Rights In Land

Front 1

Estates In Land - Interests

Back 1

Present Interests

Fee = Absolute, Defeasible, Tail

Life

Term

Future Interests

Grantor = Possibility of Reverter, Right of Entry, Reversion

Third Party = Executory Interest, Remainder

Concurrent Ownership

Joint Tenancy

Tenancy in Common

Tenancy by the Entirety

Front 2

Estates In Land - Present Interests - Fee Simple Absolute And Other Fees

Back 2

• Largest possible estate
• Gives all rights a person may have
• Can last forever/most common
• Termination = owner has no heirs at death
• Words, "O to A"

Other Fees

Fee Simple Determinable

Fee Simple Subject to Condition Subsequent

Fee Simple Subject to Executory Interest

Front 3

Estates In Land - Present Interests - Fee Simple Determinable

Back 3

• Created through durational language
• Durational language = how long fee runs
• Automatically terminates at event, goes back to grantor.
• Example: "A to B for so long as liquor is not served on premises."

Durational Language Examples

• For so long as
• During
• While; or
• Until

Front 4

Estates In Land - Present Interests - Fee Simple Subject to Condition Subsquent

Back 4

• Created through conditional language
• If condition takes place, then courts step in to deprive person of fee simple, goes back to grantor.
• Example: "A to B but if B stops using the premises for residential purposes, the estate shall terminate"
• Courts prefer fee simple subject to condition subject rather than fee simple determinable (when language is ambiguous).

Conditional Language

• Provided; however
• However; if
• But if
• On the condition that
• In the event that

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Estates In Land - Present Interests - Fee Simple Subject to Executory Interest

Back 5

• Created by either conditional or durational language.
• On the happening of the event, the fee estate will terminate and go to a named third party.
• "A to be so long as B uses it for residential purposes, then to C."

Front 6

Estates In Land - Present Interests - Fee Tail

Back 6

• Early common law = fee estate that descended to grantee's lineal descendants (usually male).
• Modern law = Fee tails are disfavored and are treated as fee simple absolutes.
• Example: "A to B and the heirs of his body."

Front 7

Estates In Land - Present Interests - Life Estate

Back 7

• For the duration of the grantee's life, then terminates at death.

Life Estate Pur Autre Vie

• Duration is measured by the life of someone other than the grantee.

• Life estates can be made defeasible.
• Example: "A to B for life, so long as B farms the land."

Front 8

Estates In Land - Present Interests - Term Estate

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• Estate that is limited in duration.
• Example: "A to B for 50 years."

Front 9

Estates in Land - Future Interests - Grantor - Possibility of Reverter

Back 9

• A future interest in the grantor that follows a determinable estate.
• Example: "A to B so long as B farms the land." = possibility of reverter for B's life.
• Automatically created in the grantor, no specific language is necessary.
• Automatically kicks in at the happening of the event, and fee estate is terminated.

• Common law:
• Possibility of reverter could descend through intestacy, but couldn't be devised or transferred inter vivos (while in life).

• Modern law:
• Possibility of reverter can be transferred by law, will, or intestacy.

Front 10

Estates in Land - Future Interests - Grantor - Right of Reentry (Power of Termination)

Back 10

• Terms are used interchangeably
• A future interest in the grantor that can follow a fee simple or life estate subject to a condition subsequent.
• The right of reentry must be spelled out in the conveyance.
• At the happening of the event, the grantor must affirmatively exercise the right of reentry (go to the courts to enforce the rights).

• Common Law:
• Right of reentry could descend through intestacy, but could not be devised or transferred while in life.

• Modern Law:
• Descendible and Divisible, but not transferable inter vivos.

Front 11

Estates in Land - Future Interests - Grantor - Reversion

Back 11

• A future interest retained by the grantor when the grantor transfers less than a fee simple interest.
• Any gaps in the ownership of property is filled by a reversion.
• Example: "A to B for life." creates a life estate in B with a reversion back to the grantor.
• Reversions are transferable, divisible, and descendible.

Front 12

Estates in Land - Future Interests - Third Party - Executory Interests

Back 12

• A future interest in a third person that cuts short the previous estate before its natural termination.
• Any interest that is created in a third party from a fee is always an executory interest.
• Example: "A to B so long as liquor is never served on the premises. If it is ever served, property will pass to C." C has the executory interest.

• Shifting vs. Springing Executory Interests
• Shifting = passes from third party to third party (grantee to grantee).
• Springing = passes from grantee to grantor (hidden reversion).

Front 13

Estates in Land - Future Interests - Third Party - Remainder.

Back 13

• A future interest created in a third person which takes after the natural termination of the previous estate.
• Example: "A to B for life, then to C." C has a remainder.

• Contingent remainder = any remainder that isn't vested

• Vested remainder = occurs when
• The remainder is created in an ascertainable person.
• The person is not subject to any prior condition other than the termination of the previous estate.

Front 14

Estates in Land - Future Interests - Third Party - Remainders Cont.

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Special Types of Vested Remainders

• Vested remainder subject to condition subsequent OR vested remainder subjected to complete divestment:
• Where the remainder is presently vested but;
• Could be terminated via future event.
• Example: "A to Be for life, remainder to C, so long as liquor is never served on the premises". C = vested remainder that can be terminated by serving liquor on premises.

• Vested remainder subject to open/vested subject to partial divestment:
• A remainder that has been made to a class of people, and
• Has at least one member who is ascertainable, but
• May have other members join the class later as long as they satisfy conditions to join class.

Front 15

Estates in Land - Future Interests - Third Party - Remainders Continued

Back 15

Class Openings for Vested Remainders:

• Inter vivos conveyance - opens at the time of conveyance.
• Testamentary conveyance - look who is around when the grantor dies.

Class Closings for Vested Remainders:

• The Rule Against Perpetuities can void a future interest.
• Generally doesn't apply to vested interest except: vested remainders subject to open.
• If a member of a class could potentially violate the Rule Against Perpetuities, it will destroy the entire class gift.

• Rule of Convenience: A class closes as soon as one member becomes entitled to immediate possession of property.

Front 16

Doctrine of Worthier Title

Back 16

It is better to take by will than by devise.

• Example: O conveys "to A for life, remainder to the heirs of O." This creates a rebuttable presumption that O wanted to retain an interest for himself via reversion.

• Requirements for Doctrine of Worthier Title To Apply:
• A must receive an estate less than a fee simple, (life estate or term of years).
• O's heirs must receive a remainder (or executory interest)
• Both interests must be created by the same instrument; and
• Both interests must be legal or both must be equitable.

Front 17

Estates in Land - Waste

Back 17

Determines what someone can or cannot do with the land they own.

Fee estate owners do not worry about waste issues.

Anytime someone is granted less than a fee estate, the doctrine of wastes applies.

The grantee cannot harm the property at the expense of the future interest holder.

Harming the property = waste.

Three types of waste:

• Voluntary Waste (Actual Waste)
• Permissive Waste
• Ameliorative Waste

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Estates in Land - Waste - Voluntary Waste

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• The life/term tenant cannot intentionally or negligently damage the property. Will face liability if they do.

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Estates in Land - Waste - Permissive Waste

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• Life/term tenant must take reasonable steps to avoid damage or they face liability for permissive waste.

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Estates in Land - Waste - Ameliorative Waste

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• Life tenant makes improvements on the land.

• Common Law: any change to the property was considered waste. Life/term tenant was not allowed to make any substantial alterations unless permitted.

• Modern Law: life/term tenant is allowed to commit ameliorative waste if:

• The market value of the future interest is not impaired/depreciated.
• Obtained the permission of the future interest holder.
• Substantial change of circumstances in the neighborhood justifying the improvement.

Front 21

Estates in Land - Waste - Right to Sue

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The holder of a remainder has standing to sue for past or future waste.

• Vested remainderman: allowed to sue for damages or an injunction.
• Contingent remaindermen: cannot sue for damages, can only sue for an injunction.

Front 22

Estates in Land - Restraints on Alienation

Back 22

Types:

• Total Restraint
• Partial Restraint
• Rule Against Perpetuities

Front 23

Estates in Land - Total Restraints

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Example: "A to B, but if B ever tries to sell the property, then the property will revert to A."

On a fee, total restraints will not be enforced.

On less than a fee (life estate/term estate), the restraint will be upheld if not unreasonable.

Front 24

Estates in Land - Partial Restraints

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Types:

• Partial Restraint - "A to B and her heirs, but A reserves the right to buy back the property at any time during A's life."
  

• Right of First Refusal - "A to be and her heirs, but if B ever attempts to sell during A's life, B must first offer the property to A at the same price."

Both of these are valid if reasonable.

• 
  

Front 25

Estates in Land - Rule Against Perpetuities

Back 25

• Common law: "No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.

• Policy: rule allows for the free run of the property to ensure that property isn't tied up for too long.

• Rule applies only to contingencies: what might or could happen.

Front 26

Estates in Land - Rule Against Perpetuities Cont.

Back 26

• Applies ONLY to:
• Executory interests
  
• Contingent remainders
• Vested remainders subject to open
• Purchase options
• Right of first refusal

If part of a conveyance is deemed invalid, the Rule Against Perpetuities knocks out the offending language and the parties deal with whatever is left.

Front 27

Estates in Land - Rule Against Perpetuities Cont.

Back 27

Steps for Rule Against Perpetuties Problem:

• Identify the type of interest to see if rule against perpetuities is applicable.
• Identify if you're able to create a situation under the facts where someone can claim this interest more than 21 years after everyone currently alive at the time of conveyance is dead?
• If yes, then the interest is destroyed. Strike offending language and determine what's left.
• If no, the interest remains.

Front 28

Estates in Land - Concurrent Estates

Back 28

Property transferred to more than one person is held jointly.

Types:

• Joint Tenancy - concurrent ownership where each co-tenant owns an undivided interest in the whole of the property and has a right of survivorship.
• Tenancy In Common - concurrent ownership where each co-tenant owns an undivided interest in the whole of the property.

Front 29

Estates in Land - Concurrent Estates - Right of Survivorship

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Right Of Survivorship: Property that is jointly owned with the right of survivorship creates a situation where if one of the co-tenants dies then under common law, the property went to the other co-owner.

Common Law - A conveyance to two or more people to jointly own property was presumed to create a joined tenancy with right of survivorship.

Modern Law: A conveyance to two or more people creates a tenancy in common with no right of survivorship. To create joint tenancy with right of survivorship, must use language to demonstrate intent.

Right of survivorship take precedent over anything else, primarily a will.

A tenancy in common with no right of survivorship is freely transferable and can be willed away.

Front 30

Estates in Land - Concurrent Estates - Joint Tenancy Creation

Back 30

Creation - Traditionally Required the Four Unities (T.T.I.P.):

• Time - joint tenants have to take at the same time.
• Title - joint tenants have to take by the same instrument.
• Interest - must take the exact same interest in the property (must take equal shares).
• Possession - each has a right to possess the whole.

Creation - Today:

• Most jurisdictions DO NOT require the unities of time and title.
• Each party just has to have an equal interest and right to possess the whole.

Tenancy in Common Creation - Possession is the only unity required.

Front 31

Estates in Land - Concurrent Estates - Severing Joint Tenancies

Back 31

Severing a joint tenancy creates a tenancy in common.

Done by an inter vivos act of the parties:

• Seeking a petition
• Attempt to and succeed in selling an interest in the property (don't have to tell!)

Mortgaging the property may sever it:

• Majority View - Lein Theory Jurisdictions:
• The mortgage is viewed as a lien and does not sever the joint tenancy.

• Minority View - Title Theory Jurisdiction: Mortgage is viewed as transferring title to the bank or lender, which equates to a severance. (PA IS A TITLE THEORY JURISDICTION)
• A mortgage by all joint tenants will not sever in PA!

Front 32

Estates in Land - Concurrent Estates - Tenancy By The Entirety

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Not recognized in a community property state.

Definition: Form of concurrent ownership reserved for marriage, with the right of survivorship.

Severed through: Death or agreement via divorce. No secret severances are allowed.

PENNSYLVANIA

• GIVING PROPERTY TO HUSBAND AND WIFE IS PRESUMED TO CREATE A TENANCY BY THE ENTIRETY. PRESUMPTION IS REBUTTABLE.
  

• SLAYER STATUE - ONE SPOUSE KILLING ANOTHER CAUSES THE DEAD SPOUSE'S INTEREST TO GO TO THE SPOUSE THAT IS ALIVE, BUT WHEN THAT SPOUSE DIES IT GOES TO THE VICTIM'S ESTATE.

• MARRIAGE AFTER THE FACT DOESN'T CURE A FAILED TENANCY BY ENTIRETY CLAIM.

Front 33

Estates in Land - Concurrent Estates - Rights and Duties of Co-Tenants

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Each co-tenant is entitled to posses the whole proeprty.

• If co-tenant is denied such possession: party can be considered to be ousted and can bring a suit for ejectment or damages. Must bring within the statute of limitations.

Profits

• If produced by one of the co-tenant's efforts: other co-tenants have no rights to share in those profits.
• If generated by third party efforts (rent): All co-tenants are entitled to an equal share of the rent.

Expenses

• Taxes/mortgage payments: all co-tenants must pay proportionate share. If no agreement is there to pay, the property is partitioned.

Repairs:

• No direct duty for a co-tenant to make repairs.
• However, if one party makes repairs, that party is allowed an offset against the value of the property.

Improvements:

• No direct duty for a co-tenants to make improvements.
• However, at partition, a party who does improvements is entitled to an offset.