Real Property (first part)

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richardlpeterson
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126449
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Real Property (first part)
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2012-01-14 12:18:11
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Real Property (first part)
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  1. Fee Simple Absolute
    • Creation: "To A and his heirs" "To A"
    • Duration: Absolute ownership
    • Transferability: devisable, descendible, alienable
    • Future Interest: None
  2. Fee Tail
    • Creation: "To A and the heirs of his body"
    • Duration: Lasts only as long as there are lineal descendants of grantee
    • Transferability: passes automatically to grantee's lineal descendants
    • Future Interest: Reversion (if held by grantor); remainder (if held by 3d party)
  3. Defeasible Fee
    Fee Simple Determinable
    • Creation: "To A so long as..." "To A until ..." "To A while ..." (Language providing that upon the happening of a stated event, the land is to revert to the grantor)
    • Duration: potentially infinite, so long as event does not occur
    • Transferability: alienable, devisable, descendible, subject to condition
    • Future Interest: possibility of reverter (held by grantor)
  4. Defeasible Fee
    Fee Simple Subject to Condition Subsequent
    • Creation: "To A, but if X event happens, grantor reserves the right to reenter and retake." Grantor must carve out right of reentry
    • Duration: potentially infinite, so long as the condition is not breached and, thereafter, until the holder of the right of entry timely exercises the power of termination
    • Transferability: alienable, devisable, descendible, subject to condition
    • Future Interest: right of entry/power of termination (held by grantor)
  5. Defeasible Fee
    Fee Simple Subject to an Executory Limitation
    • Creation: "To A, but if X event occurs, then to B"
    • Duration: potentially infinite, so long as stated contingency does not occur
    • Transferability: alienable, devisable, descendible, subject to condition
    • Future Interest: executory interest (held by 3d party)
  6. Life Estate
    • Creation: "To A for life" "To A for the life of B"
    • Duration: measured by life of transferee or by some other life
    • Transferability: alienable, devisable, and descendible if pur autre vie and measuring life is still alive
    • Future Interest: reversion (if held by grantor); remainder (if held by 3d party)
    • Additional:
    • -life tenant is entitled to all ordinary uses and profits from the land
    • -the life tenant must not commit waste
  7. Defeasible Fees
    Rules of Construction
    • 1. Words of mere desire, hope, or intention are insufficient to creat a defeasible fee; courts will not find a defeasible fee unless clear durational language is used; courts disfavor restrictions on free use of land
    • 2. Absolute restraints on alienation are void. Restraints on alienation can be linked to a reasonable, time-limited purpose.
  8. Waste
    Voluntary or affirmative waste
    • Definition: this is overt conduct that causes a drop in value (wilful destruction)
    • Voluntary waste and natural resources: the life tenant must not consume or exploit natural resources on the property (timber, oil, minerals), unless one of the following four exceptions applies PURGE
    • Prior Use: meaning that prior to the grant, the land was used for exploitation (open mines: may continue open mines during life estate in mines already open)
    • Repairs: the life tenant may consume natural resources for reasonable repairs and maintenance
    • Grant: the life tenant may exploit if granted that right
    • Exploitation: meaning land is suitable only to exploitation
  9. Waste
    Permissive Waste or Neglect
    • this occurs when land is allowed to fall into disrepair
    • Obligation to repair: life tenant must simply maintain the premises in reasonably good repair
    • Obligation to pay all ordinary taxes: the life tenant is obligated to pay all ordinary taxes on the land, to the extent of income or profits from the land; if there is no income or profit, the life tenant is required to pay all ordinary taxes to the extent of the premises' fair rental value
  10. Waste
    Ameliorative Waste
    the life tenant must not engage in acts that wil enhance the property's value, unless all future interest holders are known and consent
  11. Future Interests Capable of Creation in the Grantor
    • The Possibility of Reverter: it accompanies only the fee simple determinable
    • The Right of Entry (aka Power of Termination): accompanies only the fee simple subject to condition subsequent
    • The Reversion: the fallback/deafult; the future interest that arises ina grantor who transfers an estate of lesser quantum than she started with, other than a fee simple determinable or a fee simple subject to condition subsequent
  12. Future Interests in Transferees
    (in brief)
    • vested remainder: (i) the indefeasibly vested remainder, (ii) the vested remainder subject to complete defeasance (aka vested remainder subject to total divestment), (iii) the vested raminder subject ot open
    • contingent remainder:
    • executory interest: (i) the shifting executory interest, and (ii) the springing executory interest
  13. Assessing Future Interests in Transferees
    • 1. distinguish vested remainders from contingent remainders
    • 2. distinguish the three kinds of vested remainders from each other
    • 3. distinguish all remainders from executory interests
  14. Remainders
    • defined: a future interest 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
    • Remainderman (Gump) is sociable, patient and polite:
    • Sociable: never travels alone; always accompanies a preceding estate of known fixed duration (usu. life estate or term of years
    • Patient and polite: never follows a defeasible fee; can't cut short or divest a prior transferee; if your present estate is a defeasible fee, your future interest is NOT a remainder; instead it will be executory interest
  15. Remainders
    Vested or Contingent?
    • A remainder is vested if it is both created in an ascertained person and is not subject to any condition precedent.
    • A remainder is contingent if it is created in an unascertained person or is subject to a condition precedent, or both.
    • 1. The remainder that is contingent b/c it is created in as yet unborn or unascertained persons.
    • 2. The remainder that is contingent b/c it is subject to a condition precedent. When it appears before the language creating the remainder or is woven into the grant of remainderman.
    • 3. Contingent remainders and:
    • -(i) The Rule of Destructibility of Contingent Remainders: at common law=a contingent remainder was destroyed if it was still contingent at the time preceding estate ended; today=that rule is abolished, estate is held subject to springing executory interest
    • -(ii) The Rule in Shelley's Case: common law: O conveys "To A for life, then, on A's death, to A's heirs" A is alive; historically=the present and future interests would merge giving A a fee simple absolute; today=A has life estate and A's unknown heirs have contingent remainder and O has reversion
    • -(iii) Doctrine of Worthier Title: viable in most states (not VA); O (alive) conveys "To A for life, then to O's heirs"; no application=A has life estate and O's heirs have contingent remainder; applied=contingent remainder is void and A has life estate and O has reversion. rule of construction and so intent controls
  16. Remainders
    Distinguish the three kinds of vested remainders
    • indefeasibly vested remainder: the holder is certain to acquire an estate in the future with no conditions attached
    • vested remainder subject to complete defeasance: remainderman exists and his taking is NOT subject to any condition precedent, but his right to possessions could be cut short b/c of condition subsequent
    • note--condition precedent creates a contingent remainder and condition subsequent creates a vested remainder subject to complete defeasance; "comma rule" differentiates: when conditional language in a transfer follows language taken alone and set off by commas, would create a vested remainder, the condition is a condition subsequent with a vested remainder subject to complete defeasance (vice versa)
    • vested remainder subject to open: vested in a group of takers, one of whom (at least) is qualified to take. But each class member's share is subject to partial diminution b/c addt'l takers can still join in.
  17. Class
    Open or Closed?
    • Open: it is possible for others to join
    • Closed: maximum membership is set; closes whenever any member can demand possession
    • exception: womb rule: if in womb at time of A's death, will share
  18. Distinguish remainders from executory interests
    (Dr. Evil)
    Executory interest: future interest created in transferee (3d party) which is not a reaminder and which takes effect by either cutting short some interest in another person (shifting) or in the grantor or his heirs (springing)
  19. Distinguish remainders from executory interest
    Shifting executory interest
    always follows a defeasible fee and cust short someone other than grantor (in RAP territory)
  20. Distinguish remainders from executory interest
    Springing executory interest
    cust short O, the grantor (in RAP territory)
  21. RAP
    Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the deat of a measurable life
  22. Technique for Assessing RAP Problems
    Step One: which future interest
    • Determine which future interests have been created by the conveyance.
    • The RAP can only apply to contingent remainders, executory interests, and certain vested remainders subject to open
    • The RAP does NOT apply to (i) any future interest in O (grantor), (ii) indefeasibly vested remainders, (iii) vested remainders subject to complete defeasance
  23. Technique for Assessing RAP Problems
    Step Two:
    Identify the conditions precedent to the vesting of the suspect future interest
  24. Technique for Assessing RAP Problems
    Step Three
    Find a measuring life. Look for a person alive at the date of the conveyance and ask whether that person's life or death is relevant to the condition's occurrence
  25. Technique for Assessing RAP Problems
    Step Four
    • Will we know, with certainty, w/in 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take?
    • If so, the conveyance is good.
    • If not, the future interest is void.
  26. Two Bright Line Rules of Common Law RAP
    • 1. A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP; "bad as to one, bad as to all"; voids the entire class gift
    • 2. Many shifting executory interests violate the RAP. An executory interest with no limit on the time w/in which it must vest violates the RAP
    • But charity-to-charity exception: A gift from one charity to another does not violate the RAP
  27. Reform of the RAP
    • 1. "wait and see" or "second look" doctrine: majority reform effort; validity of any suspect future interest is determined on the basis of the facts as they now exist, at the end of the measuring life. This eliminates the "what if" or "anything is possible" line of inquiry
    • 2. Uniform Statutory Rule Against Perpetuities (USRAP): codifies CL RAP and provies for an alternative 90 year vesting period
    • 3. Both embrace:
    • -(i) cy pres doctrine: as near as possible; courts may reform to make it closely match grantor's intent while still complying
    • -(ii) the reduction of any offensive age contingency to 21 years
  28. Concurrent Estates
    Three Forms
    • 1. Joint tenancy: 2 or more owners with right of survivorship
    • 2. Tenancy by the entirety: a marital interest between married partners with the right of survivorship
    • 3. Tenancy in common: 2 or more owners with no right of survivorship
  29. Concurrent Estates
    Joint Tenancy
    Distinguishing Characteristics
    • 1. the right of survivorship - passes automatically at death to the surviving joint tenants
    • 2. joint tenant's interest is alienable but not devisable or descendible
    • so - last survivor gets it all
  30. Concurrent Estates
    Joint Tenancy
    Creation
    • The four unities:
    • 1. Time
    • 2. Title - same instrument
    • 3. Identical interests, and
    • 4. Possess (rights to possess the whole)
    • Grantor must clearly express the right of survivorship.
    • Joint tenancies are disfavored. Thus, in addition to the 4 unities, grantor must clearly state the right of survivorship.
    • Use of a straw to satisfy the unities: situation - D holds in fee simple but wants to hold with P
    • 1. D conveys to straw
    • 2. Straw conveys to D and P as joint tenants w/ right of survivorship
  31. Concurrent Estates
    Joint Tenancy
    Severance (SPAM)
    Sale
    • Severance and Sale:
    • A joint tenant can sell or transfer her interest during her lifetime.
    • May be done secretly w/out others' knowledge or consent.
    • Sale disrupts the 4 unities.
    • Makes buyer a tenant in common.
    • To the extent started with more than two joint tenants, joint tenancy remains intact, as between the other, non-transferring joint tenants.
    • Equity:
    • act of entering into a contract for the sale of joint tenant's share will sever the joint tenancy as to the contracting party's interest; called equitable conversion, that is, equirty regards as done that which ought to be done; if A enters into contract for sale of interest in joint tenancy on January 1 with closing for April 1, the severance occurs on January 1.
  32. Concurrent Estates
    Joint Tenancy
    Severance (SPAM)
    Partition
    • When the parties have come to the end of the road.
    • Three variations:
    • 1. By voluntary agreement: peaceful way to end the relationship
    • 2. Partition in kind: court action for physical division of Blackacre if in best interests of all *best if sprawling acreage*
    • 3. Forced sale: court action; only if in best interests of all; steps: sold, then proceeds divided proportionately, and best if singular unit or difficult to partition
  33. Concurrent Estates
    Joint Tenancy
    Severance (SPAM)
    Mortgage
    • The rule: one joint tenant's execution of a mortgage or a lien on his or her share will sever the joint tenancy as to that now encumbered share only in the minority of states to follow the title theory of mortgages.
    • By contrast, the majority of states follow the lien theory of mortgages, whereby a joint tenant's execution of a mortgage on his or her interest will not sever the joint tenancy.
  34. Concurrent Estates
    Tenancy by the Entirety
    • Creation: Between married partners with right of survivorship.
    • In 21 states, it arises presumptively in any conveyance to married partners unless stated otherwise; hallmark is marital interest.
    • Very protected form: "Can't Touch This" b/c it is a marital interest
    • 1. creditors of only one spouse can't reach this tenancy.
    • 2. unilateral conveyance - neither tenant, acting alone, can defeat the right of survivorship by unilateral transfer to a 3d party.
    • can't secretly transfer
  35. Concurrent Estates
    Tenancy in Common
    • Three features:
    • 1. Each cotenant owns an individual part and each has a right to possess the whole
    • 2. Each interest is descendible, devisable and alienable. There are no survivorship rights between tenants in common
    • 3. The presumption favors the tenancy in common
  36. Concurrent Estates
    Rights and Duties
    Possession
    • Each cotenant is entitled to possess the whole.
    • If one cotenant wrongfully excludes another cotenant from possession of the whole or any part, he has committed wrongful ouster.
    • Can't just divide it up, it is the whole they have right to possess.
  37. Concurrent Estates
    Rights and Duties
    Rent from cotenant in exclusive possession
    Absent ouster, a cotenant in exclusive possession is not liable to the others for rent
  38. Concurrent Estates
    Rights and Duties
    Rent from third parties
    A cotenant who leases all or part of the premises to a 3d party must account to his cotenants and give them their fair share of rent income
  39. Concurrent Estates
    Rights and Duties
    Adverse possession
    • Unless he has ousted the other cotenants, one cotenant in exclusive possession for the statutory adverse possession period cannot acquire title to the exclusion of the others.
    • This is because the hostility element of adverse possession is absent. There is no hostility because there was no ouster.
  40. Concurrent Estates
    Rights and Duties
    Carrying costs
    Each cotenant is responsible for his or her fair share of carrying cost (such as taxes and mortgage, interest payments) based upon undivided share
  41. Concurrent Estates
    Rights and Duties
    Repairs
    The repairing cotenant enjoys a right to contribution for reasonable and necessary repairs provided that she has told the others of the need. Amount is proportionate.
  42. Concurrent Estates
    Rights and Duties
    Improvements
    • During the life of the cotenancy, there is no right to contribution for "improvements"
    • However, at partition, the improving cotenant is entitled to a credit, equal to any rise in value due to a cotenant's efforts
    • At partition, the "improver" bears full liability for any drop in value due to efforts
  43. Concurrent Estates
    Rights and Duties
    Waste
    • A cotenant must not commit waste
    • 1. voluntary - wilful destruction
    • 2. permissive - neglect
    • 3. ameliorative - unilateral change increasing value
    • Action can be brought during life of cotenancy
  44. Concurrent Estates
    Rights and Duties
    Partition
    A joint tenant or tenant in common has a right to bring an action for partition

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