Real Property--Estates In Land

Front 1

What is real property?

Back 1

All land and everything attached to the land with the intent that it be a part of the land--i.e., the land and its fixtures.

Front 2

Easement--Definition

Back 2

right to use land

Front 3

Restrictive Covenant--Definition

Back 3

restricts someone else's use of their land

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Devisable--Definition

Back 4

Able to pass by will

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Descendible--Definition

Back 5

Able to pass by intestate succession (no will)

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Alienable--Definition

Back 6

Able to be transferred inter vivos (i.e., during holder's lifetime)

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Fee Simple Absolute--Definition

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Present possessory estate of indefinite or potentially infinite duration (runs forever).

Front 8

Absolute Restraint on Alienation--Definition

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Absolute ban on power to sell or transfer estate not linked to any reasonable time-limited purpose.

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Consequence of an absolute (direct) restraint on alienation on a FSA

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Restraint restrictions are void and ignored as if it were not put in.

Front 10

Restraint vs. Condition

Back 10

Restraints on alienation are void, BUT conditions on use of estate OK (create defeasible fees)

Front 11

Defeasible Fee--Definition (Informal)

Back 11

Fee simple estate that can be terminated upon the happening of a stated event (i.e., of uncertain or potentially infinite duration).

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Three Types of Defeasible Fees

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(1) Fee simple determinable

(2) Fee simple subject to condition subsequent

(3) Fee simple subject to executory limitation

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Fee Simple Determinable--Definition

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Estate that terminates upon happening of stated event and automatically reverts to grantor.

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Fee Simple Determinable--Language to Create

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Created by clear durational language (words limiting duration of estate), such as "for so long as," "while," "during," or "until."

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Fee Simple Determinable--Accompanying FI

Back 15

grantor automatically retains possibility of reverter

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Fee Simple Subject to Condition Subsequent--Definition

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Estate in which grantor reserves right to terminate estate upon happening of stated event

N.B., estate does not automatically terminate, grantor must take some action.

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Fee Simple Subject to Condition Subsequent--Language to Create

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Created by use of conditional words, such as "provided however," "upon condition that," and "but if."

N.B., grantor must expressly reserve right to terminate estate, and failure to do so results in condition being ignored.

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Fee Simple Subject to Condition Subsequent--Accompanying FI

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right of entry (or power of termination).

N.B., does not arise automatically but must be expressly reserved.

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Fee Simple Subject to Executory Limitation--Definition

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Estate that terminates upon happening of stated event, and then passes to third party

*rather than reverting to grantor or giving grantor right to terminate.

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Fee Simple Subject to Executory Limitation--Language to Create

Back 20

Created by either durational (FSD) or conditional (FSSCS) language.

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Fee Simple Subject to Executory Limitation--Accompanying FI

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Executory Interest

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Ability to Transfer (sell, devise, descend, etc.) Future Interests--POR, ROE, EI:

(1) Michigan

(2) MBE

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(1) Michigan--ALL future interests are freely transferable.

(2) MBE:

POR--freely transferable

ROE--freely devisable and descendible, but CANNOT transfer inter vivos (not fully alienable)

EI--?

Front 23

Life Estate--Definition

Back 23

Estate measured by life or lives of one or more persons, and never in time.

Front 24

Life Estate Pur Autre Vie--Definition

Back 24

Estate measured by life other than grantee's

(e.g., "to A for the life of B").

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Life Estate--Accompanying FI

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(1) held by grantor = reversion

(2) held by third party = remainder

Front 26

Life Estate--Ability to Transfer

Back 26

Freely transferable (i.e., devisable, descendable, and alienable)

Front 27

What happens if the life tenant in a life estate dies before the measuring life dies?

Back 27

Majority Rule: Life estate passes to estate of life tenant until measuring life dies.

Front 28

Are forfeiture restrictions on the transfer of life estates allowed?

Back 28

Yes. Such restrictions are valid and do NOT violate rule prohibiting restraints on alienation.

Front 29

Can life estates be made conditional in same manner as fee estates (FSD, FSSCS, FSSEL)?

Back 29

Yes. Although usually indefeasible (i.e., ends only when life tenant dies), possible to create life estates that are defeasible in same ways that fee estates can be defeasible. Exact same operation.

Front 30

Rights and Duties of Life Tenant

(1) Rights:

(2) Duties:

Back 30

(1) entitled to any ordinary uses and profits of land.

(2) must NOT commit waste on estate.

Front 31

Life tenant's duty to not commit waste

Back 31

Cannot do anything more OR less than merely maintain estate.

Front 32

"Maintain" Definition

(re: life tenant duty)

Back 32

means continuing ordinary use of land in present condition

Anything more or less than maintaining = waste.

Front 33

Liability for "Waste"

Back 33

If life tenant commits waste, he is liable to holder of future interest

Front 34

Three Types of Waste

Back 34

(1) Voluntary (affirmative)

(2) Permissive

(3) Ameliorative

Front 35

Voluntary Waste--Definition

Back 35

Any affirmative action beyond right of maintenance causing harm to premises that decreases its value.

Front 36

Voluntary Waste--Natural Resources (Rule)

Back 36

Life tenant must not consume or exploit natural resources (e.g., timber, oil, minerals) on property, unless exception applies.

N.B., sale of crops from land NOT considered waste.

Front 37

Nat'l Res. Rule--Exceptions (Mnemonic)

Back 37

PURGE

Front 38

PURGE Mnemonic

Back 38

PU: Prior Use

R: Reasonable Repairs

G: Grantor Permission

E: Exploitation

Front 39

Nat'l Res. Rule--Prior Use Exception

Back 39

Open Mines Doctrine: If prior use was to deplete nat'l resources, life tenant may continue prior use--BUT limited to mines already open.

Front 40

Nat'l Res. Rule--Reasonable Repairs Exception

Back 40

Life tenant may exploit nat'l resources when necessary for repair or maintenance of land.

Front 41

Nat'l Res. Rule--Grantor Permission Exception

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Life tenant may exploit nat'l resources when expressly or impliedly permitted by grantor.

Front 42

Nat'l Res. Rule--Exploitation Exception

Back 42

Life tenant may exploit nat'l resources when land only suitable for such use.

Front 43

Permissive Waste

Back 43

Occurs where life tenant:

(1) fails to maintain and land allowed to fall into disrepair; or

(2) fails to reasonably protect land.

Front 44

Duty to Avoid Permissive Waste

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Life tenant obligated to:

(1) preserve land and structures in reasonable state of repair, but only responsible for ordinary repairs, not replacement;

(2) pay interest on mortgages (not principal);

(3) pay ordinary taxes on land; and

(4) pay special assessments for public improvements of short duration*.

*If long duration, apportioned between life tenant and future interest holder.

Front 45

Limitation on Life Tenant's Liability

(re: Duty to Avoid Permissive Waste)

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Liability to FI holder limited to:

(1) amount of income generated from land; or

(2) if LT personally using property [or no income], reasonable rental value of land.

Front 46

Is life tenant obligated to insure property?

Back 46

No.

Front 47

Ameliorative Waste--Definition

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Special type of voluntary waste that occurs where affirmative act substantially alters property, but increases its value.

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Ameliorative Waste--General Rule

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LT cannot do anything to enhance property's value UNLESS all future interest holders (1) are known and (2) consent.

Exception: changed conditions

Front 49

Ameliorative Waste--Changed Conditions Exception

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LT may alter or demolish existing buildings without liability if changed conditions make property relatively worthless in current state.

Front 50

Interests Subject to Rule Against Perpetuities

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(1) Vested remainders subject to open (as long as class remains open)

(2) Contingent remainders

(3) Executory interests

(4) Options to purchase (not attached to leasehold)

(5) Rights of first refusal

(6) Powers of appointment

Front 51

Vested Remainder--Definition

Back 51

Remainder that is:

(1) created in existing & ascertained person,

(2) not subject to condition precedent.

Front 52

Three Types of Vested Remainders

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(1) indefeasibly vested remainder

(2) vested remainder subject to open (class gifts)

(3) vested remainder subject to complete divestment

Front 53

Indefeasibly Vested Remainder--Definition

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Vested remainder not subject to divestment or diminution.

Front 54

Vested Remainder Subject to Open--Definition

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Vested remainder created in class of persons that is certain to become possessory, but is subject to diminution.

E.g., by birth of additional persons who will share in remainder as class

Front 55

Class Gift--Definition

Back 55

Gift to group of unnamed persons having common characteristics

Front 56

Class Gifts--Three Main Rules

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(1) Members of class who predecease T are eliminated and do not recover--gift lapses.

(2) Class established when creating instrument becomes effective (e.g., will executed), and class remains open to allow future class members.

(3) Rule of Convenience: Class closes when any one of class entitled to a distribution (N.B., rule of construction, not law)

Front 57

Executory Interest--Definition

Back 57

FI in third party that operates to cut short preceding estate

Front 58

Executory Interest--Two Types

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(1) shifting EI

(2) springing EI

Front 59

Shifting Executory Interest--Definition

Back 59

takes title from one grantee and gives to another grantee.

Front 60

Springing Executory Interest--Definition

Back 60

takes title from grantor and gives to grantee

Front 61

Rule Against Perpetuities--The Rule

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An interest in property is void if there is any possibility that it might vest, if at all, more than 21 years after a life in being.

Front 62

When does an interest "vest"?

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(1) when interest becomes possessory; OR

(2) when absolutely certain that FI holder can take estate (but not necessarily will).

Front 63

To what estates does RAP apply?

Back 63

(1) contingent remainders

(2) executory interests

(3) vested remainders subject to open

Front 64

Who can sue a life tenant for waste?

Back 64

(1) remainderman = yes

(1) executory interest holder = no

Front 65

Rule Against Perpetuities: Charity Exception

Back 65

Charity-to-charity exception

RAP does not apply to any disposition from one charity to another.

Front 66

Concurrent Estates (Co-Ownership)--Three Types of Tenancies

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(1) joint tenancy

(2) tenancy in common

(3) tenancy by the entirety

Front 67

Concurrent Estates--Additional Type of Tenancy in MI

Back 67

joint tenancy with indestructible survivorship

Front 68

Joint Tenancy--Definition

Back 68

ownership by two or more persons with equal, undivided interests in whole and rights of survivorship

Front 69

Creation of Joint Tenancy

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(1) Requires "four unities"; and

(2) Grant must refer to as "joint tenancy" and must expressly state right of survivorship*

[*Otherwise, courts will construe as tenancy in common]

Front 70

"Four Unities" Mnemonic

Back 70

T-TIP

Front 71

Creation of Joint Tenancy: T-TIP

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T: Time

T: Title

I: Interest

P: Possession

Front 72

Joint Tenancy--Two Characteristics

Back 72

(1) right of survivorship

(2) right to partition

Front 73

Right of Survivorship

Back 73

When one JT dies, share of property automatically transferred to surviving tenants (i.e., not inherited).

Front 74

Unity of "Time"

Back 74

All interests must have vested at same time

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Unity of "Title"

Back 75

Grant to all must be by same instrument (e.g., will or deed)

Front 76

Unity of "Interest"

Back 76

All must take same kind and same amount of interest

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Unity of "Possession"

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All must have equal rights of possession

Front 78

Two Ways to Destroy Joint Tenancy

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(1) partition--voluntary destruction

(2) severance--involuntary destruction (when any one of four unities disturbed)

Front 79

Four Ways to Sever Joint Tenancy

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(1) conveyance by one JT

(2) mortgage in title theory (minority) state

(3) contract of sale

(4) creditor's sale

Front 80

Tenancy in Common--Definition

Back 80

ownership by two or more persons with undivided interests in whole (equal or unequal)

Front 81

Tenancy in Common: Creation

Back 81

only requires unity of possession

*default (presumed) tenancy