Property - Ownership

Possibility of Reverter

A possibility of reverter is automatically retained by a grantor when a fee simple determinable is conveyed

Ameliorative waste

Ameliorative waste occurs when a change in use of the property increases the value of the property. When determining whether ameliorative waste is non-compensable, courts consider the tenant's expected remaining life, the need for the change, and the good faith of the parties.

Rule Against Perpetuities - Exceptions

Charity to charity Current tenant option to extend or purchase

Joint Tenancy - Severability & Mortgages

Lien theory - lien applies do all and this does not sever the joint tenancy (applies also to judicial liens) Title theory - recording of a deed severs title and joint tenancy converts to a tenancy in common

Tenancy by the Entirety

Requires all four pillars of joint tenancy + the parties must be married (unity of person). Rights of survivorship exist

Doctrine of Worthier Title

The Doctrine of Worthier Title is a rule of construction similar to the rule in Shelley's Case, except that it prevents remainders in the grantor's heirs, and it still applies in some states. The presumption is in a reversion to the grantor, rebuttable by a showing of contrary intent.

Four Unities of Joint Tenancy

The joint tenancy must be created with each joint tenant having an equal right to possess or use the property (unity of possession), with each interest equal to the others (unity of interest), at the same time (unity of time), and in the same instrument (unity of title). [Mnemonic−"PITT"].

Concurrent Estates

A concurrent estate (or co-tenancy) is ownership or possession of real property by two or more persons simultaneously. The most common concurrent estates are tenancy in common, joint tenancy, and tenancy by the entirety.

Joint Tenancy

A joint tenancy exists when two or more individuals own property with the right of survivorship

Rule Against Perpetuities - Wait and See Statutes

A majority of the states have adopted the Uniform Statutory Rule Against Perpetuities, which adopts a "wait and see" stance with respect to the applicability of the Rule. Under this stance, an otherwise invalid interest is valid if it does in fact vest within 90 years of its creation. A few states have simply repealed the Rule altogether.

Remainder

A remainder is a future interest created in a grantee that is capable of becoming possessory upon the expiration of a prior possessory estate of known fixed duration that is created in the same conveyance in which the remainder is created. A remainder can be either vested or contingent.

Right of Reentry

A right of reentry (also called "right of entry" or "power of termination") is a future interest held by the grantor after a fee simple subject to a condition subsequent is granted.

Shifting Executory Interest

A shifting executory interest divests the interest of the grantee by cutting short a prior estate created in the same conveyance. The estate "shifts" from one grantee to another on the happening of the condition.

Vested Remainder

A vested remainder is an interest that is not subject to any conditions precedent and is created in an ascertainable grantee.

Vested Subject to Complete Divestment

A vested remainder subject to divestment indicates that the occurrence of a condition subsequent will completely divest the remainder interest. Example: 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.

Rule Against Perpetuities - Defeasible Fees

An executory interest that follows a defeasible fee violates the Rule, unless there is a time limit on the vesting of the executory interest that satisfies the Rule. This leaves the holder of the defeasible fee with a fee simple after the executory interest is struck.

Permissive Waste

The tenant "permits" the premises to deteriorate through neglect, a failure to preserve the property, or a failure to reasonably protect the property.

Rule Against Perpetuities - Cy Pres Doctrine

Under this doctrine, the court makes changes to the conveyance, such as reducing a time limit for a future interest to take effect to 21 years after the expiration of the last measuring life, in order to come "as near as possible" to the intent of the transferor while staying within the bounds of the Rule.

Possibility of Reverter

Upon the occurrence of the stated condition, the estate automatically reverts back to the grantor. The grantor's retained future interest is called a "possibility of reverter." A possibility of reverter is freely alienable by the grantor, both during his life and upon his death.

Transferability of Vested Remaindes

Vested remainders are fully transferable inter vivos, devisable by will, and descendible by inheritance.

Life Estate Pur Autre Vie

A life estate measured by the life of a third party. Example: A conveys Blackacre to "B for the life of C." A granted a life estate to B for the life of C.

Rule Against Perpetuities - Effect

If a future interest fails to satisfy the Rule, then only the offending interest fails. In the rare case when the voiding of the future interest undermines the grantor's intent, the entire transfer is voided. EXAM NOTE: The MBE often tests the Rule by presenting answer choices relating to the result of a failed interest. Be sure to analyze the estate without the offending interest and to consider the grantor's intent.

Rule Against Perpetuities - Class Gifts

If the transfer of a future interest is made to a class, and the Rule voids a transfer to any member of a class, then the transfer is void as to all class members, even those whose interests are already vested (i.e., "bad as to one, bad as to all").

FHA Enforcement (HUD)

(HUD) plays the lead role in administering the FHA. A person who believes that a violation of the FHA has occurred may file a complaint with HUD and/or file suit in federal court. Available relief includes actual damages (including humiliation, and pain and suffering), injunctive or other equitable relief, and reasonable attorney's fees and costs. If the case is resolved by an administrative hearing, then a civil penalty to vindicate the public interest may be assessed. A federal court may award punitive damages.

Defeasible Fees

A defeasible fee is ownership of potentially infinite duration. But, a defeasible fee may be terminated by the occurrence of an event.

Fee Simple Determinable

A fee simple determinable is a present fee simple estate that is limited by specific durational language (e.g., "so long as," "while," "during," "until"), such that it terminates automatically upon the happening of a stated condition, and full ownership of the property is returned to the grantor.

Fee Simple Subject to a Condition Subsequent

A fee simple subject to a condition subsequent is a present fee simple that is limited in duration by specific conditional language. EXAM NOTE: Typical language that indicates a fee simple subject to a condition subsequent: "provided that," "on condition that," "but if."

Fee Simple Subject to an Executory Interest

A fee simple subject to an executory interest is a present fee simple estate that is limited in duration by either conditional language or durational language, such that it will terminate upon the occurrence of the specified condition, and title will pass to a third party (i.e., someone other than the grantor). Upon occurrence of the stated condition, the present fee simple terminates automatically. The future interest held by the third party is an executory interest.

Fee Tail

A fee tail is a freehold estate that limits the estate to the grantee's lineal blood descendants by specific words of limitation (e.g., "heirs of the body"). The fee tail estate has been eliminated in most states; it is treated as a fee simple absolute estate.

Future Interests

A future interest is an interest in presently existing property or in a gift or trust, which may commence in use, possession, or enjoyment sometime in the future.

Life Estate

A life estate is a present possessory estate that is limited in duration by a life. The language must be clear, and must be measured in terms of a life, not a number of years (e.g., "to A for life"). Upon the end of the measuring life, title reverts to the grantor or specified remainderman. This future interest is known as a "reversion."

Rights an Obligations in a Life Estate

A life tenant has the right of possession, the right to all rents and profits during possession, and the right to lease, sell, or mortgage the property (right of alienation). To the extent that the property can produce income, life tenants have the obligation to pay all ordinary taxes on the land and interest on the mortgage. If the property is not producing an income, the life tenant is responsible for taxes and mortgage interest to the extent of the reasonable rental value of the land. The life tenant also has the duty not to commit waste.

Life Estate - Doctrine of Waste

A life tenant must deliver the property in essentially the same condition that it was in when she took possession. The holder of a future interest in the property may enter the land to inspect for waste, and she may seek damages and an injunction to prevent waste.

Contingent Remainder

A remainder is contingent if it is created in a grantee that is unascertainable, or if it is subject to an express condition precedent to a grantee's taking. This situation normally occurs in one of two circumstances: (i) when the property cannot vest because the beneficiary is unknown or (ii) when the property cannot vest because the known beneficiary is subject to a condition precedent that has not yet occurred.

Reversion

A reversion (or "reverter") is the future interest held by the grantor who grants a life estate or estate for years but does not convey the remaining future interest to a third party. Reversions are not subject to the Rule Against Perpetuities.

Springing Executory Interest

A springing executory interest divests the interest of the grantor or fills a gap in possession in which the estate reverts to the grantor.

Partition of Concurrent Interests

A tenant in common or a joint tenant generally has the right to unilaterally partition the property, but a tenant by the entirety does not have this right. Property can be partitioned either voluntarily (if the co-tenants agree in writing on the division of land) or involuntarily (by court action)

Executory Interest

An executory interest is a future interest in a third party that is not a remainder and that cuts the prior estate short upon the occurrence of a specified condition. Executory interests are transferable and are subject to the Rule Against Perpetuities.

Tenancy in Common

Equal right to possess or use the property (unity of possession) is required, and no right of survivorship exists. Each co-tenant holds an undivided interest with unrestricted rights to possess the whole property, regardless of the size of the interest. Without the right of survivorship, each tenant can devise or freely transfer his interest to anyone. *Catch all concurrent estate

Vested Remainder Subject to Open (Class Gifts)

If a conveyance grants a remainder to a class of grantees and at least one of the grantees receives a vested remainder at the time of the conveyance, then that vested remainder is subject to open (i.e., the property interest is uncertain because other grantees may become vested and able to share in the grant).

Survivorship Contingency

If a survivorship contingency is stated in a conveyance, then the majority view is that the contingency applies at the termination of the interest that precedes distribution of the remainder. A minority approach interprets a survivorship contingency to require surviving only the testator and not the life tenant.

Conflict of Laws - Law of Situs

If there is a conflict of laws issue, the court should apply the laws governing where the property is located.

Subject to a Condition Subsequent - right to terminate

In the conveyance, the grantor must explicitly retain the right to terminate the fee simple subject to a condition subsequent (known as the "right of entry," "right of reentry," or "power of termination").

Fee Simple

It is absolute ownership of potentially infinite duration, is freely alienable (i.e., easily bought or sold), and has no accompanying future interest.

Vested Remainder Subject to Open - Class Closes

Once a class closes, any person who might otherwise have become a class member (e.g., later-born siblings) cannot claim an interest in the property as a class member. Although those born after the class closes are generally not part of the class, those already in gestation upon closing are included in the class. Absent a closing date, the rule of convenience closes the class when any member of the class becomes entitled to immediate possession of the property.

Affirmative Waste

Overt conduct that causes a decrease in the value of the property. The holder of the vested remainder interest may bring suit for damages, and either a vested or contingent remainder holder may bring suit for an injunction.

Shelley Case Rule

Present and future interest merge. Example: A conveys "to B for life, remainder to B's heirs." If the rule in Shelley's Case applies, then after the merger, B will receive the property in fee simple absolute. If the rule in Shelley's Case has been abolished, then B has a life estate, and B's heirs have a contingent remainder in the subject property.

Rule Against Perpetuities

Specific future interests are valid only if they MUST vest or fail by the end of a life in being plus 21 years.

FHA Fair Housing Act

The FHA prohibits discrimination in the sale, rental, and financing of homes and in other housing-related transactions (such as advertising, homeowner's insurance, and zoning).

FHA - Protected classes

The FHA prohibits discrimination on the basis of race, color, religion, national origin, sex, disability, and familial status. To establish racial discrimination under the FHA, the plaintiff need only show a disparate racial impact, not a racial intent or purpose

Rule Against Perpetuities - Future Interests

The Rule applies only to the following interests: contingent remainders, vested remainders subject to open, executory interests, powers of appointment, rights of first refusal, and options. It does not apply to future interests that revert to the grantor (i.e., reversion, possibility of reverter, right of reentry).

Subject to a Condition Subsequent v. Fee Simple Determinable

Unlike a fee simple determinable, termination of a fee simple subject to a condition subsequent is not automatic. Upon occurrence of the stated condition, the present fee simple will terminate only if the grantor affirmatively demonstrates intent to terminate (e.g., by bringing an action to recover possession).

Ouster

When a co-tenant refuses to allow another co-tenant access to the property, the ousted co-tenant may bring a court action for ouster (e.g., seek an injunction) to gain access to the property and to recover the value of the use of the property for the time during which the co-tenant was denied access to the property.