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29 Cards in this Set

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Distinction between lost and abandoned property
1. Owners who lose their personal property retain their ownership rights unless they intentionally relinquish them 2. Owners who intentionally abandon their personal property also abandon their ownership rights so the person who finds the item is the new owner
Fee Simple Absolute
Largest estate recognized by law. Can be sold, divided, devised, or inherited and has an indefinite or potentially indefinite duration. Today, fee simple presumed in the absence of express contrary intent (words of inheritance no longer necessary).
Defeasible Fees
Defeasible fees are fee simple estates that can be terminated upon the happening of a stated event. (1) Fee simple determinable (2) Fee simple subject to condition subsequent (3) Fee tail (4) Life estate (5) Estate for years, periodic estate, estate at will, tenancy at sufferance
Define: Good Faith Purchaser
1. An owner does not ordinarily lose title to her property when it is stolen, even if it is subsequently purchased by an innocent buyer a. The thief’s title is void, so there is no valid title to pass b. Court favors original owner in these cases 2. If an owner entrusts an item to a “merchant who deals in goods of that kind”, the merchant has power to “transfer all rights of the entrustor to a buyer in the ordinary course of business”
Fee Simple Determinable (FSD)
Terminates upon happening of stated event and automatically revers to grantor. Created by language like "for so long as" or "until." Can be conveyed but grantee takes subject to limitation. Always followed by possibility of reverter! Possibility of reverter - future interest retained by grantor. Transferable, descindible, and devisable. Watch for statements of motive: "for purpose of" or "to be used for." These are NOT fee simple determinable words.
What is the basic rule of capture?
as a general principle, no one owns wild animals (ferea naturae); However, under the common-law capture rule, property rights in wild animals are obtained only through physical possession. The first person to capture or kill a wild animal takes possession
Fee Simple Subject to a Condition Subsequent
Estate in which grantor reserves right to terminate estate upon happening of stated event. Doesn't automatically terminate like FSD does. Grantor must take some action. Created by conditional language like "but if" or "provided that." Right to terminate is called right of entry. Must be expressly reserved. Some courts hold these rights aren't transferable inter vivos, but most states agree they are devisable and all states agree they are descindible.
Fee Simple Subject to Executory Interest
Like fee simple subject to condition subsequent, but with a twist. Instead of reverting to grantor, passes to third party. Third party has executory interest. Example: "To A and his heirs for so long as liquor not sold on premises; in that event, to B." B has an executory interest.
Fee Tail
Estate where inheritability is limited to lineal heirs. Created by words "to A and the heirs of his body." Most jurisdictions have abolished, and an attempt to create one results in a fee simple.
Life Estate (LE)
Estate measured by life or lives of one or more persons. May be created by operation of law (i.e. dower) or by conveyance. Legal life estates - dower and curtesy. Usual LE is measured by life of grantee (to B for life). May be implied by language like "to C after life of B." LE par autre vie: measured by life other than grantee's (to C for the life of B) or if B ocnveys his life estate (B, holder of LE, conveys interest to D). LE can be determinable, subject to condition subsequent, and subject to executory interest. Usually indefeasible otherwise.
Rights and Duties of Life Tenant
Entitled to any ordinary uses and profits of land, but cannot do anything injuring the interests of holders of future interest. Those injured may sue for damages or to enjoin. Exploitations of natural resources limited to situations when: (1) necessary for repair/maintenance of land, (2) land suitable only for such use, or (3) grantor permitted, expressly or impliedly. Open mines doctrine: If mining was done prior to LE, can continue, but only with those open mines. Life tenant obligated to: (1) preserve land and structures in reasonable stat of repair, (2) pay interest on mortgages (not principle), (3) pay ordinary taxes, and (4) pay special assessments for public improvements of short duration. Not obligated to insure for benefit of remaindermen and not responsible for damages by third party tortfeasor. Ameliorative waste is OK if: (1) market value of future interests not diminished, and either (2) remaindermen don't object, or (3) substantial and permanent change in neighborhood conditions (e.g, change from residential to 90% industrial) deprived property of reasonable productivity and usefulness in current form. If LE interest renounced, future interest accelerated and becomes possessory immediately.
Ameliorative Waste
A change that benefits the property economically. Was actionable at common law, but now life tenant may alter or even demolish buildings in certain situations.
Future Interests
A present, legally protected right in property giving holder right or possibility of future possession of an estate. Possibility of reverter, right of entry, remainder, executory interests, and class gifts.
Reversion
Estate left in a grantor who conveys less than she owns. Arises by operation of law - doesn't have to be expressly reserved. Reversion is alienable, devisable, and inheritable. Holder can sue for waste and for tortious damage to the reversionary interest. Vested, so not subject to Rule Against Perpetuities.
Remainder
Future interest in a third person that can become possessory on the natural expiration of preceding estate. Cannot divest in a prior estate, and cannot follow a time gap after the preceding estate. Must be expressly created in the instrument creating the preceding possessory estate. Examples: A to B for life, then to C and his heirs. C has remainder. A to B for life, then to C and his heirs one day after B's death. C has no remainder. Remainder can NEVER cut short a preceding estate. If that happens, it's an executory interest, not a remainder.
Indefeasibly Vested Remainder
Vested remainder - one created in an existing and ascertained person, and not subject to a condition precedent. Has right to immediate possession upon normal termination of preceding estate. Indefeasibly vested remainder is vested remainder that is not subject to divestment or diminution.
Vested Remainder Subject to Open
Vested remainder created in a class of persons (e.g., children) that is certain to become possessory, but is subject to diminution (by birth of additional class members). More kids = more shares = smaller shares. Example: A to B for life then to children of C. B and C are living, and C has one child, D. D has vested remainder subject to open.
Vested Remainder Subject to Complete Divestment
Vested remainder subject to a condition subsequent. Example: A to B for life, then to C and his heirs, but if C dies unmarried, then to D and his heirs. C has vested remainder subject to complete divestment by D's executory interest.
Contingent Remainder
Those remainders created in unborn or unascertained persons or subject to a condition precedent.
Remainder Subject to Condition Precedent
Condition is precedent if it must be satisfied before remainderman has a right to possession. Examples: A to B for life, then to C and his heirs if C marries D. C's remainder is contingent. A to B for life, then to C and his heirs if C marries D, otherwise to E and his heirs. C and E have alternative contingent remainders. A to B for life, then to C and his heirs, but, if C marries D, then to E and his heirs. C has a vested remainder subject to complete divestment by E's executory interest.
Unborn or Unascertained Persons
Remainder is contingent because until the remainderman is ascertained, no one is ready to take possession if the preceding life estate ends. Example: A to B for life, then to children of C. If C is childless at the time, the remainder is contingent
Destructibility of Contingent Remainders
At common law, contingent remainder destroyed if failed to vest before or upon termination of preceding freehold estate. Most states have abolished, and previously destroyed interest would be converted to executory interest and interest would revert to grantor until executory interest can be exercised. Merger: When one person acquires all present and future interests except a contingent remainder, under common law, contingent remainder is destroyed (but only if those successive interests NOT created by same instrument creating contingent remainder).
Rule in Shelley's Case
At common law, if same instrument created a LE in A and gave remainder only to A's heirs, remainder was not recognized, and A took LE and remainder. Abolished in most states. Example: A to B for life, then to C for life, then to heirs of B. Rule would give B a LE and transform remainder in B's heirs to a remainder in B. No merger, though, because C's remainder in LE is vested.
Doctrine of Worthier Title
Remainder in grantor's heirs is invalid and becomes a reversion interest in grantor. Example: A to B for life, then to A's heirs. B has LE, and A has reversion. Generally treated as a rule of construction, and applies only to inter vivos transfers (not wills) and only if word "heirs" is used.
Executory Interests
Future interests in third parties that either divest a transferee's preceding freehold estate ("shifting interests") or follow a gap in possession or cut short a grantor's estate ("springing interests"). Examples: A to B and his heirs when B marries C. B has springing interest, because he divests grantor's estate. A to B for life, then to C and his heirs, but if C predeceases B, to D and his heirs. D has shifting interest, because divests transferee's preceding estate. Executory interests NOT vested, so subject to Rule Against Perpetuities, but executory interests not destructible.
Transferability of Remainders and Executory Interests
Vested remainders are fully transferable, descendible, and devisable. At common law, contingent remainders and executive interests not transferable inter vivos, but most courts today hold that they are freely transferable. Contingent remainders and executive interests are descindible and devisable, provided survival is not a condition to the interest's taking. Where language is ambiguous, preference is for vested remainders subject to divestment rather than contingent remainders or executive interests. Policy favors early vesting of estates. Any future interest that is transferable is subject to involuntary transfer (i.e., reachable by creditors).
Leasehold
An estate in land under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest (reversion). Tenancy for years, periodic tenancies, tenancies at will, tenancies at sufferance.
Lease
A contract that governs L-T relationship. Covenants in the lease are generally independent (i.e., if one party breaches a covenant, other party can recover damages but must still perform his promises and cannot terminate the L-T relationship). Doctrines of actual and constructive eviction and implied warrant of habitability are exceptions to this rule. Also, many states have created a statutory exception allowing L to terminate the lease for non-payment of rent.
Types of Waste
(1) Voluntary (Affirmative) Waste - T intentionally or negligently damages the premises or exploits minerals on the property. (2) Permissive Waste - T fails to take reasonable steps to protect premises from damage. T liable for all ordinary repairs, excluding ordinary wear and tear. If duty shifted to L, by lease or statute, T has duty to report deficiencies promptly. (3) Ameliorative waste - T alters leased property thereby increasing its value. Generally, T is liable for cost of restoration. Modern exception: T permitted to make this type of change if T is long-term T and change reflects change in neighborhood.