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26 Cards in this Set
- Front
- Back
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The Present Estate
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oDevisable- can pass by will
oDescendible- pass by the statute of intestacy oAlienable- transferable inter vivos. o4 categories: (1) The Fee Simple Absolute (2) The Fee Tail (3) The Defeasible Fee (4) The Life Estate |
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Present Estate-
Fee Simple Absolute |
Creation: “to A” or “to A for life.” Common law words “for life” are not necessary.
Distinguishing characteristic: This is absolute ownership of potentially infinite duration. It is freely devisable, descendible, and alienable. Future interest: No. A person does not have heirs while alive, only prospective heirs. |
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Present Estate-
Fee Tail |
Creation: “to A and heirs of his body.”
Distinguishing characteristics: The fee tail is virtually abolished in NY. Historically, the grantees lineal blood descendants, not matter what. Today, the attempted creation of fee tail creates fee simple absolute. Future interest: Yes. In the grantor called a reversion. In third party, called remainder. |
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Present Estate
The Defeasible Fee's (types) |
(1) The Fee Simple Determinable
(2) The Fee Simple subject to a condition subsequent (3) Fee Simple subject to execuotry limitation •Words of mere desire, hope, or intention are insufficient to create a defeasible fee. oCourts disfavor restrictions of free use of land. oThus, courts will not find a defeasible fee unless clear, durational language is used. •Absolute restraints on alienation are void. oAn absolute restraint on alienation is an absolute ban on the power to sell/transfer, that is not linked to a reasonable time limited purpose. |
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Present Estate
The Defeasible Fee's: (1) Fee Simple Determinable. |
•In NY it is called a fee on limitation.
•Creation: “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: This estate, like all of the defeasible fees, is divisible, descendible, and alienable, but always subject to the condition. oYou may convey less than what you started with, but you cant convey more. •Future interest: It is the possibility of reverter in the grantor. •(FSDPOR)- Frank Sinatra didn’t prefer orville redenbacker. |
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Present Estate
Defeasible Fee's (2) Fee simple subject to condition subsequent |
•In NY, the fee simple subject to condition subsequent is called: a fee on condition
•Creation: “To A, but if X even occurs, grantor reserves the right to reenter and retake.” Here grantor must (1) use clear durational language, and (2) must carve out the right to reenter/retake. •Distinguishing characteristics: The estate is not automatically terminated, but it can be cut short at the grantors option, if the stated condition occurs. •Accompanying future interest: right of entry, synonymous with power of termination. oIn NY: right of reacquisition. |
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Present Estate-
Defeasible Fee (3) Fee Simple subject to executory limitaiton. |
•Creation: “To A, but if X event occurs, then to B.”
•Distinguishing characteristics: Just like fee simple determinable, but if the condition is broke, the estate is automatically forfeited in favor of someone other than grantor. •Future interest: shifting executory interest |
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Present Estate
The life estate |
Creation: This is an estate that must be measured in explicit life time terms, and NEVER in terms of years. “to A for life”
A known as life tenant. Grantor has a reversion. Life estate pur autre vie: A life estate measured by a life other than the grantees. “To A for the life of B.” Grantor has a reversion- to grantor or grantors heirs. If a life estate is sold, it becomes a life estate pur autre vie. Characteristics: The life tenants entitlements are rooted in the important doctrine of WASTE. •Life tenant is entitled to all ordinary uses and profits from the land. •The life tenant must not commit waste (cant harm future interest holders) |
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Doctrine of Waste
(applicable to life estates) |
(1) voluntary or affirmative waste- this is overt conduct that causes a drop in value (willful destruction).
Voluntary waste and natural resources- general rule- life tenant must not consume or exploit natural resources on the property, unless one of 4 exceptions applies: (PURGE) (1) Prior Use- meaning that prior to the grant, it was sued for exploitation. (2) Repair- the life tenant may consumer nature resources for reasonable repair and maintenance (3) Grant- life tenant may exploit if granted the right. (4) Exploitation- meaning land suitable only to exploit. Permissive waste (neglect): this occurs when land is allowed to fall into disrepair or life tenant fails to protect the land. •Permissive waste and the obligation to repair: Life tenant must simply maintain the premises in reasonably good repair. oPermissive waste and the obligation to pay all ordinary taxes: the life tenant is obligated to pay all ordinary taxes on the land, to the extent of income or profits from the land. If there is no income or profit, the life tenant is required to pay all ordinary taxes to the extent of premises fair rental value. Ameliorative waste: The life tenant must not engage in acts that will enhance the property’s value, unless all future interest holders are known and consent. o*NY- life tenant may make improvements unless remainder men object. Must be reasonable. •Future interest: in grantor, reversion. In third party- remainder. |
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Future interests
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oPossibility of revertor: accompanies only the fee simple determinable.
oRight of entry (aka power of termination): accompanies only the fee simply subject to condition subsequent. oReversion- future interest that arises in a grantor who transfers an estate of lesser quantum that she started with, other than a fee simple determinable or a fee simple subject to condition subsequent. |
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Future interest in transferees
(held by someone other than the grantor) |
A vested remainder- (three types): (i) indefeasibly vested remainder, (ii) vested remainder subject to complete defeasance: aka vested remainder subject to total divestment, and (iii) vested remainder subject to open.
Contingent remainder, or Executory interest (2 types): shifting and springing. |
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Future Interest
Vested remainder v. contingent remainder |
A remainder is a future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate created in the same conveyance in which the remainder is created.
•Always accompanies a preceding estate of known fixed duration. That preceding estate is usually a life estate or a term of years. •It never follows a defeasible fee. Cannot cut short or divest a prior transferee. If your present estate is a defeasible fee, it is NOT a remainder, but an executory interest if held by someone other than grantor. •Waits for preceding estate to run its natural course. Either Vested or Contingent •Vested- if both created in an ascertained person and is not subject to any condition precedent. •Contingent- if created in an unascertained person or is subject to a condition precedent. o* NY- any future interest in a transferee that is subject to condition precedent is called a remainder subject to a condition precedent. •A condition is a condition precedent when it appears before the language creating the remainder or is woven into the grant to remainderman. •If the condition is satisfied during grantors lifetime, the contingent remainder is transformed automatically into an indefeasibly vested remainder. |
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Future Interest
Contingent Remainder. Limiting doctrines. |
•Rule of destructibility: At common law, a contingent remainder was destroyed if it was still contingent at the time the preceding estate ended. Today the destructibility rule abolished, the estate instead becomes a springing executory interest.
o*NY the destructibility of contingent remainders has been abolished in NY •Rule in Shelly’s case: oAt common law, the rule would apply in only one setting- given a life estate, then to life tenants heirs. Historically, the present and future interests would merge, giving a fee simply absolute. oApplies even in the face of contrary grantor intent, because it’s a rule of law, not construction. Today it has been virtually abolished. *Abolished in NY. •Doctrine of worthier title oStill viable in most states. Applies when grantor, who is alive, tries to create a future interest in his heirs. Contingent remainder in heirs becomes void, giving grantor reversion. oRule of construction, not law. Grantors intent controls. If grantor clearly intends to create a remainder in his heirs, that intention is binding. *abolished in NY |
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Future Interest
Vested Remainder (types) |
(1) Indefeasibly vested: the holder of this remainder is certain to acquire an estate in the future, with no conditions attached.
oCommon law, the holder of the remainder’s future interest passes by will or intestacy. (2) The vested remainder subject to complete defeasance (vested remainder subject to total divestment).* In NY this remainder is called a remainder vested subject to complete defeasance. Not subject to a condition precedent; however, his right to possession could be cut short because of a condition subsequent. oCondition precedent v. contingent remainder: Comma rule- when conditional language in a transfer follows language that, taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent, and you have a vested remainder subject to complete defeasance. (person still takes). If the conditional language appears before the language creating the remainder, the condition is a condition precedent, and you have a contingent remainder. (person doesn’t take). (3) Vested remainder subject to open-Here, a remainder is vested in a GROUP of takers, at least one member of whom is qualified to take. But each class members share is subject to partial diminution because additional takers can still join in. A class is open if possible for others to end. A class is closed when its maximum membership has been set so that persons born after are shut out. The class closes whenever any member can demand possession. A child in the womb will count. |
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Future interests
executory interests. |
It is a future interest created in a transferee (a third party), which is not a remainder and which takes effect by either cutting short some interest in another person (shifting) or in the grantor or his heirs (springing).
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Future Interest
shiting executory interest |
•It always follows a defeasible fee and cuts short someone other than the grantor. Original has a fee simple subject to (B’) shifting executory interest.
•Does it violate the rule against perpetuities: is it limited to a certain number of years? |
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Future Interest
springing execuotry interest |
•When they cut short the grantor.
•Does it violate the RAP? Will you know by the end of their life whether the condition is met or not. •*NY- has abolished the difference between executory interests and contingent remainders. Instead, contingent remainders and executory interests are called remainders subject to a condition precedent. |
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Future Interests-
The 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.
Fertile octogenarian rule- presumes that a person is fertile no matter his/her age. |
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Future Interests
Technique RAP |
(A) Determine which future interest have been created, RAP applies only to: (1) contingent remainders, (2) executory interests, and (3) certain vested remainders subject to open. Does not apply to: any future interest in the grantor, indefeasibility vested remainders, or vested remainders subject to complete divestment.
(B) Identify the conditions precedent to the vesting of the suspect future interest. (C) Find a measuring life. A person alive at the date of the conveyance, and ask whether their life/death is relevant to conditions occurrence. (D) Will we know for sure if within 21 years of death of our measuring life, if our future interest holder can or cannot take. |
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Future Interest
Rules about CL RAP |
•A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP.
o Bad as to one, bad as to all. To be valid, it must be shown that the condition precedent to every class members taking will occur within the perpetuities period. If it is possible that a disposition might vest too remotely with respect to any member of the class, the entire class gift is void. •Many shifting executory interests will violate the RAP. An executory interest with no limit on the within which it must vest violates the RAP. •You strike the offending future interest clause, and see what is left. If the conveyance is no longer grammatically sound, entire clause is stricken. •A gift from one charity to another does not violate RAP. |
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Future Interest
Reform of the RAP |
•“Wait and see”/ “second look”- majority reform effort, the validity of any suspect future interest is determine don the basis of the facts as they now exist, at the end of the measuring life.
•Uniform statutory rule against perpetuities (USRAP): codifies the common law RAP and provides for an alternative 90 year vesting period. •The reforms embrace: oThe 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 the grantors intent while complying with the RAP. oThe reduction of any offensive age contingency to 21 years. |
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Future Interest
NY's RAP reform. |
oApplies the CL RAP, and rejects wait and see and cy pres, except for charitable trust and powers of appointment.
oUnder NY perpetuities reform statute, where an interest would be invalid because it is made to depend on any persons having to attain an age in excess of 21 years age contingency is reduced to 21 years. oFertile octogenarian rule is modified. NY presumes a woman over 55 cannot have a child. oNY suspension rule- applies CL RAP to restrictions on the power to sell/transfer. Thus an interest is void if it suspends the power to sell or transfer for a period longer than lives in being plus 21 years. |
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Concurrent Estates
(types) |
(1) joint tenancy
(2) tenancy by the entirety (3) tenancy in common |
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Concurrent estates
Joint tenancy |
2 or more own with the right of survivorship. A joint tenant can sell or transfer her interest during her lifetime. Can do it secretly and without knowledge/consent. One joint tenants sale severs the joint tenancy as to the sellers interest because it disrupts 4 entities. Thus, buyer is a tenant in common.
•In equity, a joint tenants mere act of entering into a contract for the sale of her share will sever the joint tenancy as to k parties interest. This is because of the doctrine of equitable conversion which provides that equity regards as done that which ought to be done” •Sever and partition: (i) by voluntary agreement- peaceful way to terminate (ii) by partition in kind- court action for physical division, if in the best interests of all (iii) by forced sale- court action, if in the best interest of all, property sold and proceeds split proportionately. •Severance and mortgage: One joint tenants execution of a mortgage or a lien on his or her share will sever the joint tenancy as to that now encumbered share only in minority of states under title theory of mortgages. Majority of states will follow lien theory of mortgage, on his or her interest will not sever the joint tenancy. *NY follows lien theory. |
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Concurrent estates
Tenancy by the entiety |
marital interest between married partners with right of survivorship.
Only between married partners who share right of survivorship. In those states (including NY) that recognize tenancy by the entirety, it arises presumptively in any conveyance to married parties unless stated otherwise. It is a very protected form of co-ownership. Cant touch this. Creditors of only 1 spouse cant touch the tenancy. •*NY- one spouse may mortgage his interest and his creditors may enforce against that interest, but only as to the debtors spouse’s share. Further, the non-debtor spouses rights, including the right of survivorship, must not be compromised. Unilateral conveyance: neither tenant acting alone can defeat the right to survivorship by transferring to a third party. |
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Concurrent estates
Tenancy in common |
Each co tenant owns an individual part and each has a right to possess the whole. If you try to exclude one- its an unlawful ouster. Each interest is divisible, descendible, and alienable. There is no survivorship rights between tenants in common. The presumption favors tenancy in common.
Absent ouster, a co-tenant in exclusive possession is not liable to the other co-tenants for rent. However, a co-tenant who leases all or part of the premises to a third party must account to his co-tenants, providing them with their fair share of the rental income. Cant get title through adverse possession unless he ousted the other co-tenants, and he was in exclusive possession for statutory period. (not hostility b/c no ouster). NY- co-tenant may acquire title by adverse possession if in exclusive possession for 20 continuous years. Theory- implied ouster. Carrying costs: each co-tenant is responsible for his/her fair share of carrying costs (taxes and mortgage interest payments) based upon his undivided share. Repairs: the repairing co-tenant enjoys the right to contribution for necessary and reasonable repairs, provided that she has told the others of the need. (must contribute according to share). Improvements: during life of the co-tenancy, there is no right to contribution for improvements. However, at partition, the improving co-tenant is entitled to a credit equal to any increase in value caused by her efforts, also bears full liability for any drop in value caused by her efforts. Waste: a co-tenant must not commit waste. Partition: a joint tenant or tenant in common has a right to bring an action for partition. |
