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Property

Property

by selesa77, Jul. 2010

Subjects: mbe property

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Present Estates	1. The fee simple absolute 2. The fee tail 3. Defeasible fees 4. The life estate
Language to create a fee simple absolute	"To A" or "To A and his heirs"
Characteristics of fee simple absolute	Absolute ownership of potentially infinite duration Freely devisable, descendable and alienable
Future interest accompanying a fee simple absolute?	None, even if O leaves the property "to A and his heirs," the heirs have nothing. (A living person has no heirs)
Language to create a fee tail estate	"To A and the heirs of his body"
Distinguishing characteristics of the fee tail	Virtually abolished in U.S. (and almost never tested) But historically the fee tail estate would pass directly to grantee's lineal blood descendants no matter what Today, language attempting to create a fee tail creates a fee simple absolute
Future interest accompanying the fee tail	The future interest in O, the grantor, was called a reversion In a 3rd party (someone other than O), it was called a remainder
Language to create a fee simple determinable	"To A for so long as..." "To A during..." "To A until..." Grantor must use clear durational language. If the stated condition is violated, forfeiture is automatic.
Distinguishing characteristics of the fee simple determinable	This estate is devisable, descendable and alienable, but always subject to the condition.
Hypo: Paul conveys Blackacre "to Ringo so long as the premises are used as a recording studio." Ringo has?	A fee simple determinable Side 3 question: Suppose Ringo in turn conveys to Mick, who seeks to convert the recording studio into a bowl-a-rama. May Mick do so?	No, not w/o forfeiting the estate. You may convey less than you started with, but you cannot convey more. (The Mick Jagger Rule: You can't always get what you want.)
Future interest accompanying the fee simple determinable	It is the possibility of reverter in the grantor.
Hypo: Frank Sinatra conveys Sinatra Palace "to Orville Redenbacher, so long as popcorn is never made on the premises." Classify Orville's interest and Frank's.	Orville has a fee simple determinable. Frank has a possibility of reverter. FSDPOR - Frank Sinatra didn't prefer Orville Redenbacher (fee simple determinable - possibility of reverter)
Language to create the fee simple subject to condition subsequent	"To A, but if X event occurs, grantor reserves the right to reenter and retake" The grantor must use clear durational language and carve out the right to reenter
Hypo: Ross conveys "To Rachel, but if coffee is ever consumed on the premises, grantor reserves the right to reenter and retake." Classify Rachel's and Ross's interests:	Rachel has a fee simple subject to condition subsequent. Ross has a right of entry aka power of termination.
Distinguishing characteristics of the fee simple subject to condition subsequent	The estate is not automatically terminated, but it can be cut short at the grantor's option if the condition occurs. Accompanying future interest is: the right of entry (which is synonymous w/the power of termination).
Language to create a fee simple subject to executory interest	"To A, but if X event occurs, then to B."
Hypo: O grants "to Barry Manilow, but if Manilow ever performs music on the premises, then to Mandy." Barry's and Mandy's interests:	Barry has a fee simple subject to Mandy's shifting executory interest. Mandy has a shifting executory interest.
Distinguishing characteristics of the fee simple subject to executory limitation	It's just like the fee simple determinable, only if the condition is broken, the estate is automatically forfeited in favor of someone other than the grantor.
Future interest accompanying the fee simple subject to executory limitation	A shifting executory interest
Hypo: "To A for the purpose of constructing a day care center"	A is vested w/a fee simple absolute. Rule: Words of mere hope, desire or intention are insufficient to create a defeasible fee. Clear durational language must be used.
Hypo: "To A with the hope that he becomes a lawyer"	Fee simple absolute No clear durational language, merely words of hope
Hypo: "To A with the expectation that the premises will be used as a Blockbuster"	Fee simple absolute Words of mere expectation do not create a defeasible fee.
Absolute restraint on alienation 1. Define 2. When allowed	1. An absolute ban on the power to sell or transfer 2. It's always void. Restraints on alienation have to be linked to a reasonable, time-limited purpose.
Hypo: To A so long as she never attempts to sell.	A has a fee simple absolute and O has nothing. Absolute restraints on alienation are void.
Hypo: To A so long as she does not attempt to sell until the year 2011, when the clouds on the title will be resolved. A's interest? Any future interest?	A has a fee simple determinable. O has the possibility of reverter. The restraint on alienation is linked to a reasonable, time-limited purpose, therefore it is valid.
Language to create a life estate	"To A for life" "To A for the life of B" The estate must be measured in explicit lifetime terms, and NEVER in terms of years. (The romantic estate)
Life estate pur autre vie	A life estate measured by a life other than the grantee's.
Hypo: "To A for life" A's interest Any future interest	A has a life estate (A is the life tenant) O has a reversion (at the end of A's lifetime, the estate reverts back to O or O's heirs)
Life tenant	The grantee of a life estate
Hypo: To A for 50 years if she lives that long	A has a term of years (a leasehold estate) NOT a life estate
Hypo: To Madonna for the life of David Letterman Madonna, O, & David Letterman's interests	Madonna has a life estate pur autre vie. O has a reversion. At the end of Letterman's life, the estate reverts back to O or O's heirs. Letterman has nothing.
Hypo: O conveys to Madonna for life. Madonna then sells her entire interest to David Letterman.	David Letterman has a life estate pur autre vie. O has a reversion. At the end of Madonna's life, the estate reverts back to O or O's heirs.
Distinguishing characteristics of the life estate	Two general rules: 1. The life tenant is entitled to all ordinary uses and profits from the land. 2. The life tenant must not commit waste (not do anything to hurt the future interest holders).
The three species of waste	1. Voluntary/Affirmative waste - overt conduct that causes a drop in value 2. Permissive waste or neglect - land is allowed to fall into disrepair 3. Ameliorative waste - waste that enhances the property's value
Voluntary or affirmative waste	General rule: the life tenant must not consume or exploit natural resources on the property (such as timber, oil or minerals), unless one of the four exceptions applies. Side 3, the four exceptions	PURGE 1. PU: prior use 2. R: reasonable repairs 3. G: grant 4. E: exploitation
Prior use exception to voluntary waste	If the land was used for exploitation prior to the grant, the life tenant may continue to exploit, unless otherwise agreed. Side 3, the open mines doctrine	If mining was done on the land before the life estate began, the life tenant may continue to mine, but is limited to the mines already open. The life tenant must not open any new mines.
Reasonable repairs exception to voluntary waste	The life tenant may consume natural resources for reasonable repairs and maintenance.
Grant exception to voluntary waste	The life tenant may exploit if expressly granted that right
Exploitation exception to voluntary waste	If the land is suitable only for exploitation (e.g. a quarry), the life tenant may exploit unless o/w agreed.
Obligations for life tenants arising under permissive waste	1. Obligation to repair - life tenant must maintain the premises in reasonably good repair (not a high std.; patching holes, but not replacing a roof) 2. Obligation to pay ordinary taxes - life tenant must pay ordinary taxes on the land to the extent of income or profits from the land. If there is no income or profits, the life tenant is req. to pay ordinary taxes to the extent of the fair rental value of the premises.
Ameliorative waste, general rule	The life tenant must not engage in acts that will enhance the property's value, unless all future interest holders are known and consent.
Future interest accompanying a life estate	If held by O, the grantor, the future interest is called a reversion. If held by a third party, it's called a remainder.
6 future interest categories	1. Possibility of reverter 2. Right of entry aka Power of termination 3. Reversion 4. Vested remainder 5. Contingent remainder 6. Executory interest
Possibility of reverter	Future interest for the grantor Accompanies only the fee simple determinable (FSDPOR)
Right of Entry	aka Power of termination Future interest in the grantor Accompanies only the fee simple subject to condition subsequent
Reversion	Future interest that arises in the grantor who transfers an estate of lesser quantum than she started with, (other than fee simple determinable or fee simple subject to condition subsequent)
Hypo: O, the holder of a fee simple absolute, conveys: "To A for life."	O has conveyed less than she started with (a life estate) to A, so O has a reversion.
Hypo: O, the holder of a fee simple absolute, conveys "To A for life, then to B for 99 years."	A - life estae B - term of years O has still conveyed less than she started with (fee simple absolute is potentially infinite) so O has a reversion.
Three species of vested remainder	1. Indefeasibly vested remainder 2. Vested remainder subject to complete defeasance (aka vested remainder subject to total divestment) 3. Vested remainder subject to open
Two species of executory interests	1. Shifting 2. Springing
Remainder, definition	Future interest in a grantee Capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created Side 3, "Remainderman"	To remember what a remainder is: Remainderman is sociable, patient and polite Sociable - remainders always accompany a preceding estate of fixed duration (usually a life estate or term of years) Patient and polite - never follows a defeasible fee, b/c remainderman cannot cut short or divest a prior transferee. (executory interests follow defeasible fees if the future interest is held by someone other than the grantor)
Vested vs. Contingent remainders	Vested - both created in an ascertainable person and is not subject to any condition precedent Contingent - created in an unascertained person or subject to a condition precedent (or both) Side 3, Condition precedent, definition	A condition is a condition precedent when it must be met before the remainderman can take. (A condition subsequent terminates the preceding estate if it occurs, a condition precedent must occur before the estate is created)
Hypo: To A for life, then to B's first child. A is alive. B, as yet, has no children.	A has a life estate, there is a contingent remainder, (b/c it is created in an unascertained person).
Hypo: To A for life, then to B's heirs.	A has a life estate There is a contingent remainder (b/c a living person has no heirs, so it's created in an unascertained person).
Hypo: To A for life, then to those children of B who survive A. A is alive.	A has a life estate, there's a contingent remainder, b/c we don't know which of B's children might survive A.
Hypo: To A for life, then, if B graduates from college, to B."	A has a life estate B has a contingent remainder b/c it is subject to a condition precedent (graduating from college). O has a reversion (if B never graduates, O or O's heirs take). If B graduates from college during A's lifetime, B's contingent remainder is transformed automatically into an indefeasibly vested remainder.
Hypo: To A for life, and if B has reached the age of 21, to B.	A has a life estate B has a contingent remainder O has a reversion (if B never reaches 21, the estate reverts back to O and O's heirs) If B reaches 21 during A's lifetime, B's contingent remainder is transformed automatically into an indefeasibly vested remainder.
The rule of destructibility and contingent remainders	At common law, a contingent remainder was destroyed if it was still contingent at the time the preceding estate ended. e.g. "To A for life and if B has reached 21, to B." If A died and B was only 19, historically at common law, B's contingent remainder was destroyed. O or O's heirs would take in fee simple absolute. *Note: the call of the question will say "historically at common law" if you're supposed to apply the rule of destructibility. Side 3, modern law	The rule of destructibility has been abolished. Thus, if B has not reached 21 when A dies, O or O's heirs hold the estate subject to B's springing executory interest. Once B reaches 21, B takes.
The Rule in Shelley's case	Applies on when O conveys "To A for life, then at A's death, to A's heirs." Historically at common law, the present and future interests would merge and A would have a fee simple absolute (even if O intended o/w). Side 3, modern law	Today, the Rule in Shelley's case has been virtually abolished. Instead, A would have a life estate, A's as yet unknown heirs would have a contingent remainder. And O would have a reversion b/c A could die w/o heirs.
Doctrine of worthier title	It applies when O tries to create a future interest in his heirs. E.g. O conveys "To A for life, then to O's heirs." B/c of the doctrine of worthier title, the contingent remainder in O's heirs is void. A has a life estate and O has a reversion. (The doctrine is intended to promote the free transfer of land) Grantor's intent controls though (unlike Shelley's rule). If grantor intended to create a contingent remainder in his heirs, that intent is binding. Doctrine of worthier title is still viable in most states.
Indefeasibly vested remainder	The holder of the remainder is certain to acquire an estate in the future with no condition attached.
Hypo: To A for life, then to B. Both A and B are alive, characterize their interests as specifically as possible.	A has a life estate B has an indefeasibly vested remainder Side 3, what if B predeceases A?	At common law, B's future interest passes by his will or by intestacy to his heirs.
Vested remainder subject to complete defeasance	Aka the vested remainder subject to total divestment Remainderman's taking is not subject to any condition precedent, BUT, his right to possession could be cut short because of a condition subsequent
Hypo: To A for life, remainder to B, provided, however, that if B dies under the age of 25, to C. A is alive, B is 20 years old.	A has a life estate B has a vested remainder subject to complete defeasance (b/c it's a condition subsequent that could cut his estate short) C has a shifting executory interest O has a reversion, b/c it is possible that neither C nor C's heirs will exist if and when the condition is breached. If B is under 25 at the age of A's death, B still takes. However, B must live to 25 to retain his interest in the estate. O/w B or B's heirs lose it all, and C or C's heirs take.
Hypo: To A for life, and if B has reached the age of 25, to B. A is alive, B is 20 years old.	A has a life estate B has a contingent remainder b/c his taking is subject to a condition precedent. O has a reversion If B is still alive but under 25 at A's death, the estate reverts back to O or O's heirs subject to B's springing executory interest. If B reaches 25, B divests O.
Vested remainder subject to open	A remainder is vested in a group of takers, at least one of whom is qualified to take. But each class member's share is subject to partial diminution because additional takers can still qualify as class members.
Hypo: To A for life, then to B's children. A is alive. B has two children C and D.	A has a life estate C and D have a vested remainder subject to open
Open class vs. closed class	A class is open if it is possible for others to enter. A class is closed when its maximum membership has been set. The class is closed when any member can demand possession.
Hypo: To A for life, then to B's children. B has two children C and D. When would the class be closed?	At B's death (b/c B can't have more children) OR at A's death, b/c either C or D can demand possession. Once A dies, a child of B will not share in the gift, unless the child was in the womb at A's death. Side 3, what if C or D predeceases A?	Their share goes to their devisees or heirs.
Shifting executory interest	It always follows a defeasible fee and cuts short someone other than the grantor.
Hypo: To A and her heirs, but if B returns from Canada sometime in the next year, to B and his heirs.	A has a fee simple subject to B's shifting executory interest B has a shifting executory interest Side 3, why doesn't B have a remainder?	B/c remainders never follow defeasible fees (always patient and polite)
Hypo: To A, but if A uses the land for nonresidential purposes at any time during the next 20 years, then to B	A has a fee simple subject to B's shifting executory interest B has a shifting executory interest Side 3, does the conveyance violate RAP?	No, b/c of the 20-year limit on B's power.
Hypo: To A, if and when he marries. A is unmarried.	A has a springing executory interest. O has a fee simple subject to A's springing executory interest. Side 3, does the conveyance violate RAP?	No, b/c we'll know by the end of A's life if the condition is met or not.
Hypo: To A, if and when he becomes a lawyer	A has a springing executory interest O has a fee simple subject to A's springing executory interest Side 3, does the conveyance violate the rule against perpetuities	No, b/c we'll know by the end of A's life if the condition is met or not.
Rule against perpetuities	Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life. 1. Life in Being 2. + 21 years
Four-step technique for RAP problems:	1. Determine the future interest created by the conveyance (b/c RAP does not apply to: -indefeasibly vested remainders, -future interests created in O, -or vested remainders subject to complete defeasance it applies only to: -contingent remainders, -executory interests and -certain vested remainders subject to open) 2. Identify the conditions precedent to the vesting of the future interest. 3. Identify a measuring life. Look for a person alive at the time of the conveyance and ask whether that person's death is relevant to the condition's occurrence. 4. Ask: will we know w/certainty w/in 21 years of the measuring life if our future interest holder can take?
Hypo: Apply RAP to the following conveyance "To A for life, then to the first of her children to reach the age of 30. A is 70. Her only child B is 29 years old."	1. Identify the future interest O has a potential reversion, so RAP doesn't apply to that. But there is a contingent remainder (b/c we don't know if A will have a child to reach 30, --> unascertained person and condition that may not be met). And RAP applies to contingent remainders. 2. Identify the condition: a child of A has to survive A and reach 30 years old 3. Find a measuring life: A 4. Will we know w/certainty w/in 21 years of the measuring life? No, b/c B could die before reaching 30. A could have a kid, die and the kid wouldn't reach 30 until more than 21 years after A's death. (The law presumes people are fertile, no matter their age) Side 3, identify the interests (To A for life, then to the first of her children to reach 30.)	A has a life estate O has a reversion (the contingent remainder fails b/c it violates RAP)
Two Bright Line Rules of Common Law RAP	1. A gift to an open class that is conditions on members surviving to an age beyond 21 violates common law RAP. Bad as to one, bad as to all. To be valid, the condition precedent must occur w/in the perpetuities period. If it is possible that the estate would vest too remotely w/respect to any class member, the entire class gift is void. 2. Many shifting executory interests violate RAP. An executory interest w/no limit on the time w/in which it must vest violates RAP.
Hypo: To A for life, then to such of A's children as live to attain the age of 30. A has two children: B &C. B is 35, C is 40. A is still alive.	A has a life estate B&C have a vested remainder subject to open, so it is subject to RAP. The class is open (b/c A is alive). And the condition is that members of the open class live to greater than 21, so it fails. O has a reversion and B&C's vested remainders subject to open are void b/c of common law RAP.
Hypo: To A and his heirs so long as the land is used for farm purposes, and if the land ceases to be so used, to B and his heirs. Apply the RAP rule.	1. Classify the future interest: B has a shifting executory interest. RAP applies to executory interests. 2. What are the conditions: The land must cease to be used for farm purposes. 3. Find a measuring life: A 4. Will we know w/certainty w/in 21 years of the death of our measuring life if a future interest holder can take? No, A might abide by the condition during her lifetime. The condition may not be breached until more than 21 years after A dies. --> the executory interest violates RAP and is void Strike the void condition, and what is left is: To A and his heirs, so long as the land is used for farm purposes. Side 3, classify the interests	A has a fee simple determinable O has a possibility of reverter (FSDPOR) *Note: RAP doesn't apply to future interests in O. It's ok that the condition will haunt the land forever in O, the grantor.
Hypo: To A and his heirs, but if the land ceases to be used for farm purposes, to B and his heirs.	B has a shifting executory interest, void b/c we won't know for sure w/in 21 years of the end of A's measuring life. Once the void condition is stricken, we're left with "To A and his heirs, but if the land ceases to be used for farm purposes." B/c the conveyance is no longer grammatically sound, the entire condition is stricken. A therefore has a fee simple absolute. O has nothing.
Charity exception to RAP	A gift from one charity to another does not violate RAP
Hypo: To the American Red Cross, so long as the premises are used for Red Cross purposes, and if they cease to be so used, then to the YMCA.	The condition is not void, b/c of the charity exception to RAP. The American Red Cross has a fee simple subject to the YMCA's valid shifting executory interest.
Reform of the RAP	1. "Wait and see" or "second look" doctrine (majority rule) Under this reform, the validity of any suspect future interest is determined on the basis of the facts as they exist at the end of the measuring life 2. Uniform Statutory RAP Codifies the common law RAP and, in add'n, provides for an alternative 90-year vesting period. 3. (Both of the following doctrines are embraced by "wait and see" and USRAP a. Cy Pres doctrine - "as near as possible." If a given disposition violates the rule, a court may reform it in a way that most closely matches grantor's intent while still complying w/RAP. b. Reduction of any offensive age contingency to 21 years
Three forms of concurrent ownership:	1. Joint tenancy 2. Tenancy by the entirety 3. Tenancy in common
Joint tenancy	2 or more own w/the right of survivorship
Tenancy by the entirety	A marital interest w/the right of survivorship
Tenancy in common	2 or more own w/no right of surivorship
Distinguishing characteristics of joint tenancy	1. Right of survivorship - when one joint tenant dies, his share goes automatically to the surviving joint tenant 2. Alienable, but NOT devisable or descendable (b/c of right of survivorship)
Creation of a joint tenancy	1. The four unities (T-TIP) T - at the same time T - with the same title (in the same instrument) I - w/identical interests P - w/rights to possess the whole 2. Grantor must clearly express the right of survivorship 3. Use of a straw (if grantor already owns but wants to change, has to use a straw to satisfy time and title)
Methods of Severance of a Joint Tenancy	SPAM - Sale, partition and mortgage
Severance of a JTWROS by sale	A joint tenant can sell or transfer her interest during her lifetime even w/o the other's knowledge or consent. B/c the sale disrupts time & title, the buyer is a tenant in common. (But if there were more than 2 joint tenants, the JTWROS remains in tact b/w the others)
Hypo: O conveys "To Phoebe, Ross and Monica as joint tenants w/the right of survivorship."	As JTWROS, each owns 1/3 plus the right to use the whole. Side 3, If Phoebe then sells her interest to Chandler, what is the state of the title?	Phoebe's act severs the joint tenancy as to Phoebe's interest. Ross and Monica still hold 2/3 as joint tenants and Chandler holds 1/3 as tenant in common. If Ross dies, leaving Rachel as his heir, Monica takes Ross's share and holds 2/3 w/Chandler as tenants in common. Rachel takes nothing.
Hypo: O conveys Blackacre to "Ringo, Paul and John as joint tenants with the right of survivorship." Ringo enters into K on Jan. 1 to sell his interest in the joint tenancy to George. Closing will take place on April 1. When does the severance as to Ringo's interest occur and why?	First, R, J and P has a joint tenancy w/rights of survivorship. The severance as to Ringo's interest occurs on Jan 1, b/c of the doctrine of equitable conversion (equity regards as done that which ought to be done).
Three variations of severance of a joint tenancy by partition	1. By voluntary agreement - joint tenants agree 2. Partition in kind - a court action for physical division of the land if in the best interests of all parties (works best for sprawling acreage like a farm or vineyard) 3. Partition by sale - A court action if in the best interests of all where land is sold and proceeds divided proportionately (best for homestead, comm'l building or property not easily divided)
Severance of a joint tenancy by mortgage	Rule: one joint tenant's execution of a mortgage or a lien on his or her share will sever the joint tenancy as to the encumbered share only in a minority of states which follow the title theory of mortgages. In a majority of states, which follow the lien theory of mortgages, a joint tenant's execution of a mortgage on his or her interest will not sever the joint tenancy.
Hypo: Paul, John and George are joint tenants. Suppose now that Paul mortgages his interest in the joint tenancy. Will this sever the joint tenancy as to Paul's interest?	In a minority of jurisdictions to follow the title theory of mortgages, it does sever the joint tenancy as to Paul's interest. In a majority of jurisdictions to follow the lien theory of mortgages, it doesn't.
How to create a tenancy by the entirety	It's a marital interest. It can only be created b/w married partners w/the right of survivorship. In states to recognize the tenancy by the entirety, it arises presumptively. Any conveyance to married partners in those jurisdictions = tenancy by the entirety unless clearly stated o/w.
Characteristics of a Tenancy by the Entirety	1. Very protected -Creditors of only one spouse can't touch tenancy property -Neither tenant acting alone can sever by unilateral conveyance to a third party
Hypo: Tony and Carmella, married to each other, own Blackacre as tenants by the entirety. Tony secretly transfers his interest to Uncle Junior. What does Uncle Junior have?	Nothing, a tenant by the entirety cannot sever the tenancy by unilateral sale to a third party.