Wa Bar Property - Estates

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Estates

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Fee simple, Fee tail, Fee Simple Defeasible (determinable, subject to a condition subsequent, Subject to an executory interest), Life Estate

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Fee Simple

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Fee Simple Absolute (To A)
1. Absolute, descendible, of potentially infinite duration. No limit on transfer.
2. No Future interest

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Fee Tail

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Fee Tail (To A and the heirs of his body) (probably construed as fee simple absolute)
1. Ownership automatically passing along the lineal blood descendants of the grantee.
2. Future Interest: Reversion (Grantee) Remainder (Third Party)

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Fee Simple Defeasible

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Must use clear language indicating duration, words of mere desire, hope or intention are insufficient to create a defeasible fee)
Fee Simple Determinable (To A so long as…” or “until” or “To A while.”
a. Ownership subject to the condition, upon which it reverts back to the grantor automatically. Is transferable
b. Future interest: Possibility of Reverter (grantor).
Fee Simple Subject to Condition Subsequent ("To A, but if ___ grantor reserves the right to reenter.”)
a. Ownership as long as the condition is not breached and the holder of the right of reentry does not timely (60 years = too long) exercise the power of termination.
b. Future Interest: Right of entry, Power of Termination (Grantor)
Fee Simple Subject to an Executory Interest (To A, but if X occurs, then to B)
a. Same as Determinable, but goes to third party instead of grantor when condition occurs
b. Future Interest: Executory Interest (Third Party)

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Life Estate

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Life Estate (To A for life,” Or “To A for the life of B”)
a. Ownership that is measured in explicit lifetime terms and terminates at the end of the measuring lifetimes(s). Life tenant is entitled to all ordinary uses and profits from the land.
b. Future Interest: Reversion (Grantor), Remainder (Third Party)

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Waste (life estate)

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Life tenant must not commit waste, or harm parties with a non-possessory or future interest. Remedies include damages (treble if intentional) and an injunction.
i. Intentional: Overt Conduct that causes a decrease in value, i.e. intentionally damaging the land or exploiting resources unlawfully.
ii. Permissive: Land is allowed to fall into disrepair or life tenant fails to reasonably protect it, i.e. keeping out the weather, or failing to pay taxes.
Exceptions
i. Resources: Tenant can use resources of the land if the land’s prior use, or only use, is for the exploitation of natural resources
ii. Grant: Tenants was expressly granted the right to commit waste.
iii. Maintenance: Tenant can use natural resources to maintain the premises or make reasonable repairs.
iv. Timber: Tennant can use timber if that is the land’s only use unless agreed otherwise.
v. Open Mines: If mining was conducted on the land before the life estate, the tenant may continue mining mines already open but not open new ones.

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Remainder

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Remainder: Future interested 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.
Creation
- Must be created at the same time, and by the same instrument as the prior estate.
- Always accompany a prior estate of known fixed duration (usually life estate)
- Never cut short a prior estate
- Never follow a built in gap.
Types
- Contingent Remainder: Remainder created in an unascertained person or is subject to a condition precedent, or both.
- Vested Remainder: Remainder that is both created in an ascertained person and is not subject to any condition precedent.

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Executory interest

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Any other interest that does not meet the rules for remainders
i. Shifting Executory Interest: Always follows a defeasible fee and cuts short someone other than the grantor.
ii. Springing Executory Interest: Cuts short the interest of the grantor.

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Shelley's Case

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Rule Against Remainder’s in Grantee’s Heirs). Situation occurs when an estate given to A and in the same instrument a remainder was limited to the “heirs” or to the “heirs of the body” of A. The rule converts what would otherwise be a contingent remainder in the heirs into a remainder in the ancestor. (This rule was abolished prospectively in 1995.)

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Doctrine of worthier title

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(The Rule Against Remainder’s in Grantor’s Heirs). Under this doctrine, a remainder limited to the grantor’s heirs is invalid, and the grantor retains a reversion in the property. Abolished prospectively in 1995.

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Rule Against Perpetuities

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Any future interest covered by the RAP is 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.
Applies only to:
- Contingent remainders
- Executory interests
- Class gifts
- Options to buy land
- Right of first refusal
Does not apply to:
- Vested Remainders
- Any future interest created in the grantor
Calculating RAP (Careful, many shifting executor interests violate the RAP)
- Identify the condition(s) precedent and measuring life. Will the future interest be determine with certainty, within 21 years of the death of our measuring life? If not, strike the offending interest and determine what interests remain.
Charity to Charity Rule: A gift from one charity to another does not violate the RAP
Washington’s wait and see rule for trusts
- If the future interest is a beneficial interest created by a trust, we test its validity by seeing if it actually vests or fails within 150 years from the date it was created.

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Restraints on alienation

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Disabling (void on any estate)
Forfeiture (void on anything less than a fee simple)
Promissory (void on anything less than a fee simple)
Right of first refusal must be reasonable (duty to respond w/in rsnbl time & pay fair market price)
Discriminatory restraints will be struck down (watch for churches)

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Tenancy in Common

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Concurrent estate with no right of survivorship; each owns an individual part & has a right to possess the whole; DD&A; presumption in favor

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JT WROS

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Tenancy where their share passes automatically to the surviving joint tenants. Ownership can be transferred but is not divisible or descendible.

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Creation of a J/T WROS

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Creation (PITT)
Four Unities: Joint tenants must take ownership:
- P: with identical rights to possession
- I: with identical interests
- T: at the same time
- T: by the same title (same instrument)

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Severance of J/T WROS

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Severance (SPAM)
o Sale (can be w/o co-tenant's knowledge or consent, disrupts unities & converts to tenancy in common; converts to CP between spouses; three party bar favorite)
o Partition (in-kind i.e. court boundary or by sale i.e. sheriff sells & divides proceeds; includes accounting, court considers rents collected & repairs made; owelty = adjusting boundary line to account for money owed)
o NOT Mortgage

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Rights Between Co-Tenants

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o Possession (each entitled to possess & enjoy the whole; exclusion = wrongful ouster, entitles to fair rental value of excluded portion; constructive ouster if property too small or exclusive divorcing occupancy)
o Rent from Third Parties
o Carrying Costs (taxes, mortgage)
o Reasonable & Necessary Repairs
o Waste
o NO Improvements (increased value credit at partition)
o NO Rent from Exclusive Possessor Absent Ouster
o NO Adverse Possession Absent Ouster
o Fiduciary Duty (fire sale 1/2 pmt re-creates)