Property- MBE - Estates in Land
Terms
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copy deck
- What are 3 types of freehold estates?
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1. Fee Simple (FS)- including defeasible fees
2. Life Estate (LE)
3. Fee Tail (modern presumption = FSA, UNLESS Bar Exam Q. asks you to apply common law rule) - FSA
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potentiall infinite DURATION
MUST be fully ALIENABLE - Hypo #1: John will shte farm in upstate NY to Yoko, but provides that if Yoko tries to sell the farm, it goes to Shaun.
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Yoko: FSA
Shaun: Nothing
GENERAL RULE: ANY attempt to put a direct on alienation is VOID - thus ignore the restriction
CONDITIONS however, may be imposed on the exercise of a FS - Hypo #2: John will shte farm in upstate NY to Yoko, but provided that if Yoko allows Paul onto the property, then the farm goes to Shaun.
- OK- b/c no language of condition on use of property.
- Hypo #3: John wills the farm to Yoko. What estate does Yoko receive?
- FSA
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Present Estates -
4 Broad Types -
Answer Note/Hint
Present Estates -
4 Broad Types 1) Fee Simple Absolute
2) Defeasible Fees (3 Kinds)
3) Fee Tail
4) Life Estate - Fee Simple Absolute
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• “To A†= enough
• = absolute ownership of potentially infinite duration
• Divisible (can leave it in your will), Descendible & alienable
•Future Interest? = A’s heirs have NOTHING (only A has ownership) - Fee Tail
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• “To A & the heirs of his bodyâ€
• Historically would pass directly to lineal blood descendants NO MATTER WHAT
• About preserving dynasties
• If try to create it today it's made into a Fee simple Absolute -
Defeasible Fees -
Fee Simple Determinable -
• “To a so long asâ€, “To A duringâ€
• = looking for clear durational language
• Forefeiture is automatic if stated condition is violated - very harsh
• = divisible, descendible & alienable
• BUT always subject to the condition!!!!!! Condition is carried w/ it.
• Future interest = possibility of reverter (FSDPOR) -
Deafeasible Fees -
Fee Simple Subject to Condition Subsequent -
• “To A but if X occurs, grantor reserves the right to reenter & retakeâ€
• This estate is NOT automatically terminated BUT can be cut short at the grantors option if the stated condition occurs
• Accompanying future interest = RT of reentry (syn w/ power of termination) -
Defeasible Fees -
Fee Simple Subject to Executory Limitation -
• “To A but if X occurs then to Bâ€
• Potentially infinite, so long as stated contingency does NOT occur
• Alienable, devisable, descendible all subject to the condition
• = if condition broken estate is AUTOMATICALLY forfeited in favor of someone other than grantor
• Future Interest = Executory Interest held by 3rd P (who = beneficiary)
• Words of mere desire/hope/intent = NOT enough (insufficient to create)
• CT requires clear language b/c disfavored
• NOT ENOUGH = "To a for the purpose of constructing a day care center" OR "To A w/ the hope that she becomes a lawyer" OR "to A w/ the expectation that..."
• In these examples, A has a fee simple absolute - What is the Rule on Restraint on Alienation?
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⬢ An Absolute restraint on alienation is an absolute ban on the power to sell or transfer that is not linked to any reasonable time-limited purpose
⬢ E.g. "To A so long as she never attempts to sell"
⬢ = VOID & A has a fee simple absolute
⬢ BUT "To A so long as she does not attempt to sell until 2008 when clouds on title will be resolved"
⬢ = OK (A has a fee simple determinable & O has POR) - What is a life estate and what is a life estate pur autre vie?
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• = must be measured in explicit life time terms & NEVER in terms of years
• = the romantic estate -“will love you all the days of your life†or “all the days of my lifeâ€
• A = has life estate & A known as the life tenant
• O has a reversion, meaning at end of A’s lifetime will revert back to O or O’s heirs
• Pur Autre Vie = life estate measured by a life other than the grantee’s
“To A for the life of Bâ€
• Alienable, devisable & descendible if pur autre vie & measuring life is still alive
• Future Interest = reversion if held by O & remainder if held by 3rd P
• A is known as the "Life Tenant" -
Doctrine of Waste
(When does it apply + what are the 2 General Rules) -
⬢Applies whenever more than one entity has an interest in Blackacre
⬢ Life Tenant is entitled to ALL ordinary uses & profits from the land
⬢ BUT Life tenant must NOT commit waste (= do anything to harm future interest holders) - What are the 3 strands of Waste?
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1) Voluntary or Affirmative Waste
2) Permissive Waste
3) Ameliorative Waste -
Voluntary or Affirmative Waste
What is is it & what is it referring to? -
• = actual overt conduct that causes a decrease in value
• General Rule – thinking about natural resources like timber, oil, etc. -
Exceptions to Voluntary Waste
What is the acronym & what does it stand for? -
PURGE
PU = Prior Use (but Open Mines Doctrine = limited to mines already open)
R = Reasonable Repairs (may consume natural resources for reasonable repairs & maintenance of the premises)
G = Grant (life tenant may exploit if expressly granted RT to do so)
E = exploitation (land is suitable ONLY FOR exploitation, such as w/ a quarry) -
Permissive Waste
What is is it & what is it referring to? -
⬢ =land is allowed to fall into disrepair OR the life tenant fails to reasonably protect the land
⬢ Syn. w/ neglect
⬢ Duty to Repair = life tenant must simply MAINTAIN in reasonably good repair (doing no more & no less than ordinary maintenance would require)
o E.g. Russell Crowe required to patch up leaking holes but not replace the entire roof/ceiling
⬢ Life Tenant also required to pay ALL ordinary taxes to the extent of the premises fair rental value - Ameliorative Waste
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• May not engage in acts that will enhance the property’s value – unless future interests holders consent
• Have to demonstrate consultation of interest holders that are known & their consent
• About nostalgic value (don’t want Blackacre turned into a multi-Cineplex) - 6 Categories of Future Interest & How They Are Classified
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In Grantor:
1) Possibility of Reverter
2)RT of Entry (aka Power of Termination)
3)Reversion
In Transferees
4) Vested Remainder (3)
5) Contingent Remainder
6)Executory Interest (2) -
Future Interests Retained by Transferees
(Characteristics) -
Vested remainder
⬢ Indefeasibly remainder
⬢ Vested Remainder subject to complete defeasance (vested remainder subject to total divestment)
⬢ Divested remainder subject to open
Contingent Remainder
Executory Interest
⬢ Shifting
⬢ Springing - Remainder Definition
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• Remainder = future interst created in a grantee
Never by themselves – always accompanies a preceding estate of KNOWN FIXED DURATION (usually a life estate OR a term of years)
• “To A for life & then to B†OR “To A for 10yrs & then to Bâ€
REMAINDERMAN NEVER FOLLOWS A DEFEASIBLE FEE
• Doesn’t have it in him to be the beneficiary of another’s misfortune
• Remainderman waits patiently for preceding estate to run its natural course
• Instead future interest in these cases would be an executory interest if held by someone other than grantor - Vested Remainders vs. Contingent Remainders
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Vested =
BOTH created in a known ascertained person AND
NOT subject to any condition precedent
Contingent =
Unascertained person OR Subject to condition precedent OR Both
Remember, while B is alives, B's heirs are unknown
so
"To A for life, then to B's heirs" - if & while B is alive = CR
"To A for life & then to B's heirs who survive A" = CR
"To A for life, then, if B graduates college, to B" (B in high school now)
- B has CR & O has a reversion
- If B graduates it becomes an indefeasibly VR - Executory Interest
- Executory Interest = future interest created in a transferee & takes effect by either “cutting short†some interest in another person (shifting) or in the grantor/heirs (springing)
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Rule Against Perpetuities
(what is it?) -
⬢ = certain kinds of future interest or void if given interest may vest 21yrs after the death of a measuring life
1) Determine which future interests have been created by the contingency
2) Indentify the conditions precedent to the vesting of the subject future interest
3) Find a measuring life (alive at the time & relevant)
4) Ask "will we know w/ certainty w/in 21yrs from death of measuring life if future holder can take?"