property

Example 36: Oliver conveys Blackacre "to Anna (fee simple), but if (conditional language) the land is used for commercial purposes, to Ben." 1. What interest does Anna have? 2. Under what condition will Ben take the property? 3. Whose interest does Ben divest? 4. What interest does Ben have?

1. A fee simple - not absolute but subject to ben's executory interest. So fee simple subject to an executory interest. 2. If the land is used for commercial purposes. If land is used for commercial purposes, ben will divest. 3. Anna's, who is a prior grantee. She received from oliver so shes a grantee. 4. A shifting executory interest. Because ben is divesting another transferee, not the grantor.

Example 35: Oliver conveys Blackacre "to Anna for life, then to Ben one year after Anna's death." What interest does Anna have? What happens immediately after Anna's death? Whose interest does Ben divest? What interest does Ben have?

1. A life estate. 2. It cant go to ben. Because ben doesn't get for a year so must go back to grantor or oliver. Oliver has 1 year reversion. 3. Oliver's, because ben must wait a year before taking it. Goes to oliver then ben divests oliver. 4. A springing executory interest, because divesting the grantor.

Three kinds of waste:

1. Affirmative waste: Waste caused by voluntary conduct, which causes a decrease in value of the property. Example 25: Dumping hazardous materials on the property 2. Permissive waste: Waste caused by neglect toward the property, which causes a decrease in value. Example 26: Harm caused to property through tenant's failure to take action after a storm. That will be a problem for the future interest holder. 3. Ameliorative waste: Special situation where a life tenant or other person in possession changes the use of the property and actually increases the value of the property. Example 27: Renovation of a house, construction of a dam, fixing a fence - all of these things changing property so technically waste but actually increasing value of the property.

Different ways property can be transferred (i.e., alienated):

1. By sale Example 1: Oliver sells his home to Anna for $325,000. 2. Gift: Example 2: Oliver gives his lucky pen to Anna, "in the hope that it will bring her as much luck as it has brought him." 3. Divise - it's a will or way of transferring by will. Example 3: Oliver dies in a tragic fishing accident. In his will, he gives his stamp collection to his wife Anna. When is this gift effective? At Oliver's death. Gift becomes live at death. Note 1: Gifts in a will are effective when the decedent dies. Some problems examine that gifts happen at life intervivos. Fact that gift happens at death - time difference may be important sometimes about when interests are created. If creating will during life, nothing in will passes until death. 4. Intestate succession: Example 4: Oliver dies without a will. He is survived solely by his wife, Anna, who is his heir at law (heir is a person who survives the decedent and takes by intestate succession).

Exceptions to RAP

1. Charities o RAP does not apply to a gift from one charity to another charity - rap doesn't get in way of charitable giving. o The gift to the alternate charity is not subject to RAP 2. Options o RAP does not apply to an option held by a current tenant to purchase a fee interest in the leasehold property. o Nor does it apply to an option (or right of first refusal) in a commercial transaction.

concurrent estates - definition

1. Definition o Ownership or possession of real property by two or more persons simultaneously - two people have ownership interest at same time. Not consecutive ownership, like estate and future interest. But rather simultaneous. Example 46: Oliver conveys Blackacre "to Anna and Ben and their heirs." Anna and Ben are concurrent owners of Blackacre. Owners at same time.

Example 30: Oliver conveys Blackacre "to Anna for life (life estate), then to Ben if Ben survives Anna." What kind of remainder does Ben have? Is Ben an ascertainable grantee? Is there a condition precedent?

1. Its a contingent remainder. 2. Yes, he can be identified. 3. Yes, Ben must survive Anna. Only way ben gets is if he outlives anna. Ben has a contingent remainder. Oliver has a reversion. Why does oliver have that? Oliver has reversion incase ben doesnt survive anna. If ben dies before anna, anna dies and property has to go somewhere. Itll go back to oliver because must account at all times for where property goes. So if ben doesn't satisfy condition precedent, property goes back to oliver.

Possibility of Reverter

1. Possibility of Reverter o Future interest held by the grantor (person creating property interest) following a fee simple determinable. o Interest vests automatically after the durational period ends. Moment durational period is up, it vests back in grantor and goes backward to person creating it. Example 13: Oliver conveys Blackacre "to Anna and her heirs (fee simple language), so long as the land is used as a public park (durational language saying its fee simple determinable)."

Method—When, What, Who? 1. When

1. When: Identifying when the interests are created - RAP cares about when interest is created. Must be able to pinpoint when that happens. Rule is different based on whether its created inter vivos vs created by will because timeline judged differently. So must ask whether during life or by will. o Inter vivos transfers: Interests created at time of the grant o Devise (will): Interests created at testator's death, not when the will is drafted - may have created will during life but gifts in will don't go live till testator dies. Drafting of will doesn't matter, its when dead person dies. 2.

2. What's the goal of the rule? 3. Why 21 years?

2. o Testing for certainty; o Operates like a statute of limitations for contingent future interests. 3. o Approximately two generations—a life plus 21 years; o Beyond that, we can't say what will happen. So people can tie up their wealth and property for 2 generations but after that need some certainty. So at least one person alive now plus 21 years (Which is second generation). After that, must know with certainty whether interest vests or fails. If question cannot be answered, bad future interest exists because it will be uncertain for too long. So all about time period - does it vest or fail within the time period? If outside the period, its bad and bad from get go solely because courts don't like uncertainty.

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 (or his successor in interest). The grant contained conditional language (i.e., "but if"), indicating a fee simple subject to a condition subsequent or subject to an executory interest. Because the attorney (the grantor) did not retain the right to terminate the estate, and instead gave the nephew an executory interest, the grant was a fee simple subject to an executory interest. Accordingly, neither the attorney nor the nephew had a possibility of reverter.

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, such as "provided that." With a fee simple subject to condition subsequent, the grantor may terminate the estate upon occurrence of the stated condition. If grantor did not retain the right to terminate the estate, but rather gives someone else an executory interest, it becomes fee simple subject to an executory interest.

fee simple subject to an executory interest

A fee simple subject to an executory interest (sometimes referred to as a "fee simple subject to an executory limitation") is a present fee simple estate that is limited in duration by specific conditional language (e.g., "provided that," "on condition that," "but if") such that, upon the occurrence of the specified condition, title will automatically pass to a third party (i.e., someone other than the grantor or the holder of the present fee). The future interest held by the third party is an executory interest. Unlike the corresponding future interest in the grantor (right of entry), the executory interest automatically comes into existence; there is no need for the third party to take any action (e.g., an eviction action). In this case, the niece had a fee simple subject to an executory interest due to the conditional language in the grant. The nephew had an executory interest that would become a possessory interest if the condition was not satisfied.

Example 28: Oliver conveys Blackacre "to Anna for life, then to Ben. (ben gets after anna dies)" What does Anna have?

A life estate. Is Ben an ascertainable grantee? Yes, why? Hes identified by name. Is there a condition precedent (Does ben have to do anything in order to vest)? No, doesn't say then to ben if ben moves somewhere or does something. Ben is good to go as is - no condition precedent. Ben has a vested remainder. Ascertained and no condition precedent. Note 7: If the holder of a vested remainder dies, the interest passes to the holder's heirs. Because vested remainder is inheritable. That's key of it vesting - value of it vesting is that you can do anything to it that you want - you can pass it on to relatives after you die.

promissory restraint on alienation

A promissory restraint on alienation, such as a right of first refusal, may be enforceable by an injunction if it is reasonable. The organization's right of first refusal was a reasonable provision in a commercial lease and consequently is enforceable through an injunction compelling the owner to sell the building to the organization. The Rule Against Perpetuities does not apply to a right of first refusal that is granted to a lessee in conjunction with a lease. The civic organization is seeking to enforce its right to purchase the building based on its own right of first refusal and thus it would not constitute an encumbrance on the title that the organization would receive. An undisclosed right of first refusal would constitute an encumbrance on marketable title for another purchaser, such as the friend. Whether the right of first refusal is a covenant running with land, which affects the rights of subsequent owners, is irrelevant because the owner and the civic organization are the original parties to the agreement.

race-notice statute

A race-notice statute requires a subsequent purchaser to take the interest without notice of a prior conflicting interest and be the first to record. Although grantees who acquire title to property by gift, intestacy, or devise are not protected by the recording act against prior claims, grantors who are protected by the recording act protect (or "shelter") their grantees who would otherwise be unprotected. The woman is protected by the race-notice act because she purchased the property without notice of its prior transfer to the charity and recorded her deed before the charity recorded its deed. As a protected purchaser of the property, she shelters her son, who as a donee of the property, would otherwise not be protected by the recording act. Although the charity did record its deed before the son recorded his deed, the charity did not record its deed before the woman recorded her deed. The son's rights to the property depend on his mother's rights to the property, and against her rights, the charity's rights to the property are subordinate pursuant to the recording act. The son, although not a purchaser for value of the property, is protected under the shelter rule. A recording act, regardless of the type of act, protects a grantee who promptly records his interest, regardless of whether the grantee is a purchaser for value or one who acquires title to property by gift, intestacy, or devise, against persons who acquire an interest in the property after the grantee has recorded his interest. Consequently, the charity does not have priority over the son because the charity failed to record its interest before the woman recorded her interest, and not because, as this answer choice indicates, the charity was a donee taker of the property.

Example 29: Oliver conveys Blackacre "to A for life (life estate), then to A's firstborn grandchild." At the time of the conveyance, A does not have any grandchildren. What interest does the firstborn grandchild have?

A remainder (following a's life estate). Is the firstborn grandchild an ascertainable grantee (question to figure out if its vested)? No. cannot be named because they don't exist yet. They may never even be born. The firstborn grandchild has a contingent remainder. Not vested because person doesn't exist yet. Note 8: If a contingent remainder does not vest before it becomes possessory (e.g., A does not have any grandchildren before A dies), the grantor has a reversion. Has to be the case because for example, if grandchild is never born, it will have to return to the grantor as a reversion. That's situation where theres multiple future interests. Either going out to transferee or going back to the grantor.

Remainders - future interests

A remainder is a future interest that follows what present possessory estate? Life estate. o A remainder cannot follow a vested fee simple. Why? A future interest following a vested fee simple would have to divest the prior interest (the fee simple) but a remainder does not function that way because it instead waits for the prior interest to end. Remainder usually is a passive interest and never cuts short prior interest. Its patient and waits so a vested fee has to be cut short. Remainder never cuts short. Remainder can only follow estate ending naturally on its own so its geared towards the life estate. • Can be vested or contingent - it matters because of Rule against perpetutities. • RAP generally applies only to contingent remainders. o Vested Remainder—an interest that is: 1) Given to an ascertained grantee (i.e., someone who can be identified); and 2) Not subject to a condition precedent (i.e., there is no condition that must be satisfied in order for the interest to vest). If the remainder fails either 1 or 2, it is a contingent remainder.

Example 37: Oliver conveys Blackacre "to Anna after she is admitted to the bar." What interest does Anna have?

A springing executory interest. Why? Because anna takes from the grantor when something happens. She has a future interest when the interest is created but must wait for something to happen. Once thing happens, she divests grantor so its a springing executory interest. Whose interest does Anna divest? Oliver, the grantor. What interest does Oliver have? A fee simple subject to executory interest. His fee simple is being modified by her future interest. Exam Tip 2: Count the parties: If there are two parties (Grantor + Grantee), it is most likely a springing executory interest because the grantee will divest the grantor. If there are three parties (Grantor + Grantee + Grantee), it is most likely a shifting executory interest because a grantee will divest another grantee (the executory interest will shift from one grantee to another).

tenancy for years

A tenancy for years is an estate measured by a fixed and ascertainable amount of time. Termination occurs automatically upon the expiration of the term; no notice is required. Any right to renew the agreement must be explicitly set out in the lease. The owner and the manufacturer had a tenancy for years. This tenancy expired at the end of its term, which was one year. The owner was not required to give notice of its termination. Consequently, by remaining on the premises after the termination of the tenancy for years, the manufacturer became a holdover tenant (i.e., a tenant at sufferance). Because the owner refused to accept the manufacturer's tender of a rental payment, a new tenancy was not created. Therefore, the owner may file a legal action to evict the manufacturer without further notice because the manufacturer, by remaining in the warehouse past the expiration of the one-year term of the lease, is wrongfully in possession of the premises. Although a landlord must give a tenant at will a reasonable time in which to vacate the premises, the manufacturer is not a tenant at will. There was no express or implied agreement between the owner and the manufacturer for the manufacturer to continue to occupy the warehouse. Although a landlord can create a periodic tenancy by accepting a tenant's tender of a rental payment after the expiration of the lease, here the owner did not accept the manufacturer's tendered rental payment. A landlord, by accepting rent after the termination of a lease, creates a periodic tenancy, even when the prior tenancy was a tenancy for years. However, the owner did not accept the manufacturer's rental payment in this case. Thus, neither a tenancy for years nor a periodic tenancy was created. In addition, although six months' notice is required when a year-to-year periodic tenancy exists, a landlord is not required to give notice of the termination of a tenancy for years.

implied covenant of marketable title

Absent contrary language, an implied covenant of marketable title (i.e., a title free from defects) is part of a contract to sell real property. However, under the doctrine of merger, obligations contained in the contract of sale, including the seller's duty to deliver marketable title, are merged into the deed and cannot thereafter be enforced through a breach of contract action. Consequently, the speculator cannot sue the original owner for a breach of the covenant to deliver marketable title. Although there is an implied covenant of marketable title in a contract to sell real property, this covenant merges into the deed and cannot thereafter be enforced through a breach of contract action. Although there is an implied covenant of marketable title in a contract to sell real property, this covenant merges into the deed and cannot thereafter be enforced through a breach of contract action. Moreover, because the original owner transferred the condo unit by a quitclaim deed, the original owner did not give the speculator any general title warranties, include the warranty against encumbrances. The contract between the original owner and the speculator is treated as containing a covenant of marketability even though the contract did not specifically provide for this covenant. This covenant is implied even in the case of a contract that calls for transfer by a quitclaim deed. However, because of the doctrine of merger, the speculator cannot now sue on the breach of this covenant.

default on mortgage obligation - equity of redemption

After default on a mortgage obligation, but before a foreclosure sale, the mortgagor may regain clear title to the property under the doctrine of equity of redemption. The mortgagor must pay the amount of the loan obligation currently owed, which, if there is an acceleration clause, can be the full amount of the unpaid loan obligation, plus any accrued interest. The woman defaulted on the loan but the bank has not yet conducted a foreclosure sale. Thus, the woman can obtain clear title to the property after paying the entire amount of the outstanding debt. Although the bank has already initiated foreclosure proceedings, it has not yet sold the property. Therefore, the woman can still exercise her equitable right to redeem the property. The woman has timely exercised her equitable right of redemption. The bank cannot proceed with the sale after the woman has asserted this right. The statutory right of redemption arises after a foreclosure sale. A jurisdiction may provide this right by statute to allow additional time for the mortgagor to compensate the party who purchased the property at the foreclosure sale and reclaim the property. The foreclosure sale had not yet taken place and there are no facts that indicate this jurisdiction permits statutory redemption.

assignment - privity of estate

An assignment is a complete transfer of the tenant's remaining lease term. Assignee tenants are in privity of estate with the landlord, and thus they are liable to the landlord for the rent and any other covenants in the lease that run with the lease. The student's transfer of all of his rights under the lease to the employee constituted an assignment rather than a sublease because the transfer was for the full remaining term of the lease (i.e., the eight months from January through August), and the student retained no interest in the property. Consequently, the employee, as an assignee tenant, was in privity of estate with the professor-landlord, and became liable to the professor-landlord for the rent for the remaining term of the lease, because the obligation to pay rent is a covenant in a lease that runs with the lease. Because the professor-landlord was unable to mitigate damages by renting out the unit for the remaining three months of the lease, the employee is liable to the professor-landlord for the full amount of the rent for those three months, which is $3,000. Although the employee did not enter into a lease agreement with the professor-landlord and consequently was not in contractual privity with the professor-landlord, the employee was in privity of estate with the professor-landlord. As such, the employee was liable to the professor-landlord for the rent for the remaining term of the lease. Even though the student remained liable to the professor-landlord for the rent under the terms of the lease, the student's liability does not absolve the employee of her liability to the professor-landlord as an assignee. The employee's liability to the professor-landlord stems from the student's assignment of his leasehold interest in the condominium unit to the employee, making the employee an assignee, in privity of estate with the landlord. The employee's vacating the unit does not terminate this privity.

Easement by necessity

An easement by necessity arises when property is virtually useless without the benefit of the easement across neighboring property, such as when it is landlocked. In order for an easement by necessity to exist, there must be a necessity, the dominant and servient estates must have once been owned by the same person, and the necessity must have arisen at the time that the property was severed and the two estates were created. These requirements are met: the stranger cannot access his land without the easement, both the stranger's and colleague's parcels were under the common ownership, and the necessity arose at the time that the sister sold the parcel to the stranger. An easement by necessity need not be recorded. In fact, it need not even be written. An easement by necessity is binding on the servient estate as long as the necessity exists. While merger of the dominant and servient estates did terminate the easement granted by the sister to her brother, the stranger enjoys an easement by necessity upon the separation of the parcels again. Although the stranger's notice of the brother's easement might have prevented the enforcement of that easement against the stranger if the easement had not been terminated through merger, the stranger's easement is based on necessity; it is not necessary that the colleague have notice of the easement.

Problem 1: Oliver (grantor) conveys Blackacre "to Anna."

Anna has a fee simple absolute. Oliver has nothing (because he gave away everything he had). Key language is "to anna". The words say whos receiving property but also what she receives because theres nothing specific language saying for life or saying so long as or anything like that. So base line rule is to presume grantor conveys everything they have unless it explicitly says otherwise. Theres nothing said so anna takes fee simple absolute. Note 6: Always presume a party conveys the most that it has to convey.

Problem 2: Oliver conveys Blackacre "to Anna while (this is important word - "while" is classic durational language) the land is used for school purposes."

Anna has a fee simple determinable. Oliver has a possibility of reverter. It looks like anna is getting a fee simple but the fee simple is not absolute. Fee simple is for a durational period because while is durational language. So its fee simple determinable. Fee simple determinable is capable of lasting forever but can also be cut short. Because it can be cut short, its not everything that exists. Slice is taken out, so who has the future interest? Oliver does. He didn't give away everything he could, hes holding onto something. What future interest is held by a grantor and follows a fee simple determinable? Its possibility of reverter.

Problem 4: Oliver conveys Blackacre "to Anna, but if Anna gets a pet, Oliver may re-enter and re-take."

Anna has a fee simple subject to condition subsequent. Oliver has a right of entry. "To anna" - fee simple language - equivalent of "to anna and her heirs". Followed by "but if" - classic conditional language saying fee simple is subject to a condition. "if anna gets a pet" - that's a condition subsequent - condition explaining under what circumstances the fee simple may end. "oliver may re-enter and re-take" - that's a right of entry. Why does oliver have a future interest? He gave away most of what he had - not all because he held onto something though. If she gets a pet, he has the ability to exercise that interest. when he does that, he will have a fee simple absolute. Up until then, he has a right of entry. So must identify who has it now, who will get it later, what has to happen for them to get it later.

Problem 3: Oliver conveys Blackacre "to Anna while the land is used for school purposes, then to Ben."

Anna has a fee simple, which is followed by executory interest. So she has fee simple subject to an executory interest. Ben has an executory interest. Why? He has future interest capable of cutting short a prior interest. When does it cut short? When land isn't used for school purposes. Oliver has nothing. Oliver gave away everything. 2 points - 1. Whats possessory estate? Key word is "while" - durational language indicates durational period. 2. "then to ben" - ben has executory interest. Oliver had whole thing, then gave to anna, didn't give everything to her though and held piece. But rather than keeping it for himself he gave it out to ben, to a third party. So oliver gave away everything he had and he has nothing. Always ask who had it, who did they give it to, and did they keep a piece. And if they didn't keep a piece, where did it go. Because must identify all parts of the interest over time.

Example 44: Oliver conveys "to Anna for life, then to Anna's grandchildren."

Anna has one grandchild, Ben. It is possible that other grandchildren will be born more than 21 years after Anna or Ben's death. Why? Anna still alive and can have more kids. Without the Rule of Convenience, the gift to Ben is void under RAP. Why? Because of all or nothing rule, and bad is to one member of class means bad as to all. With rule of convenience, class can be closed. When to close it? Trying to save future interest. When will future interest holder be entitled to immediate possession? At annas death. So close it there. When anna dies, will treat class as closed. Close it using the rule of convenience. Its interpretive, so one can decide to do that because trying to prevent other kids from spoiling the pot for ben. There is rap violation and want to prevent it so close the class with the rule of convenience. With the Rule of Convenience, Ben will take at annas death. When Anna dies, the class treated as closed.

Example 5: Oliver transfers Blackacre "to Anna for life, then to Ben." Who has the right to possession presently? Who has the right to possession in the future?

Anna. She has life estate. Ben, he gets when anna dies.

Example 32: Oliver conveys "to Anna for life (life estate), then to Ben's children (doesn't say to first child, but to bens children)." Ben has one child. Why is it class gift?

Ben can have multiple children. Fact he has one now doesn't prevent him from having more in the future. What would have to happen for ben to stop having children? He would have to die. Because in world of RAP and future interests, presumed everyone can have kids until they die. When will this class close under the Rule of Convenience? On anna's death. Why on annas death? Whats hard about rule of convenience and also key to understanding is that class closes when anyone is entitled to immediate possession. Bens child has vested so class is not important so much as idea that bens child is vested so when anna dies and life estate ends, can go to bens child immediately so class is shut down then. Moment life estate holder dies, so don't have to worry about RAP. Close class when life estate ends - that's annas death. That's the rule of convenience.

Example 23: Oliver conveys Blackacre "to Anna for life, then to Ben." During Anna's life, Ben has a remainder. What happens when Anna dies?

Ben's remainder vests and he takes possession in fee simple. Oliver has nothing because Anna has the present interest (life estate) and Ben has the future interest. Oliver gets nothing.

Example 8: Oliver conveys Blackacre "to Anna forever." What does Anna have?

Can make argument that it's a life estate. Since not clear, probably fee simple absolute.

The life estate

Definition • Present estate that is limited by a life. • Whose life? Example 17: Oliver conveys Blackacre "to Anna for life." This life estate is measured against anna's life. Ends when anna dies. Example 18: Oliver conveys Blackacre "to Anna for Ben's life." Anna's life estate is measured against ben's life. This is known as a life estate "pur autre vie" (meaning measured against the life of someone else). Ends when ben dies

Equitable servitudes

Equitable servitudes are covenants about land use that are enforced at equity by injunction. For a servitude to be enforced at equity, it must be in writing and meet the following requirements: (i) there must be intent for the restriction to be enforceable by and against successors in interest, (ii) the servitude must touch and concern the land, and (iii) if the person against whom the servitude is to be enforced is a purchaser, he must have notice (whether actual, record, or inquiry notice) of the servitude. There is a valid equitable servitude on the 20-acre subdivision. The restriction is contained in the deed between the original parties. The phrase "all owners, their heirs and assigns" shows the parties' intent that the benefits and burdens run with the land. The restriction touches and concerns the land because it affects the owners as property owners, not merely individuals. Finally, subsequent purchasers had notice of the restriction in their deeds. However, the neighbor cannot enforce the equitable servitude because she does not own property in that subdivision. The benefit of enforcing an equitable servitude is held only by successors in interest to the original deed. Although the original parties did intend for the rights and duties to run with the land by their language, "all owners, heirs and assigns," this would not give the neighbor, who does not own property in the subdivision, the right to prevent the woman from building the apartment. Equitable servitudes are not affected by the Rule Against Perpetuities. However, the mere fact that the restriction is not subject to the Rule does not mean the neighbor has a right to enforce the restriction. The equitable servitude prevails over the zoning ordinance in terms of its limitations. Compliance with a zoning restriction does not protect an owner from a suit for breach of a covenant and compliance with a covenant does not protect an owner from a zoning violation action. Another owner in the same subdivision could enforce the equitable servitude against the woman.

Estates in Land Ownership interests

Estates in Land Ownership interests - (note - you don't own thing, but rather "estate in the thing": Divided in time between present interests (who has right to possess now) and future interests (who has right to possess in future) • Key distinction is timing of possession - who has right to it now.

fee simple determinable vs. fee simple subject to condition subsequent

Fee Simple Determinable • Limited by specific durational language Example 10: Oliver conveys Blackacre "to Anna so long as (classic durational language - "so long as") the land is used as a farm." • Examples of durational language include: o "While the land is used as a farm;" o "During its use as a farm;" o "Until it is no longer used as a farm." Note 3: The fee simple lasts while the period is in play (e.g., while used as a farm), but as soon as the period ends (e.g., when the land is no longer used as a farm), the fee simple ends. Fee Simple Subject to Condition Subsequent • Limited by specific conditional language - contrast conditional language with durational language. Example 11: Oliver conveys Blackacre "to Anna, but if the land is not farmed, Oliver may re-enter and re-take the property." Words "but if" are classic conditional language. Contrasting with durational language from fee simple determinable (which is more like "so long as" or "while"). • Examples of conditional language include: o "Provided that the land is not farmed;" o "On the condition that the land is not farmed." • Focus on the language to the grantor: Suggests that the grantor must exercise a right in order to take possession. Grantor must do something. When is oliver entitled to possession? 2 things have to happen: 1. Condition must be met. 2. He has to re-take and exercise that right. Example 12: Oliver conveys Blackacre "to Anna, but if the land is not farmed, Oliver may re-enter and re-take the property." When, if ever, is Oliver entitled to possession? When the condition is met and Oliver reclaims it.

Example 40: Oliver conveys "to Anna for life, then to Anna's first child who reaches the age of 22."

Future interest of contingent remainder - first child who reaches 22. Don't know who that is yet, theyre not ascertained and maybe no one satisfies condition since problem doesn't say anyone has reached. Does rap apply to contingent remainders? It does. Rap analysis: When were interests created? At conveyance. What: continent remainder and rap applies. Who: who are the relevant lives? Olvier was alive - as grantor he created. And anna alive. She has lfie esttae but also shell be giving birth to child reaching 22, who is person that vests. So parties are oliver and anna. When is last moment in time itll be known whether interest vests or fails? Child msut reach 22. Could be scenario where anna has child and anna dies. Anna was alive when interest was created, and olvier was too, but child born after was not so they cannot be a validating life. because to be validating life you must be alive when interest is created. So any child of anna born after this cannot validate future interest. Could be scenario where anna has child and then dies, and it takes more than 21 years for child to vest because they must make it to 22. So story exists that is outside perpetuity period because annas life plus 21 years. So can be story where child born and anna dies right after that so takes more than 21 yrs for child to reach 22. Story outside perpetuities problem - if story exists where interest vests outside perpetuity problem, that's a violation of rap. If story exists, that's a bad future interest. Too much uncertainty. Its possible it will vest within period, but because you can tell a story where it vests outside the period, that future interest is bad and it must be struck. This conveyance violates RAP. It is a contingent remainder, and possible for the contingent remainder in Anna's first child to vest more than 21 years after Anna's life. Anna's first child, even if alive, is not a validating life because the child could die. Result—strike the offending interest: Oliver conveys to Anna for life, then to Anna's first child who reaches the age of 22 (bolded part gets struck out). Its like it was never there to begin with. So oliver conveys to anna for life. Anna's interest: A life estate. Anna's first child's interest: Nothing. Oliver interest: A reversion - why? Because child cant take remainder anymore, so after annas life estate ends, it must go back to oliver. So should be noted that when interest for someone disappears because of rap, everyone elses interest is affected too.

How to Spot a Waste Problem

How to Spot a Waste Problem (is there a person who has a claim whos out of possession and may have interest in preventing or encouraging certain behavior?): 1. Do multiple parties have simultaneous interests (interest in property at same time, even if different types of interests), (e.g., life tenant, remainder, future interests, landlord v. tenant)? 2. Is there a change in the value of the property due to the actions/inactions of the party in possession? 3. Will the waste substantially change the interest taken by the party out of possession - (is what person is doing now going to affect other persons interest later?)?

transferee-buyer takes title "subject to" an existing mortgage obligation

If the transferee-buyer takes title "subject to" an existing mortgage obligation, then the transferee-buyer is not personally liable upon default. The buyer purchased the house subject to the mortgage held by the corporation. As a result, the buyer did not assume personal responsibility for the loan. Therefore, the buyer is not personally liable to the corporation for repayment of the mortgage loan. Although a due-on-sale clause may constitute a restraint on the alienation of property, such a clause is specifically permitted by federal law, subject to several restrictions on residential real property, none of which are applicable in this situation. It is true that the buyer is not in privity of estate with the corporation. Privity of estate requires both parties to an agreement to share an interest in the property that is the subject of the agreement. There is no agreement between the buyer and the corporation. However, the fact that the buyer is not in privity of estate with the corporation has no effect on the buyer's liability for the outstanding amount of the loan. Although the officer remains personally liable for repayment of the outstanding amount of the loan, this liability does not automatically shield the buyer from personal liability with regard to the loan. Had the buyer agreed to assume the mortgage obligation, the buyer, as well as the officer, would have been personally liable for repayment of the outstanding amount of the loan.

adverse possession requirements

In order to acquire ownership of land by adverse possession, the possession must be continuous, open and notorious, actual, exclusive, and hostile. To be exclusive, the possessor cannot share the land with the actual owner. The owner was aware that the woman planted crops on his land, and he walked through her crops on a weekly basis. The owner never relinquished his own possession of the land, even though the woman regularly planted crops on it. Had the woman been able to establish ownership by adverse possession, the son would have been able to tack her possession to his own. An adverse possessor may tack on his predecessor's time in order to satisfy the statutory period, as long as there is privity between successive possessors. Privity is satisfied if the possessor takes by any non-hostile means (such as descent, devise, contract, or deed). There would have been privity between the woman and her son because the property passed by will to the son. The woman would have been able to possess the land incrementally; however, her ownership of each area of land would have been incremental, as well. In any event, the woman did not meet the exclusive or adverse requirements for adverse possession, as explained above. Seasonal use of the land is sufficiently continuous to satisfy the continuous requirement if it is consistent with the type of property being used. It is normal for farmland to be used only seasonally.

Example 9: Oliver conveys Blackacre "to Anna, my hope and wish being that on her death, Anna will give the property to her son, Ben." What interest does Anna have? What interest does Ben have?

It's a fee simple. Ben has nothing. Why? Words like my hope or wish are called precatory. Need actual intent. If it just said to anna that's a fee simple. If it said to anna then ben theres words of intent that would change what interest is, but with my hope and wish, theres nothing there.

Example 21: Oliver conveys Blackacre "to Anna for life." Anna dies, leaving her son Ben as her sole heir. Does Ben inherit Anna's life estate?

No, Anna's interest ended on her death. Not inheritable so cannot be divised.

fee simple subject to condition subsequent vs. fee simple subject to executory interest

Note 5: Look to who holds the future interest to distinguish a fee simple subject to executory interest (third party holds) from a fee simple subject to a condition subsequent (grantor holds).

Example 6: Oliver transfers Blackacre "to Anna once she passes the bar exam." Who has the right to possession presently? Who has the right to possession in the future?

Oliver, only goes to Anna after future event. Anna, dividing ownership over time.

Life tenants have the obligation to...

Pay all ordinary taxes on the land and interest on the mortgage to the extent he receives a financial benefit from the property. When the life tenant occupies the property, his financial benefit is measured by the fair market rental value of the property. When the holder of a future interest pays the taxes because the life tenant fails to do so, the holder can bring an action against the life tenant personally to recover these payments from the life tenant, up to the value of the financial benefit the life tenant received from the property. Because the property in question is not producing income but has a reasonable rental value of $48,000 per year ($4,000 per month), the life tenant is liable to the holder of the remainder interest for the full amount of the taxes paid by the holder of the remainder interest, $10,000, as that amount does not exceed the reasonable rental value. Life tenants are not necessarily responsible for paying the full amount of taxes assessed on the property. Life tenants have the obligation to pay all ordinary taxes on the land to the extent he receives a financial benefit from the property. If the life tenant occupies the property, as in this case, the life tenant is responsible for taxes and mortgage interest to the extent of the reasonable rental value of the land.

Right of Entry (also called power of termination)

Right of Entry (also called power of termination) o Future interest held by the grantor (person creating interest) following a fee simple subject to condition subsequent. o Does not vest automatically (unlike reverter which vests automatically); it must be reclaimed (must exercise it). Example 14: Oliver conveys Blackacre "to Anna and her heirs (fee simple language), but if (conditional language) the land is not used as a public park, Oliver can re-enter and re-take." Oliver has a right of entry. In order for Oliver's interest to become possessory, Oliver must exercise the right of entry and reclaim the interest. Exercise right by going to court.

Example 45: Oliver conveys Blackacre "to the Donald McRonald House so long as the property is used to support cancer patients and their families, then to the Glaser Elizabeth Pediatric AIDS Fund."

So charitable gift and another charitable gift. Problem is that second executory interest violates RAP. But because courts are charitable minded and don't want to prevent that, they will not apply rap to executory interest and allow charity to charity giving. The AIDS Fund's executory interest, which normally would violate RAP, is valid because RAP does not apply to charity-to-charity gifts.

Someone must be in...

Someone must be in possession of the property at all times. Cant have gap in possession, must be able to say who has it now and who has later.

License

The owner's oral promise to his neighbor constituted a license, which is a non-possessory right to enter the land of another for some delineated purpose. Generally, a license is revoked upon the transfer of the servient estate. The owner sold the house, the servient estate, to the couple. Although a license may not be revoked if detrimentally relied upon, there is no indication that the neighbor expended money or otherwise relied on the owner's promise to her detriment. Consequently, the license that the owner had granted to the neighbor to use the driveway has been revoked. A license, unlike an easement, may be created orally. Although it is arguable that the neighbor's use of the driveway was sufficient to permit the creation of a prescriptive easement, and it is clear that the neighbor's use of the driveway exceeded the 10-year period required by law, the neighbor's use of the driveway did not create a prescriptive easement because it was done with the owner's permission. The couple's notice of the neighbor's use of the driveway prior to entering into a contract to purchase the owner's residence does not bind them to permit that use to continue.

Example 47: Oliver conveys Blackacre "in equal shares to Anna and Ben."

They are concurrent owners - they are tenants in common, they have equal shares. Their interests are separate because they have equal shares in Blackacre. Their interests are undivided because Blackacre is not physically divided (its not said this is your portion ben and this is your portion anna so not dividing up the whole); Anna and Ben each have a right to possess the whole of Blackacre - even though they have equal shares or 50% they can each occupy 100% of it.

Example 31: Oliver conveys Blackacre "to Anna for life, then to Anna's children who reach 21." Anna has three kids—Ben is 25, Carmen is 18, and David is 15.

To vest, must turn 21. What is Ben's interest? Remainder, because following life estate. Is it vested remainder or contingent? Its vested - condition has been satisfied, has been ascertained so it's a vested remainder. However, not done because class gift and can go to as many as 3 people. Currently class is open so bens remainder is vested remainder subject to open. Why is it subject to open? Because carmen and david might make it to 21. When will we know when the class closes and who the class members are? Not annas death. Because not about anna having kids, but about annas kids who make it to 21. So last moment in time to know is 21 years after annas death. Because there might be more kids out there and they have chance to make it into the class. If more of Anna's children reach 21, what happens? They will partially divest Ben. They will take a portion of the interest. Note 9: In property law, it is presumed a party can have a child at any time before the party's death, regardless of age. Quirk of logic of how future interests work. Also presumed anyone can have child the moment theyre born. Watch out! At least one member of the class must be vested. If no one in the class is vested, then the remainder is contingent. In the above example, if Ben were 20 instead of 25, his remainder would be contingent. Even if theres class gift, its not automatically vested subject to open. Has to be someone whos vested otherwise it will be contingent.

estoppel by deed doctrine

Under the "estoppel by deed" doctrine, a grantor who conveys a real property interest by warranty deed before actually owning it is estopped from later denying the effectiveness of his deed. Consequently, when the grantor does acquire ownership of the land, the after-acquired title is transferred automatically to the prior grantee. Because the widow's son purported to transfer the residence to the couple by warranty deed prior to owning the residence, his acquisition of ownership of the residence upon the death of his mother results in the automatic transfer of his after-acquired title to the couple. Ademption is not relevant under these facts. Under the doctrine of ademption, a devise fails (or is "adeemed") because the testator no longer owns the property upon death. At the time of her death, the mother owned the residence. The recording act of the applicable jurisdiction is a notice act. Since the mother's ownership of the residence was recorded at the time of the purported sale of the residence by the son, the couple is deemed to have constructive notice of that ownership. Consequently, they cannot claim protection under the recording act. Under the shelter rule, grantors who are protected by the recording act protect (or "shelter") their grantees who would otherwise be unprotected. The son, the grantor, was not protected by the recording act. Thus, the shelter rule does not serve to protect the couple.

equitable conversion

Under the doctrine of equitable conversion, equitable title to real property passes to the buyer upon entering the contract, even though the seller retains legal title. Most jurisdictions place the risk of loss between the contract and the closing on the buyer. However, if the seller has casualty insurance on the property, the seller must give the buyer credit in the amount of insurance proceeds against the purchase price. Although the buyer does bear the risk of loss, if the seller has insurance, the buyer will not be liable for the full amount. The fact that the seller has casualty insurance does not mean that the seller has to bear the loss entirely. The buyer is under no duty to reimburse the seller for the cost of the insurance; the buyer must proceed with the sale, minus any insurance proceeds received by the seller.

joint tenancy and tenants in common

Upon the transfer by the brothers of a 20 percent interest, the brothers held an 80 percent interest as joint tenants and the daughter held a 20 percent interest as a tenant in common with her father and uncle. The transfer by the older brother of an additional 10 percent interest to his daughter severed the joint tenancy between him and his brother, equally dividing the 80 percent interest between them and leaving them as tenants in common. The daughter never had a joint tenancy with her father and uncle since she did not receive her interest at the same time as they did and her interest was not the same amount as theirs. In addition, the two brothers are not joint tenants; the transfer by the father to the daughter severed the joint tenancy between them and left them with unequal shares. In addition, since this second transfer was done by the older brother, his interest, which was 40 percent, was reduced by 10 percent, leaving him with a 30 percent interest. The younger brother retained a 40 percent interest. By the second transfer, the daughter's 20 percent interest was increased by 10 percent to 30 percent.

Class Gifts—Vested Subject to Open

Vested Subject to Open o Vested remainder in a class gift (giving to class of people); and o Full class membership is unknown (theres people coming into class and its not known when class wil close, so subject to open because more people may come in during the future). § At least one person in the class must be vested for it to be vested subject to open; if no one in the class has vested, the remainder is contingent. As soon as one person vested, its vested. But if more people might join that person, its subject to open. § When all members of a class are identified, the class is closed.

RAP Violations

We strike out the violating interest, as if the interest was never created in the first place. Consequence is if theres a bad future interest and it gets struck it affects the other possessory estates and future interests. May have to be reclassified. Maybe can think as before rap and after rap - classifying interests, applying rap, and then figuring out whats left after getting rid of it.

Example 12: Oliver conveys Blackacre "to Anna, but if the land is not farmed, Oliver may re-enter and re-take the property." When, if ever, is Oliver entitled to possession?

When the condition is met and Oliver reclaims it. Reason its fee simple subject to condition subsequent is because its fee simple and at fee simple, is subject to condition and condition is subsequent because it says what may happen in order for it to defease. When is oliver entitled to possession? 2 things have to happen: 1. Condition must be met. 2. He has to re-take and exercise that right.

Example 38: Oliver conveys Blackacre "to Anna (fee simple, but not absolute because stuff following it), but if (conditional language) the land is ever used as a business during Anna's lifetime, to Ben (ben has future interest that's executory interest - in order for it to vest ben has to divest anna)."

When: Interests created at olivers conveyance; inter vivos transfer. What: Interest subject to RAP is bens future interest - its executory interest. Who: Lives in being at the creation of the interest (anyone alive when interests were created? Yes, oliver anna and ben were alive. Because they are all named so all potential validating lives.) are oliver, ben, and anna. Now must determine which one is the validating life. Maybe figure out who is validating life by determining when is last moment in time when interest vests or fails. So vesting condition - land is ever used as a business during annas lifetime - it will be known during annas lifetime whether or not she used as a business. But whens last moment in time it will be known? When anna dies. If she never used land for business. At annas death it will be known whether bens interest vests or fails. so anna is validating life. So must ask is this interest going to vest during this persons life, at their death, or 21 years after their death? Anna satisfies this because it will be known at her death. Will probably also be known earlier but the last moment in time is her death which means its inside perpetuities period and no remote vesting. Validating life? Will we know 21 years after their lives whether this interest will vest or not? Yes, at anna's death we will know whether she used the land for business purposes. So anna is the validating life. Ben is seductive answer - but problem is ben can die immediately after transfer. Doesn't say anything because his heirs can inherit his executory interest. So ben is red herring because question is whether anna used it within her lifetime, so anna is what matters. Result: RAP is not violated. Ben's executory interest is valid. So no rap violation. No change to conveyance, no need to strike anything.

Example 39: Professor conveys "$1000 to my Themis students who are admitted to the bar." (Not a binding contract!)

When: Interests created inter vivos - at time of conveyance. What: Interest subject to RAP is students' future interest - springing executory interest - because receiving party divests grantor. Who: relevant lives? Grantor and receiving parties. Lives in being at the creation of the interest are grantor and grantees. Validating life? When is last moment in time to know if condition was satisfied? When all grantees or receiving parties are dead. When last of them dies. Will be known sooner but last moment in time to know if when last grantee dies. That last person who dies is the validating life. When last person dies, the question can be answered. So validating life is the death of the last grantee. No more certainty required because logically condition cannot happen at all anymore after every grantee dies. After that point question is clearly and definitively answered of whether condition is met. Validating life? Will we know 21 years after someone's death whether this interest vests or not? Yes, we will know whether it vested or failed. Result: No violation. Students' executory interests are valid. No violation of rap because good future interests. Note 10: RAP is not about whether an interest vests or fails. It is about whether we will know if it vests or fails. Cannot have uncertainty. Because rap needs to answer the question of whether interest vests or fails.

Example 41: Oliver conveys, "to Anna so long as (durational language) the property is used as a farm, then to Ben." Anna has a fee simple subject to an executory interest and Ben has an executory interest.

When: When are interests created? At olivers transfer - its inter vivos. Word "conveys" is there which is how that's known. What: "to anna so long as" - that's durational language. At creation, anna has fee simple subject to executory interest. "then to ben" - ben has executory interest. Which makes annas right a fee simple subject to executory interest. Theres possessory estate then it goes to ben. As written initially, oliver has nothing. Oliver gave away everything. What: Is there future interest subject to rap? bens executory interest. Who: who affects vesting? Oliver created, and anna has possession, then possibly ben because ben has to vest. Is there a validating life? When is last moment in time it will be known whether interest vests or fails? Not when is the soonest or most common, but the last moment in time. That's difficult to establish because vesting language - "so long as the property is used as a farm" - problem is that all parties can die and property can still keep going. Theres fee simple subject to executory interest - so long as property is used as a farm it will stay in their line. Can be scenario where anna dies, but leaves an heir and that heir keeps using the property as a farm. And then that heir dies, and so on and so on and they always keep using property as a firm. Ben may be long gone, bens great grandkids may be alive then, and suddenly possessor holder stops using property as a farm. And at that point bens future interest will vest. And thats way outside period of perpetuities - probably hundreds of years later. Problem is that executory interest is inheritable and the fee simple subject to executory interest is inheritable. So because there exists situation that can be so far in the future and so many generations later, its way outside perpetuities period and it's a bad future interest. If the story exists, then it must be struck as a rap violation. So bens interest is gone - it violates rap so its struck. It becomes Oliver conveys, "to Anna so long as the property is used as a farm." Which means anna has fee simple determintable, ben has nothing, and oliver now has a possibility of reverter because possibility of reverter is the future interest following fee simple determinable when held by the grantor. This conveyance violates RAP. It is possible that Ben's executory interest will vest more than 21 years after Anna's or Ben's death. Result—strike the offending interest: Oliver conveys to Anna Anna's interest: A fee simple determinable. Ben's interest: Nothing. Oliver's interest: A possibility of reverter - because possibility of reverter is the future interest following fee simple determinable when held by the grantor. So all parties' interests have changed. Because the bad future interest was struck out. Oliver now has a possibility of reverter, even though initially he had nothing.

Example 42: Oliver conveys "to my grandchildren who reach 21." Oliver has two children, Anna and Ben, and three grandchildren under the age of 21.

When: says conveys, and thats during life, so inter vivos. So at olivers conveyance interests are created. So if validating life, they must be alive when interest was created. Who: oliver, anna, ben, and 3 grandchildren. Anyone born later cannot validate the future interest. What: interest created is executory interest. Oliver's holding it in fee, conveys to grandchildren and they get it at 21. They have a springing executory interest. Does rap apply to springing executory interests? It does. So must do a rap analysis. Relevant lives: oliver, as grantor, and anna and ben, as children of oliver. Why do they matter? They will give birth to anyone vesting. Also 3 grandchildren, they will all be potential people to validate as well. When is the last moment in time to know whether interests vest or fail? Key to problem - who created interests? Oliver. Hes alive. In rap, and for estates and future interests, living people have habit of breeding - they have more kids. Olivers alive so can have more kids. Every time kid is born, new kid can also have kids. They can have grandchildren which means grandchildren can be born to new children nafter interest is created. So can be story where people vest way outside period. For example, if year after interest is created, oliver has new kid. Everyone who was alive when interest was created dies next day somehow. But new kid still alive. New kid lives long life and 50 years after everyone dies, new kid has a kid (grandchild of oliver) which takes another 21 yrs for interest to vest. So situation exists that is very far outside life plus 21 years period. Oliver still alive so there is bad future interest. Can be situation where future interest vests more than 21 years after oliver or anna or ben or any of 3 grandkids (alive now) die. Theres bad future interest, so this bad executory interest must be struck. This conveyance violates RAP. It is possible that Oliver could have another child—call her C—who gives birth to a grandchild after Oliver, Anna, and Ben have died. This grandchild will not reach age 21 until more than 21 years after the deaths of the measuring lives (C is not a validating life because she was not in existence when the interest was created). Result—strike the offending interest: Oliver conveys to my grandchildren who reach 21 (whole bolded thing must be struck because its all bad - o had fee simple, gave executory interest, but executory interest is bad so its struck, which means o back to having fee simple absolute). Grandchildren who reach 21: Nothing. Because future interest is bad. Oliver's interest: A fee simple absolute. What's the key fact? Oliver is alive. Why does it matter? Because living people breed. Oliver will have more kids, and those kids cannot validate the future interest because they weren't alive when interest was created. Must be able to say whats vesting at issue. Must be able to identify what has to happen for interest to vest. In last problem, grandkids must make it to 21. Then must ask how far away is that from happening and what has to happen for that to take place? If theres no clear answer to that, and it cant be determined, its probably too far outside the period. So always looking for timeline.

foreclosure - double banks

While the bank's acceptance of the couple's deed in lieu of foreclosure extinguished the bank's mortgage on the house, this transaction did not affect the savings and loan association's mortgage on the house. The bank took title to the house subject to the savings and loan association's mortgage. While the savings and loan association's mortgage is unaffected by the transfer of the couple's interest in the house to the bank, this is not because this mortgage enjoyed priority over the bank's mortgage. Under the "first in time, first in right" rule, the savings and loan association's mortgage was the junior mortgage on the house. Although under the "first in time, first in right" rule the savings and loan association's mortgage was the junior mortgage on the house, it was not eliminated by the deed in lieu of foreclosure transaction between the bank and the couple. This transaction eliminated the bank's mortgage, but left the savings and loan association's mortgage unaffected. Despite the transfer of title to the house to the bank, the house remains subject to the savings and loan association's mortgage. The transfer of property on which there is a mortgage by the mortgagor does not eliminate the mortgage. While its mortgage remains on the property, the savings and loan can still foreclose.

Example 43: Oliver conveys "to Anna for life, then to her children who reach 25 (remainder)." At the time of the conveyance, Anna's son Ben is 26 and her daughter Carmen is 18 so vested remainder subject to open. Why vested? Ben 26 so he satisfied condition. Why open? Carmen is 18 so she gets an opportunity to make it to 26 as well.

Who are members of the class? Annas children who reach 25. Currently ben, potentially carmen. Any child born later as well. Has any class member vested? Ben. His remainder has vested, hes 26. Is class closed? No. when will the class close? When anna dies. Why? Anna is feeding class. Anna can have more kids who join class. Editorial Note 2: The members of the class are Anna's children. Before they can be entitled to take the property they must satisfy the condition of reaching 25. Has any class member vested? Yes, Ben's remainder has vested. Is the class closed? No, Anna is still alive and may have more children. • Remember: Living people have the nasty habit of breeding. Property law assumes that anyone who is alive can still have children. Does the gift survive RAP? It does not. It's a bad future interest. Why? Anna can have another kid, and she can die, and it can take kid more than 21 yrs after her death to make it to 25. because of that, its bad future interest so its outside the period. Anna could have another kid (call her Dana) after the conveyance. Dana can't be a validating life. Dana could vest more than 21 years after Anna, Ben, and Carmen's death. What happens to Ben's interest since its already vested? Its now gone. Void under rap, because its all or nothing. In vested subject to open its either all of the members of the class or none of them. If bad to one, then bad to all. Result—strike the offending interest: Oliver conveys to Anna for life, then to her children who reach 25 (bold part gets struck). Anna's interest: A life estate. Oliver interest: A reversion. Children, including Ben who is vested, have nothing. Why? Theres situation where it can vest outside the period.

A possibility of reverter is...

freely alienable by the grantor, both during his life and upon his death.

A fee simple determinable is...

freely alienable, devisable, and descendible, but it is always subject to the stated condition. 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.

concurrent estates - Basic Rule

o Concurrent owners each have right to use or possess the whole of the property. Means that if anna and ben both have interest in property each is entitled to possess whole thing at the same time. Practically cannot happen because canot both be using at the same time. Have to exclude each other so body of law built on lie and as a result bulk of body of law is trying to resolve disputes between these types of owners. o Exception: Concurrent owners can contract out of the basic rule.

Future Interests Associated with Defeasible Fees - Right of Entry (also called power of termination)

o Future interest held by the grantor (person creating interest) following a fee simple subject to condition subsequent. o Does not vest automatically (unlike reverter which vests automatically); it must be reclaimed (must exercise it). Example 14: Oliver conveys Blackacre "to Anna and her heirs (fee simple language), but if (conditional language) the land is not used as a public park, Oliver can re-enter and re-take." Oliver has a right of entry. In order for Oliver's interest to become possessory, Oliver must exercise the right of entry and reclaim the interest. Exercise right by going to court. Note 4: The right of entry is also known as the power of termination.

D. Future Interests Associated with Defeasible Fees - Possibility of Reverter

o Future interest held by the grantor (person creating property interest) following a fee simple determinable. o Interest vests automatically after the durational period ends. Moment durational period is up, it vests back in grantor and goes backward to person creating it. Example 13: Oliver conveys Blackacre "to Anna and her heirs (fee simple language), so long as the land is used as a public park (durational language saying its fee simple determinable)." What future interest does Oliver have? Oliver has a possibility of reverter. If the land isn't used as a park, the interest vests in Oliver as a fee simple because it reverts back to the grantor.

• Can a life tenant (of a life estate measured by the life tenant's life) pass the property by will?

o No because the life estate ends at the life tenant's death.

• Can a life tenant (of a life estate measured by the life tenant's life) pass the property by intestate succession?

o No, the life estate ends at the life tenant's death.

rule against perpetuities - What is going on? Three questions to set the RAP context:

o Practical tension: Parents want to keep property in the family but do not trust their children so they want to tie it up so children do not squander wealth v. courts' unease about uncertainty - courts are uncomfortable about uncertainty with future intetests, courts don't want people typing up property in future interests indefinitely. So tension between wanting to control wealth and courts' nervousness about uncertainty. Courts are neutral with respect to someone wealth but just don't want uncertainty in property ownership. o Thus: RAP prevents remote vesting. Prevents people from creating a scenario where future interest may vest a long time in the future - so far in the future that no one can anticipate what happens now. So people can tie up their wealth and property for 2 generations but after that need some certainty. So at least one person alive now plus 21 years (Which is second generation). After that, must know with certainty whether interest vests or fails. If question cannot be answered, bad future interest exists because it will be uncertain for too long. So all about time period - does it vest or fail within the time period? If outside the period, its bad and bad from get go solely because courts don't like uncertainty.

Rule in Shelley's Case

o Prevents against remainders in a grantee's heirs. o Uses the doctrine of merger to create a fee simple - gets rid of remainder Example 34: Oliver conveys "to Anna for life, then to Anna's heirs." What estate does Anna have under the Rule in Shelley's case? - so why wait and put into annas heirs after her life estate ends? Just give anna a fee simple absolute and then when she dies itll go to her heirs anyways unless she didn't want it to.

Special Cases - Doctrine of Worthier Title

o Prevents against remainders in a grantor's heirs - it creates presumption as reversion in grantor. o Creates a presumption of a reversion to the grantor Example 33: Oliver conveys "to Anna for life (life estate), then to my heirs." What future interest does Oliver retain under the Doctrine of Worthier Title? Oliver, under doctrine of worthier title, has a reversion. Doctrine gets rid of remainder and creates reversion to grantor. Because then his heirs take it anyways.

2. What: Determine if interests created are subject to RAP

o RAP applies to: § contingent remainders; § executory interests (both shifting and springing); § class gifts (vested remainders subject to open), if not closed by rule of convenience. o Does not apply to vested remainders unless subject to open

3. Who: Identify the relevant life and, if applicable, validating lives

o Relevant life: Person who affects vesting, usually mentioned or implied by the grant (e.g., prior life tenant, the parent where a conveyance is made to a child) Example: if given life estate followed by a remainder, the life estate (that person matters) - they affect vesting so theyre relevant to the inquiry. Not just looking for any life, but only people who affect vesting. What matters is person who has future interest or person who gives birth to future interest holder, etc. o Validating life: Person who tells us whether or not the interest vests within the perpetuities period (lifetime plus 21 years). Measuring RAP based on this persons life. If theres a validating life, then no violation. RAP violation is no validating life. § Must have been alive when the interests were created; § Can validate her own interest - can be your own validating life; § If no validating life, then the interest is no good and we strike it from the grant and its like it never happened; if there is a validating life, the interest is good and no more a RAP problem. RAP destroys bad future interests. If good interest that doesn't violate the rule, RAP doesn't destroy that.

RAP Applies to a Vested Remainder Subject to Open.

o Rule of Convenience: A class-closing mechanism to avoid application of RAP to a class gift. Way to prevent a gift of a subject to open - way to prevent that gift from violating RAP. Closing class to not run afoul of RAP. o If the grant does not have an express closing date, the Rule of Convenience closes the class when any member of the class becomes entitled to immediate possession. When someone entitled to immediate possession, shutting it down.

Three Kinds of Concurrent Ownership/Concurrent Estates

o Tenancy in common; o Joint tenancy; o Tenancy by the entirety;

A future interest held by a grantor after a fee simple determinable is a _________; a future interest held by a grantor after a fee simple subject to a condition subsequent is a _________.

possibility of reverter; right of entry

F. Cy Pres

• An equitable doctrine (borrowed from the law of trusts) that allows a court to reform a transfer to avoid RAP. If theres rap, can use cy pres through equitable power of court to say lets reform the future interest.

Rule of Convenience

• An interpretative rule - means it doesn't apply automatically, but must decide if applying it or not. Must decide if class gets closed. • Can save a class gift from being invalidated under RAP • For purposes of avoiding RAP, the class closes as soon as a member of the class is entitled to immediate possession.

Waste

• Comes into play when more than one party has an interest in the same piece of real property. Someone doing something on property and worried about that affecting someone elses interest in the property. Example 24: Oliver conveys Blackacre "to Anna for life. (life estate, oliver has reversion)" Anna has been dumping hazardous materials onto the property, which have caused serious damage to Blackacre. The doctrine of waste gives Oliver a claim to stop Anna from injuring the land. Why? Because Oliver has a reversion. When annas life estate ends, it reverts back to oliver and hell be stuck with hazardous waste. Doctrine of waste gives him standing to stop her from dumping waste. • Not unique to estates and future interests - any interest where multiple parties have a claim • Situations where the doctrine of waste applies include: o Landlord v. tenant; o Co-tenant out of possession v. tenant in possession (concurrent estates); o Mortgagee (bank/lender) v. mortgagor (borrower). Exam Tip 1: How to Spot a Waste Problem (is there a person who has a claim whos out of possession and may have interest in preventing or encouraging certain behavior?): 1. Do multiple parties have simultaneous interests (interest in property at same time, even if different types of interests), (e.g., life tenant, remainder, future interests, landlord v. tenant)? 2. Is there a change in the value of the property due to the actions/inactions of the party in possession? 3. Will the waste substantially change the interest taken by the party out of possession - (is what person is doing now going to affect other persons interest later?)?

Tenancy in Common

• Default concurrent interest o Any conveyance to more than one person is presumed to be a tenancy in common. Baseline rule, unless something different is explicitly stated. • Concurrent owners have separate but undivided interests in the property. Separate meaning technically distinct legal interests but not physically divided up. Each has right to possess the whole. Example 47: Oliver conveys Blackacre "in equal shares to Anna and Ben." They are concurrent owners - they are tenants in common, they have equal shares. Their interests are separate because they have equal shares in Blackacre. Their interests are undivided because Blackacre is not physically divided (its not said this is your portion ben and this is your portion anna so not dividing up the whole); Anna and Ben each have a right to possess the whole of Blackacre - even though they have equal shares or 50% they can each occupy 100% of it. • No right of survivorship in tenancy in common o Each co-tenant can transfer the property freely at death as well as during life. Example 48: Oliver conveys Blackacre "in equal shares to Anna, Ben, and Carmen." Anna conveys her interest to Amy. Ben dies and his will gives his entire estate to his son Brad. Who owns Blackacre? Amy has a 1/3rd interest in Blackacre (Taken anna's) Brad has a 1/3rd interest in Blackacre. (Taken ben's) Carmen has a 1/3rd (her original) interest in Blackacre.

Termination of life estate

• Ends naturally when the measuring life ends. o Transferable Example 20: Oliver conveys Blackacre "to Anna for life." Anna later transfers her interest to Ben. When will Ben's interest terminate? When anna dies. Because life estate based on anna's life. Doesn't become based on bens life because hes holding. Still measured against anna.

Fee Simple

• Fee simple is the largest possessory estate. • Why is it the largest? It is capable of lasting forever. o Inheritable: Upon the owner's death, the owner can pass it by will or by intestate succession; can also be transferred by gift or sale during owner's life. Example 7: O transfers land to A. A has a fee simple absolute (nothing stopping it or on horizon that stops the estate). A dies without a will. B is A's only heir. B then has a fee simple absolute. B dies without a will, leaving C as an heir. C has a fee simple absolute. • To create a fee simple: o Historically, had to Look for magic words: "and his/her heirs" § But these words are not required: "O to A" and "O to A and her heirs" are the same thing. It is presumed people convey the most they have. o Watch out for ambiguous grants. If ambiguous, it creates a fee simple (because fee simple is the presumed grant). • Fee simple absolute is the default estate; there is a presumption that the grantor conveys the most that she has, unless it says otherwise or they use some word rebutting the presumption. • Don't be fooled by words of intent or purpose. Precatory words such as "my hope and wish" are not enough to show actual intent. • No future interest associated with a fee simple. Fee simple absolute has no corresponding future interest. Because the person getting it has the entire thing, no future interest. because its capable of lasting forever. Fee simple absolute is the whole so no part is taken out.

F. Executory Interest

• Future interest that will cut short, or terminate, an earlier interest. • The word for terminating a prior interest is to "divest." Example 16: Oliver conveys Blackacre "to Anna and her heirs, but if liquor is served on the premises, then to Ben and his heirs." Ben has an executory interest. Why? Because Ben will cut short or divest Anna's interest if liquor is ever served. Whose interest is being divested? Anna's fee simple subject to executory interest.

Executory Interest

• Future interest that will cut short, or terminate, an earlier interest. • The word for terminating a prior interest is to "divest." Example 16: Oliver conveys Blackacre "to Anna and her heirs, but if liquor is served on the premises, then to Ben and his heirs." Ben has an executory interest. Why? Because Ben will cut short or divest Anna's interest if liquor is ever served. Whose interest is being divested? Anna's fee simple subject to executory interest.

Future Interests Following a Life Estate

• If possession of the land goes back to the grantor (person who created it) after the life estate ends, then the grantor retains a reversion. Example 22: Oliver conveys Blackacre "to Anna for life." Oliver retains a reversion - he had everything, and gave away life estate but held onto an interest that's called a reversion. Upon Anna's death, Oliver takes the property in fee simple absolute - he gets the whole thing back. • If possession of the land goes to a third party (transferee) after the life estate ends, then the third party takes a remainder.

C. Fee Simple Subject to Condition Subsequent

• Limited by specific conditional language - contrast conditional language with durational language. Example 11: Oliver conveys Blackacre "to Anna, but if the land is not farmed, Oliver may re-enter and re-take the property." Words "but if" are classic conditional language. Contrasting with durational language from fee simple determinable (which is more like "so long as" or "while"). • Examples of conditional language include: o "Provided that the land is not farmed;" o "On the condition that the land is not farmed." • Focus on the language to the grantor: Suggests that the grantor must exercise a right in order to take possession. Grantor must do something.

B. Fee Simple Determinable

• Limited by specific durational language Example 10: Oliver conveys Blackacre "to Anna so long as (classic durational language - "so long as") the land is used as a farm." • Examples of durational language include: o "While the land is used as a farm;" o "During its use as a farm;" o "Until it is no longer used as a farm." Note 3: The fee simple lasts while the period is in play (e.g., while used as a farm), but as soon as the period ends (e.g., when the land is no longer used as a farm), the fee simple ends.

Creation of life estate

• Magic words to create a life estate are "for life." • If ambiguous, look for the grantor's intent to create an estate that will end upon the death of the measuring life. Example 19: "To A to live in your house." Some argue that this language creates a fee simple for A. Others argue that this language creates a life estate. Both arguments have merit. Resolve based on whether it should be inheritable or limited just for the person while they are alive. If its fee simple, its inheritable. If life estate its not because it ends when person dies. Probably life estate because it says "to live in your house" and that suggests a lifetime.

A. Defeasible Fees

• May be terminated by the occurrence of an event; • Capable of lasting forever but also of being terminated early; • Condition will cut short the fee simple.

tenany in common - right of survivorship and transferability

• No right of survivorship in tenancy in common o Each co-tenant can transfer the property freely at death as well as during life. Example 48: Oliver conveys Blackacre "in equal shares to Anna, Ben, and Carmen." Anna conveys her interest to Amy. Ben dies and his will gives his entire estate to his son Brad. Who owns Blackacre? Amy has a 1/3rd interest in Blackacre (Taken anna's) Brad has a 1/3rd interest in Blackacre. (Taken ben's) Carmen has a 1/3rd (her original) interest in Blackacre.

RAP and Class Gifts

• Special Rule: If the gift to any member of the class is void under RAP, then the gift is void as to all members of the class. The gift is "bad as to one, bad as to all." (The "all or nothing" rule.) either all members of class or none.

Executory Interests

• Subject to the Rule Against Perpetuities ("RAP") • Definition: Future interest that cuts short (i.e., divests) a prior vested interest. o Two kinds of executory interests: § Springing executory interest: Divests the grantor; § Shifting executory interest: Divests a prior grantee;

Joint Tenancy

• The defining characteristic is the right of survivorship whereby the surviving joint tenant(s) automatically take the deceased tenant's interest. Its like deceased tenant never had it. Example 49: Oliver conveys Blackacre "to Anna and Ben as joint tenants with a right of survivorship." Anna dies in a tragic hunting accident. Anna's will leaves everything to her daughter Amy. Who owns Blackacre and why? Ben, who takes under the right of survivorship. Ben has blackacre in fee simple absolute, because of right of survivorship. Amy gets nothing, because anna was not able to pass her interst in joint tenancy by wil because of right of survivorship. The moment anna died, her interest was extinguished, its like its no longer there and goes to ben in entirety. So like a legal fiction - basically saying they all own it, and as they die, its like they were never there. • How do you create a joint tenancy? o Grantor must make a clear expression of intent; PLUS o Must be survivorship language, e.g., "as joint tenants with a right of survivorship."

E. "Wait and See" Approach - lot of states have gotten rid of rap and adopted reforms to soften rap.

• The traditional RAP has been softened by reform (e.g., Uniform Statutory Rule Against Perpetuities). • The most common modern approach is to "wait and see" if an interest subject to RAP vests within the perpetuities period. Rather than actually applying rap and striking, wait and see if interest vests or fails within some sort of time period. • Some of these states changed the vesting period to 90 years. Exam Tip 3: The bar exam still tests the traditional RAP though you should be aware of the modern "wait and see" approach.

Exceptions to the Class Gift Rule (when the "all or nothing" rule does not apply) Two exceptions:

• Transfers of a specific dollar amount to each class member, and • Transfers to a sub-class that vests at a specific time, e.g., "to the children of B, and upon the death of each, to that child's issue". That is specific enough to take out of all or nothing.

Fee Simple Subject to Executory Interest

• Will end upon the happening of an event and the future interest will vest in a third party (i.e., someone other than the grantor) • Held by another transferee and not the grantor. Example 15: Oliver conveys Blackacre "to Anna and her heirs, but if liquor is served on the premises, then to Ben (not grantor, another transferee) and his heirs." Anna has a fee simple subject to executory interest. Ben has an executory interest. If liquor is ever served, Ben will divest Anna of her interest and hold a fee simple.

Fee Simple Subject to Executory Interest

• Will end upon the happening of an event and the future interest will vest in a third party (i.e., someone other than the grantor) • Held by another transferee and not the grantor. Example 15: Oliver conveys Blackacre "to Anna and her heirs, but if liquor is served on the premises, then to Ben (not grantor, another transferee) and his heirs." Anna has a fee simple subject to executory interest. Ben has an executory interest. If liquor is ever served, Ben will divest Anna of her interest and hold a fee simple. Note 5: Look to who holds the future interest to distinguish a fee simple subject to executory interest (third party holds) from a fee simple subject to a condition subsequent (grantor holds).