Present Interests
What is a fee simple absolute?
It is absolute ownership of potentially infinite duration and is freely alienable.
It is the most common form of property ownership. It is the default estate.
Language: "and his heirs," "to X"
DO NOT be fooled by words of intent or purpose i.e. "my hope and wish"
What are types of grantor's future interests?
1. Possibility of reverter - FSD; interest vests automatically
2. Right of reentry - FSCS; does not vest automatically it must be reclaimed
3. Reversion - possession goes back to grantor; LE or anything less than fee simple
What is RAP?
Specific future interests are valid only if they must vest or fail by the end of a life in being plus 21 years
What is a tenancy in common?
Exists when two or more co-owners have an equal right to possess property but do not have a right of survivorship.
This is the default concurrent interest. Any conveyance to more than one person is presumed to be a tenancy in common.
What is a partition?
A form of equitable remedy awarded by the court. The court will divide the property into distinct portions either physically (preferred) or by sale.
What is a life estate?
Present possessory estate that is limited in duration by a life (grantee's life or other's - per autre vie).
Language: "for life"
NOT a unit of time
What are the types of 3rd party's future interests?
1. Remainders - 3rd party interest that becomes possessory following natural expiration of prior estate (LE).
2. Executory interest - future interest will vest in third party automatically upon occurrence of durational limit (FSD) or condition (FSCS).
3. Class gifts - given to a group that shares common characteristic (categorized as a VRSO or CR depending on whether a member of the class has vested).
What does RAP never apply to?
Future interests that are held by the grantor (possibility of reverter, right of reentry, and reversion).
What is a joint tenancy?
Exists when two or more persons own property with the right of survivorship.
What is the doctrine of waste and what is it applicable to?
Duty to avoid waste (affirmative/voluntary, permissive/negligence, and ameliorative).
L&T, concurrent estates, present and future interest, and mortgages
What is a fee simple determinable?
A present fee simple estate that is limited by specific durational language.
Language: so long as, while, during, until
What are the types of executory interests?
Shifting - divests (terminates) the interest of the grantee by cutting short a prior estate created in the same conveyance
Springing - divests (terminates) the interest of the grantor or fills a gap in possession in which the estate reverts to the grantor.
What future interest does RAP apply to?
1. contingent remainders
2. executory interests
3. Class gifts (RAP des not apply to vested remainders unless subject to open; also look for rule of convenience)
How do you create a joint tenancy?
Does obtaining a mortgage impact a joint tenancy?
Lien theory (majority) - the mortgage is treated as a lien and does not destroy the joint tenancy
Title theory (minority) - the mortgage severs the title and the tenancy is converted to a tenancy in common
What is a fee simple subject to condition subsequent?
Language: provided that, on condition that, but if
What is the rule of convenience?
If the grant does not have an express closing date, this rule closes the class when any member of the class becomes entitled to immediate possession.
Avoids application of RAP to a class gift
How do you determine if there is a RAP issue?
First, see if the future interest implicates RAP.
Next, look for the relevant (person(s) who affects vesting) and the validating life (person who tells you whether or not the interest vests or fails within life + 21 years).
Validating life - must have been alive when interests were created; if not validating life the interest is no good.
What is the difference between a joint tenancy and a tenancy by the entirety?
Tenancy by the entirety has all four unities and the unity of persons (marriage).
What is (1) the doctrine of worthier of title and (2) rule in Shelley's case?
Doctrine of worthier title - prevents remainders in a grantor's heirs, after a LE presume reversion to grantor (then it will pass to the grantor's heirs regardless).
Rule in Shelly's case - prevents remainders in a grantee's heirs, creates a fee simple (then it was pass to the grantee's heirs unless the will says otherwise).
What is a fee simple subject to executory interest?
Present fee simple estate that is limited by specific durational or conditional language such that upon occurrence of the specified event or condition, title will automatically pass to a third party.
What are the types of remainders?
1. Vested remainder - an interest that is (1) given to an ascertained grantee and (2) not subject to a condition precedent.
2. Contingent remainder - an interest that is either (1) given to an unascertained grantee and/or (2) subject to a condition precedent.
Within vested remainders there are different types:
A. vested remainder subject to total/complete divestment - the occurrence of a condition subsequent will completely divest (terminate) the remainder interest
B. vested remainder subject to open - (1) a class gift and (2) full class membership is unknown
Does the following scenario violate RAP?
O conveys Blackacre to A for life, then to A’s first child to become a doctor
RAP Violation !
A has a life estate and A's child has a contingent remainder (grantee cannot be ascertained and there is a condition precedent). Contingent remainders are subject to RAP.
A is the validating life, but after A dies it might be more than 21 years for one of her children to become a doctor.
What are the rights/duties of co-tenants?
1. Right to possess THE WHOLE property
2. Right to retain profits from own use but must share rents/profits from 3rd parties
3. Right to contribution for operating expenses (taxes and mortgages) unless tenant in sole possession
4. Right to remedy of judicial partition (note tenants by the entirety do not have the unilateral right to partition).
5. Right to contribution for more than share of necessary repairs and improvements BY A PARTITION ACTION
What are some exceptions to RAP?
1. class gift - transfer of a specific dollar amount to each class member
2. class gift - transfers to a sub-class that vests at a specific time
3. gift from one charity to another charity
4. an option held by a current tenant to purchase a fee interest in the leasehold property; nor an option in a commercial transaction