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48 Cards in this Set
- Front
- Back
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What are the two types of PRESENT POSSESSORY INTERESTS?
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Freehold
and Non-Freehold |
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What are the 3 types of Freehold Estates?
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Fee Simple
Life Estate Fee Tail |
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How long does a fee simple estate (FSA) last?
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It CAN last forever.
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What is the most important quality of a fee simple estate?
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The FSA must be FULLY ALIENABLE. there can be no DIRECT restraints on transfer of ownership of FSA.
However, one can place a CONDITION on a FSA. |
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What is the big exception to the inalienability of a FSA?
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It is OK to impose a RIGHT of FIRST REFUSAL.
For ex., Brad wills the farm to Angelina, but provides that if she tries to sell it during her lifetime, then Jennifer has the right of first refusal. |
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At COMMON LAW, what are the MAGIC WORDS required to create a FSA?
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At COMMON LAW, the document had to say "to A and her heirs."
If it just said "to A," then A just got a life estate. |
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What is the MAJORITY RULE regarding creation of FSAs?
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Courts will PRESUME a FSA was granted UNLESS language shows a CLEAR INTENT to do otherwise.
Ex. Can just say "George wills the mansion to Helena." |
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What is a "Fee Tail?"
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At COMMON LAW, the Fee Tail was a device used to LOCK property into the grantee's FAMILY.
MODERN courts do not apply this doctrine. Modern courts would find a FSA. |
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Consider the phrases
"To A and the heirs of his body" & "To A and his bodily heirs." What do they mean at COMMON LAW and in MODERN LAW? |
At COMMON LAW, both phrases would create a Fee Tail.
At MODERN LAW, both phrases create a FSA. |
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What are the two ways in which a LIFE ESTATE may arise?
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A life estate may arise expressly or by implication.
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(1) How is a life estate measured?
(2) If a will says a house goes "to Elvis for 20 years, if he lives that long," does he have a life estate? |
(1) It is ONLY measured in life, NEVER in time.
(2) NO! |
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If O conveys a house to "Tarzan for the life of Jane," what kind of estate does Tarzan have?
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He has a life estate "Pur Autre Vie," and the "measuring life" is Jane's.
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At COMMON LAW, what happens if someone has a LIFE ESTATE PUR AUTRE VIE and the holder of the life estate dies.
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Seisin is VACANT, meaning that ANYBODY TAKES.
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TODAY, what happens if someone has a LIFE ESTATE PUR AUTRE VIE and the holder of the life estate dies?
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The life estate passes to the estate of the DECEASED LIFE TENANT and continues in place UNTIL the measuring life dies.
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In a life estae, if the "measuring life" ends, what happens to the person holding the life estate?
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Their rights end along with the measuring life.
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If the life tenant dies before the measuring life dies, what happens to the life estate?
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The life estate just passes to the estate of the life tenant and continues until the measuring life dies.
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Can you restrain alienation of a life estate?
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Yes!
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Bill conveys property to Paula for life, then to Monica, but provides that if Paula tries to sell her life estate, it terminates and the property goes to Monica in fee simple.
Is this OK? |
Yes. One may place alienation restrictions on life estates.
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What is a life tenant's duties toward an estate?
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He must MAINTAIN the estate.
MAINTAIN means the life tenant may continue NORMAL use of the land. No more, no less. Anything else is considered WASTE. |
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What are the three kinds of WASTE?
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(1) Voluntary Waste
(2) Permissive Waste (3) Ameliorative Waste |
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What is VOLUNTARY WASTE?
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VOLUNTARY WASTE is an AFFIRMATIVE action beyond the right of MAINTENANCE that causes HARM to the premises.
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Does depeletion of natural resources on land conferred by life estate constitute WASTE?
What is this rule called? |
Generally, yes, UNLESS such consumption is the NORMAL use of the land, as in the case of a life estate of a coal mine.
This is the OPEN MINES doctrine. |
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Does the harvest of crops constitute waste?
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NO.
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What is PERMISSIVE WASTE?
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It is a FAILURE to maintain a life estate.
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What three things must a life tenant do to avoid permissive waste?
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(1) Make ordinary repairs
(2) Pay all taxes (3) Pay interest on mortgage debt |
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What sorts of REPAIRS to property must a life tenant do to avoid PERMISSIVE WASTE?
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The life tenant has an obligation to make ORDINARY repairs, but NOT REPLACEMENT.
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(1) Is there any limit on the life tenant's REPAIR obligation?
(2) What if there is NO INCOME (rents and profits) from the life estate? |
(1) Yes. The life tenant's repair obligation is LIMITED to the amount of rents and profits received from the land.
(2) IF the tenant is USING THE LAND the repair obligation is limited to reasonable rental value. IF the tenant is NOT USING the land, he has NO repair obligation. |
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How much taxes must a life tenant pay on a life estate?
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The obligation ONLY extends to the amount of rents and profits received from the land.
If there are NO rents and profits, it is limited to the reasonable rental value of the land IF the life tenant is using the land. |
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What happens if a life tenant fails to pay taxes?
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The holder of the future interest must be sure that the taxes are paid, because a "tax sale" will ELIMINATE the future interest. So, the buyer at the tax sale would take the property clear of the future interest.
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(1) What types of mortgage debt must a life tenant pay?
(2) Generally, who must pay principle on a mortgage? |
(1) Generally, a life tenant must pay INTEREST on any mortgage debt, but is NOT required to make any PRINCIPLE payments.
(2) Generally, the holder of the future interest must pay the principal. |
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A life tenant of a life estate must pay INTEREST on any mortgage indebtedness on the property; what are the limits on this obligation?
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The interest obligation is limited to the amount of rents and profits received.
If there are no rents and profits, and the life tenant is using the land, the obligation is limited to reasonable rental value of the land. |
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Does a life tenant have to pay insurance on life estate property?
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NO. However, the life tenant DOES have an insurable interest in the land.
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What is AMELIORATIVE WASTE?
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Ameliorative waste occurs when a life tenant alters the property substantially, but that alteration INCREASES the value of the land.
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When can a life tenant alter the property without incurring any liability to the holder of the FUTURE interest?
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When CHANGED CONDITIONS have made the property RELATIVELY WORTHLESS.
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What is SEISIN?
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Today, the holder of SEISIN is the TAXPAYER.
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What is a FUTURE INTEREST?
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Well, the INTEREST exists now, but POSSESSION will not take place -- if it takes place at all -- until some time in the FUTURE.
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What three types of future interests are retained by the GRANTOR?
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(1) Reversion
(2) Possibility of reverter (3) Right of entry |
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What two types of future interests are given to the GRANTOR?
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(1) Remainder
(2) Executory Interest |
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When does a REVERSION to the grantor arise?
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A reversion to the grantor arises whenever the grantor conveys LESS than the FULL durational estate that the grantor had.
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EXAMPLE:
O conveys land to A for life. Later, A conveys the land to B for life. What type of interest does each person have? |
A: a LIFE ESTATE measured by A's life. Once it is given to B, A has a REVERSION for life.
B: a LIFE ESTATE measured by B's life and A's life. If A dies, his interest TERMINATES. O: A REVERSION interest in fee simple. When A dies, the property goes back to O by way of REVERSION. |
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O conveys Blackacre to A for life, and A is 86 years old at the time. Later, A leases Blackacre to B for 50 years.
A's interest? B's interest? What if A dies? |
A: Reversion for LIFE.
B: Landlord-tenant estate. If A dies: A's interest is TERMINATED. B's interest is TERMINATED. O gains the property in REVERSION FEE SIMPLE. |
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O conveys Blackacre to A and his heirs for so long as no liquor is consumed on the premises.
What kind of estate does A receive? |
A FEE SIMPLE DETERMINABLE.
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When does a Fee Simple Determinable estate TERMINATE?
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The Fee Simple Determinable Estate terminates automatically upon the occurrence of some EVENT.
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When someone grants a fee simple determinable estate, what does that grantor generally retain?
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A POSSIBILITY of REVERTER.
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What type of estate should you associate with the POSSIBILITY of REVERTER?
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ONLY a fee simple determinable.
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What type of estate should you think of when you see these magic words:
So long as While During Until ? |
FEE SIMPLE DETERMINABLE
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O conveys Blackacre to A and her heirs, provided, however, that if liquor is ever consumed on the premises then O, or O's heirs shall have the right to re-enter and retake the premises.
What type of rights for A? O? |
A: Fee simple on condition subsequent
O: Right of re-entry |
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Imagine you have a fee simple on condition subsequent. What happens when the holder of the FSCS fails to meet the condition?
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Title does not automatically transfer back to the person with the right of re-entry.
He must EXERCISE his right of re-entry; he must DO SOMETHING to retake the property. |
