lesson 2

fee simple determinable estate

A __ is a type of fee simple defeasible estate which causes the title to automatically revert to the original owner if the deed requirements regarding property use are violated. The estate will come to an end automatically and immediately upon the occurrence of a designated event. The time of that occurrence is uncertain (because the occurrence depends on an action, not a date). No legal action is required of the grantor in order to assume recovery of this kind of estate. memory trick: It's determined that ___ will regain the property if ___ happens.

leasehold estate

A ___ generally occurs when the estate-holder has a lease. Have you ever rented a home? Congrats, you had a leasehold estate! in determining if something is a freehold estate: How long can the estate-holder actually own the estate? Are there limits of duration? Who owns the estate, and (if there are multiple parties) what is their relationship to each other? Are there specific interests granted (or NOT granted) in the estate? What are they?

fee simple estate (also known as a fee interest or simply fee estate)

A ___ grants the most unlimited, most absolute interest in real property. This means that there are NO conditions on the title. A ___ is: Of indefinite duration Freely transferable Freely inheritable When a grantor conveys a ___, the grantor conveys (to the grantee) full ownership of a property for the grantee's lifetime. An estate in fee simple is the highest or fullest type of interest in real estate recognized by law. It is one in which the holder is entitled to the full bundle of rights connected to the property. The grantee then has the right to use, occupy, and/or dispose of the property as they see fit. A ___ may also descend to heirs. There are no limits or conditions on the title of a fee simple estate - that's what makes it simple! Most people who own a home own it this way — it's the most common estate for your average homeowner. example: Let's say Saide owns a lovely 10-acre property. He owns this property for an indefinite period of time, meaning that he will own that property until he decides he doesn't want to own it anymore. There is no lease or other condition that will kick Saide off of his property before he is ready. Saide is free to transfer his property to whomever he pleases. He can sell it, he can keep it - the choice is his! Saide also has the right to choose an heir. If Saide wants his second-cousin-twice-removed with 349 cats to inherit it, it's his right to make that happen. Considering all of these conditions, it's most likely that Saide's estate is a ___.

conventional life estates

A ___ is a life estate created through a grant from a property owner to another party. The two different types of __ are: Ordinary Pur autre vie

conventional life estate pur autre vie (pur autre vie is an old-timey French phrase meaning life of another)

A ___ is a life estate in which the measuring life is someone other than the tenant. So for example, it could be life of the grantor, or the life of a person the tenant is taking care of. When the measuring life ends, the estate is returned to the original grantor or passed on to some other designated person according to the provisions of the conventional life estate. EXAMPLE Jenny owns a home. She wants to ensure Burt, her elderly uncle, is cared for at the end of his life. So she conveys the house to Paula, Burt's daughter and caretaker, as life estate with Burt's life as the measuring life. Paula is the life tenant. The measuring life is Burt's. Upon Burt's death, the life estate ends and reverts to Jenny, as dictated in the deed. I know you're wondering what happens if Paula should die while Burt is still alive. Well, Paula's heirs may inherit her life estate. However, when Burt dies, Paula's heirs will lose the estate.

defeasible estate/fee simple defeasible/qualified fee estate

A ___ is an estate characterized by perpetual ownership on the condition that the property is used for a certain purpose or under specific conditions. Ownership reverts back to the original owner if these stipulations are violated, but the condition runs with the land. This is also called a ___. Defeasible is a term used to indicate that something is capable of being annulled or made void. So, defeasible estates are any estates conveyed by a grantor with conditions that - if violated - could make them null or void.

life estate

A ___ is so named because it is limited to the duration of a measuring life (this may be the life of the tenant or the recipient of the ___). What Makes It a ___? The life tenant enjoys the full bundle of rights of ownership, but they do so ONLY for the duration of the measuring life. ___ can be created by private parties or by law (under specific circumstances). ___ create a future interest for the person next in line to receive title to the property. These future interests can be remainder interests or reversionary interests.

fee simple condition subsequent estate

A ___ is the other type of defeasible fee estate. This is the same as the other type in that it comes with specific requirements (or conditions). The difference is that, for ownership to change, the grantor of the estate must prove (in court) that the defeasible fee estate condition has been violated. This MUST happen within a certain time frame. This change of ownership is NOT automatic, as is the case with the other. Once the court is satisfied with an established condition violation, the grantor can exercise their right of reentry, which is the right to retake possession of the property.

ordinary conventional life estate

An ___ is a life estate in which the measuring life is that of the life tenant. It is an estate created by a deed that lasts for the duration of the tenant's life. This is often referred to simply as a conventional life estate and is not always called an __ (that's a lot to say). EXAMPLE Timmy has a fee simple estate and conveys the estate to Jody for Jody's lifetime. Jody is the life tenant and his life is the measuring life. Upon Jody's death, the life estate terminates. Ownership of the property is passed on to Breck, as dictated in the estate's deed.

absolute estate/fee title estate

An ____ is an estate without restrictions that is freely given to heirs (this is the most common type of residential real estate). This is also called a ___. Again, this is the kind of estate most people have in a home.

the two forms of life estates

Conventional life estate: any life estate created by property owners through a grant Legal life estate: any life estate created by a function of law Both conventional life estates and legal life estates can come in different forms.

absolute and defeasible

Fee simple estates can be further broken down into ___ and ___ estates.

freehold estate breakdown recap

Freehold estates can be broken down into: fee simple and life estates. Fee simple estates can be broken down into: absolute and defeasible estates. Defeasible estates can be broken down into: fee simple determinable and condition subsequent estates.

Remainder Interest Scenario

Gary also has a fee simple estate. He grants a life estate to Margarita for the duration of her life. This makes Margarita's life the measuring life. Gary designates remainder interest to Manuel, Margarita's son. That makes Manuel the remainderman: He has a remainder interest in the property. For the duration of Margarita's life, Manuel's remainder interest is a future possessory interest. He will not possess the property until Margarita dies. If Manuel dies before Margarita, the interest will go to his heirs.

Reversionary Interest Scenario

Hal is the owner of a fee simple estate. He grants a life estate to Sandra for the duration of her life. That makes Sandra's life the measuring life. Hal does NOT designate a remainder interest in the property to a third party. So, even though Sandra's sister Valerie thought she would be receiving the property when Sandra died, property ownership will instead revert back to Hal or Hal's heirs. For the duration of Sandra's life, Hal's reversionary interest in the property is a future possessory interest because it relates to the property's future as a possession. In simpler terms, throughout Sandra's life, Hal still has an interest in the estate, just a future one: He will possess it again once she dies. He has a future possessory interest, also called a reversionary interest.

Freehold estates Leasehold estates

Interests, or estates, may be classified as either:

With fee simple determinable estates, property reverts to the original owner if requirements regarding property use are violated. Invent a determinable estate scenario in which a use condition is violated and the property reverts to the original owner.

Mary grants ownership of her beach house to her son Ben so long as he doesn't have his boyfriend over, whom she strongly dislikes. However, knowing that his mom lives a few hours away, Ben frequently brings his boyfriend over anyway. One day Mary plans a surprise visit to Ben's house and sees he has his boyfriend over. Since Ben violated a condition, the property reverts back to Mary.

Misha grants a life estate to Nancy and designates her son, Jarelle, as the remainderman. The estate is a 10-acre lot with a home, garage, and pool. Keeping in mind that an act of waste is an act that diminishes property value, invent an action that, if done by Nancy, would be an act of waste.

One day Nancy decides to take on painting the inside and outside of her home and garage without seeking professional help or watching any educational or step-by-step videos beforehand. She decides to use spray paint, but she doesn't buy painter's tape or any plastic coverings to shield her floors, furniture, and fixtures from the paint. This results in not only the walls being coated in paint, but everything else inside the house as well--including the once beautiful hardwood floors, windows, and fixtures. This would be considered an act of waste by Nancy.Misha grants a life estate to Nancy and designates her son, Jarelle, as the remainderman. The estate is a 10-acre lot with a home, garage, and pool. Keeping in mind that an act of waste is an act that diminishes property value, invent an action that, if done by Nancy, would be an act of waste.

remainder interest

The ___ is the interest in an estate that will pass to another party (other than the grantor) at the death of the person upon whom the life estate is based (the recipient of the future remainder interest is referred to as the remainderman). example: Consider Benjamin, the young man you met in the last example. Benjamin owns a fee simple estate. He grants a life estate to his grandmother, Diana. When Diana dies, Benjamin designates that the estate goes to Creed (Diana's husband).

reversionary interest

The ___ is the interest in an estate wherein, upon the death of the life estate owner, full ownership reverts back to the original owner (grantor). This may also be referred to as a right of reverter. example: Benjamin is a young man who owns a fee simple estate. He grants a life estate to his grandmother, Diana. When Diana dies, the estate goes back to Benjamin.

encumbrance(s)

The condition placed on the estate creates an ___ that "runs with the land." An ___ is a non-possessory interest in a property that burdens the title. To run with the land means that the condition is attached to the property, not the owner. If the property is sold, the condition will apply to the next owner, too. Let's say Geraldine has a possessory interest in a property as a fee simple defeasible estate (meaning Geraldine owns the property). However, Geraldine's Uncle Hoover is the one who granted the estate. When he did this, he attached the condition that Geraldine could own the property ONLY IF she cared for his 237 tabby cats. This condition, or ___, is not a personal vendetta against Geraldine - Uncle Hoover just wants to make sure his tabby cats are cared for. The condition is an ___: It runs with the land and it is from a non-possessory (Uncle Hoover doesn't own the land) interest. Just think of an ___ as a restriction or limitation on a property that might be annoying or limiting to an owner.

life estates and the three types

The main difference between a legal life estate and a conventional life estate is that state law creates legal life estates. Their main objective is to look out for a deceased person's survivors (concerning real estate, at least). Pro tip: To remember the difference between legal life estates and conventional life estates, remember the word legal: Legal life estates are mandated by legal action (state law). There are three types of legal life estates: Homestead Dower and Curtesy Elective share

freehold tenant

The owner of a freehold estate is called a ___. Depending on the type of freehold estate, ___ may also have a right of disposition, or right to convey, the interest they own.

Fee simple estate Life estate

There are two basic types of freehold estates:

Determinable Condition subsequent

There are two different kinds of defeasible estates: Their qualification as one or the other is determined by the language around the condition attached to the property.

freehold estate

When a land or real estate interest is described as a ___, it means that the individual with the interest has some degree of ownership for an undetermined or unspecified (and therefore unlimited) period of time. Leasehold estates are considered more temporary, as they usually last for a specific duration of time.

act of waste

While life estate tenants (like the ones in the examples we just went over) are entitled to the bundle of rights (of ownership), including both possession and the ordinary use and profits arising from ownership, their rights are not absolute. They must take care that the exercise of their present rights do not encroach on the future rights of the remainderman. If the life tenant were to do anything to diminish the value of the property, they would be committing an ___, for which they could be held liable. For Example Let's say Angela owns a cabin on the lake in the woods. It is quiet, peaceful, and a pretty fun vacation home - she even owns three jet skis! Angela grants a life estate to her son, Brad. One day, the local deli gets Brad's bagel order wrong and Brad, in a fit of rage, burns down the cabin and destroys the jet skis with a hammer. Brad's behavior is not okay for lots of reasons, but one of those reasons is because Brad does NOT have the right to destroy Angela's peaceful cabin. That would be an act of waste (and an indication that he really, really needs to get into therapy).

elective share laws

___ are state laws that let a spouse make a claim to their deceased spouse's property, despite what is in the will. The surviving spouse has to make a claim to the property and often gets a percentage of the value. If no claim is made, the estate passes per the will or other applicable law. ___ specifics: Surviving spouses are eligible to get a percentage of their dead spouse's property, even if they were not included in the will, IF the surviving spouse makes a claim on time (if they don't, the estate goes to legal heirs).

homestead laws

___ are state laws that prevent a person's primary residence from being forcibly sold to pay certain kinds of debts, or to give a surviving spouse a home if one spouse dies and leaves debt behind. ___ specifics: Primary residences with associated debts are exempt from being required to be sold to pay for debts IF: - The family lives in the homestead. - The property is NOT sold or abandoned. The estate can be conveyed to pay the debt if both spouses agree on conveyance. The debt exemption lasts for the duration of the life of the head of house (and then passes to the children, etc.). The exemption may be automatic or owners may need to ask for it, depending on the situation. Note: Not all debts are exempt under ___. A primary residence can still be forcibly sold to satisfy tax, seller financing, home improvement, and mortgage debts.

dower and curtesy (dower) (curtesy)

___ both refer to the right of a spouse to inherit a portion of the property held in their spouse's name after that spouse dies; ___ is the word used for women, ___ for men. ___ specifics: Traditionally, ___ existed to give women the ability to retain part of their deceased spouse's estate, even when it wasn't legal for women to own property. It also gave living spouses claim to part of their deceased spouse's estate even if they weren't granted a portion in the will (you can't cut a spouse out of your will even if you want to.) Laws varied by municipality, but typically a spouse could claim 1/3 of an estate, and surviving children would get the other 2/3. ___ are not really used any more (they are not used in Pennsylvania). Most ___ laws have been replaced by community property laws or elective share laws.

recap

fee simple absolute: the most common way people take ownership of a property--when you own that property outright and you can control everything about it fee simple defeasible: fee simple determinable- somebody owns that property as long as certain conditions are maintained or not maintained -woman gifts a property to her church so long as nobody drinks there-whoever she designates, or she if she still alive has whats called a right of reverter -the person who holds this right gets the property if the church breaks that condition -example: church fundraiser has alcohol, the property automatically reverts back to her if she finds out about it, she doesn't even have to challenge it in court -dead giveaways of this kind of ownership on a deed: "so long as" "while" "during" 'as long as" fee simple defeasible to condition subsequent: almost the same thing, but the person who holds the right of reverter does have to take that challenge to court to get the property back. if they can prove that condition was broken, it is very likely the court will rule in their favor and that they'll get that property back life estate: this is where someone is gifted or sold too, but someone is given a property for the duration of their life when they die, that property is passed down according to whoever gifted the life estate's pre-determined directions example: mother has two sons, one with a developmental disability who needs help being taken care of she could gift property to two sons based on the life of the son who needs to be taken care of why would she do that? this gives incentive to the brother to take care of him and keep him alive and in the house -this is an example of pur autre vie- that is not an inheritable ownership, so when the person who owns the property for their lifetime dies, it does not pass down how they want it to-it passes down according to the pre-determined directions from the person who gifted that property in the first place

recap

reversionary interest: an interest in which, upon the death of the life estate owner, full ownership reverts back to the original fee simple owner Marco allows Grant to use his property. When Grant dies, Marco regains possession of the property. remainder interest: an interest in an estate that will pass to another party at the death of the person upon whom the life estate is based Leo owns and occupies a property but, when Leo dies, the property will pass on to Tiana (a third party). fee simple estate: a type of estate that grants the most unlimited, most absolute interest in real property a type of estate that is of indefinite duration, is freely transferable, and is freely inheritable life estate: a type of estate limited to the duration of a measuring life a type of estate that allows for remainder or reversionary interests

estate

when someone holds a possessory interest in real property, it is said that they have an ___. Possessory implies that a possession exists, and you know what all possessions have? An owner. A possessory interest or ___ is a present interest (I own this property right now! I'm living in it! I have the right to occupy it!) A non-possessory interest or estate is a future interest. (I will inherit and own this property in 10 years! I can't wait to change the curtains.)