Present, Future and Concurrent estates

Fee simple absolute - language to create

"To A and his heirs" or "To A"

Fee simple absolute - duration

Absolute ownership of potentially infinite duration

Fee simple absolute - transferability

Devisable, descendible, alienable

Fee simple absolute - future interest

None

Fee tail - language to create

"To A and the heirs of his body"

Fee tail - duration

Lasts only as long as there are lineal blood descendants of grantee

Fee tail - transferability

Passes automatically to grantee's lineal descendants

Fee tail - future interest

Reversion (grantor) or remainder (grantee)

Fee simple determinable - language to create

"To A so long as...", "To A until..." "To A while…" (clear durational language)

Fee simple determinable - duration

Potentially infinite, so long as event does not occur

Fee simple determinable - transferability

Alienable, devisable, descendible, subject to condition

Fee simple determinable - future interest

Possibility of reverter (always held by grantor, automatic)

Fee simple subject to condition subsequent - language to create

"To A, but if X event happens, grantor reserves the right to reenter and retake" (Grantor must carve out right of reentry)

Fee simple subject to condition subsequent - duration

Potentially infinite, so long as event does not occur, and, thereafter, until holder of the right of entry timely exercises the power of termination

Fee simple subject to condition subsequent - transferability

Alienable, devisable, descendible, subject to condition

Fee simple subject to condition subsequent - future interest

Right of entry/power of termination (grantor must exercise)

Fee simple subject to an executory limitation - language to create

"To A, but if X event occurs, then to B"

Fee simple subject to an executory limitation - duration

Potentially infinite, so long as stated contingency does not occur

Fee simple subject to an executory limitation - transferability

Alienable, devisable, descendible, subject to condition

Fee simple subject to an executory limitation - future interest

Executory interest (3d party, automatic)

Life estate - language to create

"To A for life" or "To A for life of B"

Life estate - duration

Measured by life of transferee or pur autre vie

Life estate - transferability

Alienable, devisable and descendible if pur autre vie and measuring life still alive

Life estate - future interest

Reversion (grantor) or remainder (grantee)

Sinead O'Connor rule of property

A living person has no heirs

Mick Jagger rule of property

You can't convey more than you own

Frank Sinatra Didn't?

Prefer Orville Redenbacher

Bobby Brown Estate

Fee simple subject to condition subsequent - grantor has prerogative to terminate estate if condition occurs but may look to the other way

Words of mere desire, hope, or intention

Insufficient to create a defeasible fee

Absolute restraints on alienation

Void

Life tenant is entitled to

all ordinary uses/profits from the land

Life tenant must not

commit waste

Types of waste (3)

Voluntary/affirmative, permissive/neglect, ameliorative

Voluntary waste - exceptions (4)

PURGE: Prior Use, Reasonable repairs, Grant, Exploitation

Obligations to avoid permissive waste (2)

Maintain property in reasonably good repair, pay all ordinary taxes to extent of income/profits - if no income/profit, must pay all ordinary taxes to the extent of fair rental value

Future interests in transferees (3)

Vested remainder, contingent remainder, executory interest

Remainderman cannot/never

Cut short or divest a prior transferee/follows a defeasible fee

Vested remainder (2)

Created in an ascertained person, is not subject to any condition precedent

Contingent remainder - creation (2)

Created in as yet unborn or unascertained persons/subject to a condition precedent

Rule of destructibility of contingent remainders - common law

Contingent remainder was destroyed if it was still contingent when the preceding estate ended

Rule of destructibility of contingent remainders - modern

Abolished

Rule in Shelley's Case - common law - "To A, then to A's heirs" if A is alive

A receives a fee simple absolute. Applied despite contrary grantor intent.

Rule in Shelley's Case - modern - "To A, then to A's heirs" if A is alive

A: Life estate; A's unborn heirs: Contingent remainder; O: reversion

Doctrine of worthier title - common law

Contingent remainder in O's heirs is void (but grantor's intent controls)

Doctrine of worthier title - modern

Contingent remainder in O's heirs is void (but grantor's intent controls)

Vested remainders - 3 types

Indefeasibly vested remainder, vested remainder subject to complete defeasance, vested remainder subject to open

Indefeasibly vested remainder

No conditions attached

Vested remainder subject to complete defeasance (total divestment)

Remainderman's right to possession could be cut short because of a condition subsequent

Vested remainder is subject to open

Remainder is vested in a class, at least one member is qualified to take, but additional takers can still join the class

Rule of convenience

A class closes when any member can demand possession

Womb rule

A child in the womb will share in a class gift

Remainderman is like

Tom Hanks

Executory interest is like

Dr. Evil

Shifting executory interest cuts short

Someone other than the grantor

Springing executory interest cuts short

The Grantor

Rule against perpetuities - approach

Determine which future interests have been created, identify the conditions precedent to vesting of the suspect future interest, find a measuring life, ask if we will know, with certainty, within 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take?

Interests subject to the rule against perpetuities (4)

Contingent remainders, executory interests, vested remainders subject to open, rights of first refusal

Interests NOT subject to the rule against perpetuities (3)

Any future interest in O, indefeasibly vested remainders, vested remainders subject to complete defeasance

Key interests that violate the common law rule against perpetuities (2)

A gift to an open class that is conditioned on the members surviving to an age beyond 21, an executory interest with no limit on the time within which it must vest

Charity-to-charity exception

Exempt from rule against perpetuities

"Wait and see" or "second look" doctrine

Majority reform effort; validity of suspect future interest determined on the measure of the facts as they exist at the end of the measuring life

USRAP alternative

90-year vesting period

Cy pres doctrine (modern approach to rule against perpetuities)

"as near as possible" - a court may reform a disposition to most closely match grantor's intent while still complying with the rule against perpetuities

Age contingency reduction (modern approach to rule against perpetuities)

Any offensive age contingency is reduced to 21 years

Joint tenancy - traits (2)

Two or more owners, right to survivorship

Joint tenancy - creation (4, 1)

T-TIP: same TIME, same TITLE, identical INTERESTS, rights to POSSESS the whole; grantor must clearly express the right of survivorship

Tenancy by the entirety - traits (2)

Marital interest with right of survivorship

Tenancy in common - traits (2)

Two or more owners, NO right to survivorship

Straw

Middleman to aid in creation of joint tenancy

Joint tenancy - severance (3)

SPAM: SALE, PARTITION AND MERGER

Joint tenancy - severance and sale (2 key points)

A joint tenant may sell or transfer interest during lifetime, even secretly; mere act of entering into a contract will sever tenancy as to that share

What is the meaning/effect of equitable conversion?

Equity regards as done that which ought to be done - applies during escrow period. Buyer considered owner, so joint tenancy severed and/or buyer liable for damage to property

Partition (3)

Voluntary agreement, partition in kind, forced sale

Joint tenancy - severance - mortgage - title theory

Minority view: One joint tenant's execution of a mortgage/lien on his or her share will sever the joint tenancy as to that share

Joint tenancy - severance - mortgage - lien theory

Majority view - Joint tenant's execution of mortgage on his or her interest will NOT sever the joint tenancy

Tenancy by the entirety - creation

Default for married partners, if a state recognizes TIE

Tenancy by the entirety - "can't touch this" (2)

Creditors of only one spouse can't touch TIE, and neither tenant alone can defeat the right of survivorship by unilateral conveyance

Rights and duties of cotenants (4)

Possession of the whole; share of rent from 3d parties, carrying costs, repairs; no waste; action for partition

NOT rights or duties of cotenants (3)

Rent from co-tenants in exclusive possession; adverse possession; improvements (but credit/liability at partition)

Joint tenancy - effect of severance

A tenancy in common between any remaining joint tenants and owner of severed share

Tenancy by the entirety - termination (4)

Death of a spouse, divorce, mutual agreement, execution by a joint creditor of both spouses

Tenancy by the entirety - mortgage requirement

Both spouses must join

Why does a deed offering "A and his heirs" the right of first refusal to buy property when offered for sale?

Because it could vest more than 21 years after the death of a life in being at the time of the grant

Who must pay the taxes on a property?

Holder of present possessory interest

What if taxes aren't paid on a property?

Property will be sold at a tax sale and future interest holders will lose their interests