Non Freehold Estates

What will automatically terminate a FSA? 

Any restraint on the transferability makes it void. Can put conditions, but no restraints on transfers

What is the right of first refulsal?

What is a Fee Tail?

It is a way to keep the estate in the family.  It has basically been eliminated, so only apply it if the question asks to apply the COMMON LAW rule.

Ex: To A and the heirs of his body.

To A and his bodily heirs.

(Both are now FSA in modern law) 

Life Estate Pur Autre Vie

It's a life estate measured by the life of a third party.

Ex: To Tarzan for the life of Jane.

What should be remembered about Life Estates pur Autre Vie?

There is a common law and Modern law view for what happens when the life tenant dies before the measuring life.

What happens when there is a life estate pur autre vie and the life tenant dies first?

Common Law: The estate would be declared vacant and anyone can take the property until measuring life dies.

Modern Law: The estate passes to heirs of life tenant until measuring life dies.

What happens if you sell your life estate, what interests are created?

The buyer will receive a life estate pur autrie vie, based on the measuring life of the seller.

If the buyer dies, then the estate will pass to his heirs until the life of the seller is over.

What is a big difference between life estates and FSA?

You can place a restraint on a life estate that will terminate the life estate if the tenant attempts to sell it.  However, no restraints are allowed on any FSA.

What are the three types of waste?

1. Voluntary Waste- affirmatively going beyond maintaining, that causes harm on premises.

2. Permissive Waste- Failure to maintain premises.

3. Ameliorative Waste- life tenant alters property substantially, but increases value of land.

Open Mines Doctrine

Depletion of natural resources constitutes waste unless consumption of such resources constitutes the normal use of the land, as in the case of a life estate in a coal mine or a granite quarry.

What are the three things a tenant must do to avoid liability for permissive waste?

1. Repairs- make ordinary repairs

2. Taxes- Must pay all taxes

3. Mortgage Debt- life tenant must pay interest on mortgage debt.

What are the life tenant's repair obligations?

1. It's limited to the amount of rents and profits received from land.

2. If there are no rents or profits and the tenant lives on land, must use reasonable rental value of land.

3. If no rents or profits, and not living on land, NO repair obligation

How much taxes is the life tenant responsible for?

What happens if the life tenant doesn't pay taxes?

A tax sale will eliminate the future interest. So the holder of the future interest will want to pay the taxes to keep their share.

Who is responsible for paying the mortgage debt on the property in a life estate?

Does the holder of an executory interest have any rights to prevent the land from waste?

No, executory interests do not have standing to sue for waste

Who is responsible for purchasing the insurance on the property during the life estate?

No one, the life tenant does not have to get insurance, however, they can if they want to b/c they have an insurable interest.

What is Ameliorative waste?

What is the general rule for ameliorative waste?

If "changed conditions" have made the property "relatively worthless", the life tenant can do what they want.

Seisin

Future Interest

The interest exists NOW,

But is not possessory until sometime in the future.

**Don't say the interest is in the future, it's now.

What are the future interests retained by the Grantor?

1. Reversion

2. Possibility of Reverter

3. Right of Entry

What are the future interests given to the grantee?

1. Remainder; or

2. Executory interest

When is there a reversion in the Grantor?

General Rule: When the grantor conveys less than the full durational estate.

Ex: If Grantor has a FSA and grants a life estate.

A has a reversion for life

B has a life estate measured by his life and A's life.

O has a reversion in FSA

If B dies, the property will go back to A for A's life b/c A granted less than full durational amount.

What is the Rule of Perpituities?

The interest must vest in someone, if at all, not later than 21 years after the death of some life in being at the creation of the interest.

What is a reversion for life?

What is a Fee Simple Determinable?

When can the grantor retain a possiblity of reverter?

ONLY in Fee Simple Determinables

What are the magic words for FSD?

1. For so long as

2. While

3. During

4. Until

What is a Fee Simple on Condition Subsequent?

It is a grant in land that will terminate automatically when a condition is broken. Different from FSD b/c this also has language that allows the Grantor the right to retake the property when the condition happens.  It doesn't happen automatically, just if Grantor uses his "right of entry"

Magic words for FSCS?

Provided, however

But, if

On condition that

** Magic words must be followed by language that reserves the right to re enter by grantor.

What is required for a FSCS?

What is a remainder? 

It is a future interest in a third party grantee that comes "naturally and immediately" on the termination of the proceeding estate.

What are the two types of remainders?

Either vested or contingent

What is a contingent remainder?

It's a future interest in an estate that only becomes possessory if a condition is satisfied.  If not, the property will revert back to whoever is entitled.

O conveys blackacre to A for life, then to B and his heirs if B survives A.

What do the parties have?

A has a life estate

B has a contingent remainder in FSA

O has a reversion if condition isn't satisfied.

O conveys Blackacre to A for life, then to B and his heirs when B reaches the age 21.  At time of conveyance B is 15.

What are the interests in the parties?

A has a life estate

B has a contingent remainder

O has a possibility of reversion

If B turns 21 and A is alive, B's interest becomes a vested remainder.

If A dies and B isn't 21 yet, then O will hold the property subject to an executory interest, and B holds the executory interest.

What type of remainder do you have under a class gift?

To B and C, the children of A.

Is this a class gift?

No, class gifts are to unamed persons and here the people are named.

Rule of Convenience

It's a Rule of Construction, not a rule of law.  When any class member is entitled to a distribution, the class closes.

This is usually when the testator dies, or the measuring life.

What happens when a member of the class pre deceases the testator?

The member's gift lapses and the member will get nothing. (unless there is a pre lapse statute.)

What is an executory interest?

It cuts short the estate that comes before it.

What is the difference between contingent remainders and executory interests?

Contingent remainders will NEVER come after a FSA, only executory interests can cut short FSA.  If a future interest is not a remainder it must be a executory interest

O conveys Blackacre to A for life, then to B and his heirs; but if at B's death B is not survived by issue, then to C and her heirs.

What are the party's rights?

O- Nothing

A- life estate

B- Vested remainder FS subject to an executory interest

C- Executory interest

What are other names for an Vested remainder subject to an executory interest?

What are key words that signal executory interests?

But If, and Then to

Does the holder of a remainder subject to divestment have standing to sue for waste?

Yes

What are the defeasible fees?

1. Fee Simple Determinable

2. Fee Simple Subject to Contition Subsequent

3. Fee Simple Subject to Executory Interest

What is the KEY to know for Fee Simple Determinable?

The Grantor will alway possess a possibility of reverter

Ex: To A, for so long as no liquor on premises.

What is the Key to know for FSCS?

It is similar to a FSD, however, instead of reverting back to the grantor, the grantor takes a "right to retake" when the condition is breached. Grantor must expressly state his "right of re-entry."

*"Right of Entry"

ex: To A, provided that if liquor is ever consumed on the premises then O and O's heirs have the right to re-enter and retake the premise.

What is the key for Fee Simple Subject to Executory Interest?

The condition will always come after the punctuation and it will cut short the estate that comes before it.

What does the Rule of Perpituities apply to?

Always applies to Executory Interests, contingent remainders, and vested remainders subject to Open

 How does the Rule of Perpetuities apply to Right of first refusal?

Must happen within 21 years

When can you violate the Rule of Perpetuities?

If both parties are charities

What is the key to not violating the Rule of Perp. when creating a class gift?

What is the Fertile Octagonarian Rule

What happens in a class gift when one party's interest is void?

All the party's interests become void.