Property Rules 1

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Property Rules 1
2010-07-16 18:58:41

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  1. Fee simple determinable/Fee on limitation
    "so long as" "while" "during" "until"

    Limits DURATION by DURATIONAL langauge and possibly purpose. If limits only purpose, is a fee simple absolute.

    Grantor holds right of reverter
  2. Fee simple subject to condition subsequent/Fee on condition
    "provided that" "on the condition that" "but if"

    Limits DURATION by CONDITIONAL langauge and possibly purpose. If limits only purpose, is a fee simple absolute.

    Grantor holds right of re-entry, which the grantor must affirmatively seek. It is not automatic as with a possibiltiy/right of reverter
  3. Rights and obligations of a life estate holder
    • Rights:
    • Possession
    • collect rent and profits during possession
    • lease, sell, or mortgage during possession

    • Obligation:
    • Pay taxes, insurance, and interest on mortgage (need NOT pay principal)
    • Duty not to commit waste
  4. Right of reverter/ Possibility of reverter
    Occurs automatically upon violation of condition for fee on limitation, except where otherwise stated in the conveyance.

    May be alienated both before and after violation of the condition.

    To preserve the right, between 27 and 30 years after interes's creation, must file Declaration of Intent to Preserve Restrictions on the Use of Land. Then re-record between every 9 and 10 years thereafter.
  5. Amelioritive waste allowed in NY if:
    • 1) not against any conveyance agreement
    • 2) not by one whose life expectency is less than five year
    • 3) with notice to interested parties
  6. Four unities of tenancy in common (plus fifth for tenancy by the entireties)
    • 1) Possession
    • 2) Interest
    • 3) Time
    • 4) Title

    • For tenancy be entireties:
    • 5) Marriage
  7. Effect of tenancy by the entireties (NY distinction)
    Spouses may manage and mortgage individual shares. Spouse will be protected from spouse's creditors.

    Unilateral transfers by one tenant will create only a contingent future interest (they take only if non-transferring spouse dies first)

    Dissolves upon divorce, death of one spouse, or mutual agreement.
  8. Who has a right of partition? What is the effect of partition?
    Tenants in common, joint tenants have the right. Tenants by the entireties do NOT have unilateral right to partition, but may voluntarily do so.

    Right to involuntary partition held only be tenants with right to immediate possession.

    • Effect:
    • Divided into separate interests, or sold at public auction where division not practical or fair.
  9. Vested interest subject to open/complete

    • Conveyance to class where at least one class member has vested interest, but class is still open to new members.
    • “To B for life, and then to B’s children as they turn 18.” B has three children at death ages 10, 15 and 20. 20 year-old has a vested remainder subject to open, because the property interest will be shared when other two reach 18 years.

    Complete (aka total divestment in NY):

    • occurrence of condition completely divests the remainder interest
    • A conveys “to B for life, and then to C; but if C has no children, then to D’s children.” C has a vested remainder interest, but if he is not survived by his children at the time of B’s death, then C’s interest will be divested.
  10. Contingent remainder
    Remainder created in grantee that is unascertainable.

    “To B for life, remainder to C’s heirs.” If C is alive at the conveyance, C’s heirs are not yet ascertainable.

    No distinction between contingent remainders and executory interests in NY, both are "remainder vested subject to complete defeasance."
  11. 5 common violations of RAP (RAP applies to commecial transaction in NY)
    Class transfers requiring survival beyond age 21

    Fertile octogenarian

    Unborn Spouse (“to B for life, then to B’s widow for life, then to B’s children who are then living.”)

    Defeasible fee followed by executory interest (“to B; but if the property is used for residential purposes; then to C.”)

    Conditional passage of interest
  12. Cy pres and wait and see
    Not for trusts, but used for powers of appointment and for charitable trusts