open class: vested to at least 1 person & at least 1 other person might join the group Contingent: unascertained holder and/or a condition precedent to taking possession

Answer 8

FSA: none FSD: possibility of reverter (POR) FS/CS: right of entry (ROE) FS/EL: executory interest (EI) LE: reversion or remainder

Answer 9

- Possibility of Reverter - Right of Entry - Reversion - Remainder - Executory Interest

Answer 10

Follows FSD If the fee simple determinable comes to an end, possession reverts to the grantor; since it is not certain that this will ever occur, the word “possibility” is used

Answer 11

Follows FS/CS This right gives the transferor ability to take back the estate if the condition subsequent occurs

Answer 12

Follows LE Goes back to grantor

Answer 13

Follows LE Goes to a third party Types: - Vested - Contingent - Combination

Answer 14

If you have control over that interest All grantor future interests are always by definition vested One that is certain to become possessory whenever and however the prior estate terminates We can say at the moment of creation who will take possession Must be: held by ascertained grantees & condition has to be met

Answer 15

One that is not certain to become possessory. The uncertainty can be caused either: occurrence of a condition that might not occur or person is unborn Contingent remainders are subject to the Rule Against Perpetuities, but vested remainders are not All executory interests are contingent

Answer 16

Vested subject to open: a group conveyance with at least one vested & at least one contingent holder is vested subject to open Vested in a closed class: completely divested in close class (no one else can join) or completely contingent

Answer 17

1. A remainder must be created at the same time, & by the same document, that created the prior estate or estates 2. A remainder must follow a freehold estate, but can’t follow a fee simple (typically follows life estate or fee tail) 3. A remainder must not have the capacity to cut short the prior estate or estates 4. There must be no built-in time gap between the termination of the prior estate & the taking of possession of the holder of the remainder

Answer 18

Follows an executory limitation EI is like the remainder is a future interest in one other than the grantor, but generally takes effect by cutting short a prior interest When one of the remainder rules is violated, future interest isn't a remainder so it can be an EI

Answer 19

An interest is invalid unless it can be said, with absolute certainty, that it will either vest or fail to vest, before the end of the period equal to: (1) a life in existence at the time the interest is created plus (2) an additional 21 years The validity of the interest be judged at the time it is created, not at the time the interest actually vests Only applies to contingent future interests (contingent remainder, vested in an open class, EI); doesn't apply to anything with already vested interests Doesn’t talk about when interest will be possessed, only talks about when interest will be vested The RAP is unforgiving. If you can imagine any set of facts or circumstances that would not comply with the life in being + 21 years rule, then it violates the rule Most states have gotten rid of the RAP, either entirely or for certain types of trusts

Answer 20

1. Identify what must happen to vest/close the interest 2. Identify relevant lives in being at creation of the interests 3. Test to see whether any of these can validate the interest 4. If there’s no validating life, cross out the invalid interest & re-label

Answer 21

If the grant is transferred via inter vivos gift, the period commences when the gift becomes irrevocable If the grant is transferred via a will, the period commences upon the date of death of the testator

Answer 22

A life in being is simply one that is alive whenever the interest is created Look for one whose life is connected to the interest at stake We look to someone that we can be absolutely sure that the future interest will either vest or permanently fail to vest during their life/after 21 years of their death. That person is a validating life If no validating life exists, then the future interest is void under the RAP

Answer 23

- Must be a human being that is alive at the time of the grant (conception counts) - Typically validating lives are people named (or implied) in the grant - People can be their own validating lives - Can be a class of people but only if that class is closed (so A’s children works only if A is dead)

Answer 24

If the future interest is found to be in violation (even if the actual scenario is virtually impossible, yet technically possible), the future interest will be stricken from the conveyance When striking from the conveyance, you must attempt to strike not too much; only the void future interest, & any language that becomes nonsensical when the language is stricken For class gifts, the RAP has an all-or-nothing rule

Answer 25

- Fertile octogenarian: anyone alive can always have more children (no matter how old) - Unborn widow: the identify of someone’s widow is only determinable upon that person’s death (& could be anyone who is then alive - no matter how young) - Slothful executor: anything can take much longer than you expect to complete unless bounded by someone’s life

Answer 26

1. The vesting condition is not personal to anyone 2. There is a stated period that is more than 21 years (that will not happen within the life of someone alive today) - The person listed not born yet 3. The interest will go to the generations after the next generation (“grandchildren”) - If testamentary, works - But if not, likely doesn’t work 4. Requires interest holder to survive someone described rather than named (widow, oldest child, etc.) 5. An event has to happen before vesting, & it is possible (however remotely) that it might take longer than 21 years 6. The holder won’t be ascertainable until the death of someone who is described rather than named (widow, heir)

Answer 27

Doctrine of Destructibility: any remainder that's still contingent when the preceding LE ends is destroyed - Not a thing anymore Modern Approach: if a remainder is still contingent when the preceding life estate ends, possession goes to O (backup reversion) & the CR transforms into an executory interest - So O has a FS/EL & the holder of the prior contingent remainder now has a EI

Answer 28

Rule of Convenience: the end of the preceding life estate operates to close the class of a partially-vested class gift A class that is vested in an open class will close when it becomes possessory, so any contingent interest is destroyed at that time If the class is completely contingent when the life estate ends, use the destructibility rule

Answer 29

If you own the present possessory interest & you acquire the future vested interest (or vice versa) & there's no intervening interest that's vested, then you own it all in FSA The two estates will merge and destroy the contingent future estate between them

Answer 30

Transactional drafting is a way to cut off interest so that we save it from RAP Judicial interpretations

Answer 31

If an interest is valid under the RAP, then it is valid under USRAP If an interest is invalid under RAP: - Wait & see whether it will best within 90 years of creation of the interest - If not, the court should try to reform the interest to make it valid Various sorts of conveyances are not subject to the RAP (or USRAP) requirements, including charity-to-charity gifts

Answer 32

"wait & see" approach: - Second chance for failing interests - Wait to see whether it really does vest within the perpetuities period - USRAP: wait & see for 90 years

Answer 33

- Charity-to-charity - Commercial options/deals - Personal property in trust - Any property in any trust (dynasty trusts) - Plus some states abolished the RAP

Answer 34

The right to transfer Alienability is important stick in bundle If restricted too much, the restrictions can be thrown out

Answer 35

Disabling restraint: one that purports to make the transfer of the land literally impossible - Particularly disfavored by courts & almost always held to be void Forfeiture restraint: the grantor is attempting to create a defeasible estate in the grantee that is subject to a right of entry retained by the grantor - The grantee has a present defeasible estate but it only endures until the grantee attempts to transfer the property without the consent of the grantor - If you do it, you lose it - Not effective, at least if permanent & unlimited (if limited, possibly okay) Promissory restraint: where the grantee promises or covenants not to make a further transfer - Agreement among parties not to do it (a k)

Answer 36

2 classes nearly always held void: 1. Disabling restraints (on interests of any duration) 2. Absolute restraints on fee simple estates If the restraint is not absolute or the interest restrained is not fee simple -> may be enforceable - Look to whether there's a legitimate reason for restraint - Greater likelihood of enforceability if original transfer was a gift Spendthrift trust provisions have been upheld in most states

Answer 37

Tort law limits on owner autonomy in cases of shared property ownership Waste = a substantial change in, or harm to, real property by a tenant or life tenant that diminishes the property’s value or impairs the rights of a future interest holder Affirmative & permissive waste Waste tort will show up when 2 or more people share the same property interest Doesn't need to be based on k agmt but there's a tort duty You only need to maintain it up to the rental value of the property (don't require LE to dip into own pockets to maintain it by raising it to another level) Waste may be intentional [voluntary], neglectful [permissive], or involve alterations that might increase value [ameliorative]

Answer 38

Affirmative acts that decrease the value of the future estate

Answer 39

The failure of the present interest holder to act to protect the property

Answer 40

- Doctrine of estovers: allows life tenant to take off land (has to be reasonable use of sources) - Open mines policy: can remove minerals from mines that were already open -Doctrine of emblements: if i spent my labor planting corps & crops haven’t been harvested, I earned through my labor (labor theory), the product of that labor, the crop’s value

Answer 41

- Sue for injunctions to get them to stop - If damage was already done, sue for damages - Normally allowed vested future interests to have choice to either get damages or stop the damage Contingent holders: if you are vested interest holder & someone is committing waste, default right to get them to stop even though it’s a remedy since property is unique. If contingent holder, courts tend to balance equities more

Answer 42

Melms v. Pabst Brewing: but in this case, the land is worth more now since the house is knocked down. It’s waste in a way but not really (waste is destruction in economic value) & here the economic value went up Brokaw v. Fairchild: financially, it’s unwise to object to building this apartment building. However, it’s still waste since you have destroyed something of value - If you destroy something of value & build something of more value, it’s still waste since you destroyed something of value Look at economics, personhood, ownership history, legitimate reasons to tear down, etc.

Unit 3 Flashcards

(66 cards)