Chapter 2: Property Ownership and Interests Pt 2

Rights of Life Tenants

1. can transfer their title to another person 2. pledge the title as security for a debit (called right to alienation) 3. legally mortgage (encumber) the life estate if they can find a willing lender but may not encumber the remainder man's interest 4. right to esters = cut a reasonable amount of timber from the land for repairing building and fuel but not for profit bc that would be an act of waste 5. net income produced from the property 6. must pay property taxes & make repairs/improvements so the land doesn't deteriorate & depreciate. improvements like sewer lines & street paving must be assessed by a county or municipality

Nonfreehold Estates

AKA leasehold estate property is leased

Dower and curtesy rights apply in the state of North Carolina. T/F?

F

If Bill owns land in fee simple absolute and transfers it to Bonnie without any limiting language, then Bonnie owns the land in fee simple absolute. T/F?

T

freehold estate

a possessory interest of an indefinite amount of time or without a specific termination date; it may end, but no one knows when that might be

Which is NOT a legal right of a life tenant? a. encumbrance on the life estate b. net income produced from the property c. income from cut timber d. estovers for building repairs

c. income from cut timber

Grandpa owned property in fee simple. He granted a life estate to his brother Zach and a remainder estate to his son Joel. The life estate is based on Zach's life. What can Zach NOT do with his life estate? a. He can give his life estate away to his sister. b. He can live on the property. c. He can sell his life estate to a stranger. d. He can will the life estate to his daughter.

d. He can will the life estate to his daughter.

Mark bought a house for his just-widowed sister, Kim, to live in, although he is the owner. When Kim dies, Mark wants to retain possession of the property. Who will own the property when Kim dies and what is that person called? a. The owner of the property will be Kim's heir, who is the new life tenant. b. The owner of the property will be Kim's heir, who is the remainderman. c. The owner of the property will be Mark, and he is the remainderman. d. The owner of the property will be Mark, and he is the reversioner.

d. The owner of the property will be Mark, and he is the reversioner. NOT c. The owner of the property will be Mark, and he is the remainderman. Ownership and possession of the property will revert to Mark when life tenant Kim dies. Mark is the reversioner.

Exceptions to Fee Simple Conditional Estates

does not apply to a restriction or covenant from a builder, developer, or homeowners' association the condition usually passes with the land forever but some states impose a statutory period during which the original grantor of the deed can exercise the right to reclaim possession of the property. after that, the condition should still be upheld but the owner will not lose possession of the land

Fee estates

estates of inheritance that are inherited by the owner's heirs. Fee refers to the quantity of the title, (4ever or at least a lifetime) not the quality of the title (ex: free of liens)

fee simple subject to condition precedent

grantor includes a condition where the grantor retains title to the estate until a specific condition occurs. ex: Bill will transfer title of the property to his grandson Will, if Will marries before his 25th birthday

Fee Simple Conditional

grantor puts a condition or a requirement in the deed that gives the grantor the "right of re-entry" if the condition is broken or the requirement is not met. Can pursue to get the land back in court. key language: "as long as"

Fee Simple Determinable

grantor puts a condition or requirement in the deed that gives the grantor a "possibility of reverter," which is a right to regain the use and possession of the property automatically if the new owner does not comply with the stated condition or requirement. The key words are "as long as."

Estates of Inheritance

last a lifetime and may continue beyond the life of the owner and transfer under the owner's will or by intestate succession (if the owner dies without a will)

I just read 101-125 without taking notes.

maybe go back and look at that

Fee Simple Absolute Estates

ownership for a lifetime so its the most complete/desirable freehold estate interest. most common in USA implies there are no conditions on the deed or title, making it perpetual, inheritable, and transferable. aka: fee title, ownership fee, fee simples

Conventional Life Estates

the measuring life and the life tenant are the same person. created by intentional conveyance.

Defeasible Fee Estates

Aka: qualified fee estate has an encumbrance (condition or requirement) on the title that the grantor puts on the deed that runs with the land. if it's not met, the ownership of the fee simple estate could terminate & title would revert to the grantor may be classified as determinable or conditional

Estates Not of Inheritance

AKA Life estates freehold estate that lasts only as long as a specified person, who is the "measuring life," remains alive A life tenant's interest can be sold, mortgaged, or leased. But a person can transfer only the interest he or she owns so the person who buys it loses their interest when the life tenant dies. life tenant may not commit an act of waste tot he property (damage or reducing its market value) 2 types: Conventional Life Estates & Marital Life Estates

Estate for the Life of Another

AKA Pur Autre Vie based on the life of another person rather than on the life of the life tenant For example, Paul owns property in fee simple. He decides to deed his property to Sue for as long as Mike lives. Sue is the life tenant, and Mike is the measuring life.

Ellen is granted a life estate by her uncle. Ellen has a young son, Jon, and she wants to ensure he is cared for in the event of her death. Can Ellen will her life estate to Jon? Y/N?

N

Harry buys a house from Tom as fee simple. Can Tom take the house back because he doesn't like the color Harry painted the shutters? Y/N?

N

In his will, Joe leaves everything to his son, Bill, who now has a reversionary interest in the estate as well. Let's say that Joe dies before Sue dies. Since Joe's son Bill gets everything, according to Joe's will, can Bill kick sister Sue off the property and take possession fee simple? Y/N?

N

Some events that will end a freehold estate

The transfer of the property to someone else (i.e., the sale of property). The death of the owner. Foreclosure on the property for non-payment of debt. Confiscation of a taxpayer's real property in lieu of unpaid taxes (tax-forfeiture). Condemnation by the government under eminent domain.

Andrew conveys a life estate to his younger son Bart for as long as his wife Carla shall live, and then to his son Doug. Can Bart sell his interest in the property to his cousin Fred? Y/N?

Y

Jill grants a life estate to her brother, Jim. Jim gets a job out of state and will no longer live on the property; besides, he needs money to move and get a new place. Can he sell his life estate to Pam? Y/N?

Y > Jim can indeed sell his interest in the property. Pam can live on the property, but she does not own the property. Her interest ends when Jim, the measuring life, dies. This describes life estate pur autre vie

Same example, but instead, the specific deed language is, "My niece and her heirs may have the land as long as 10 acres remains undeveloped." Your niece later turns the entire 20 acres into a parking lot for the ski resort next door. Do you have the right to reclaim that land without going to court? Y/N?

Y > When you used the words "as long as," you granted a fee simple determinable estate that gives you the right to regain the use and possession of the property automatically if the condition is not met. As long as the conditions are met, however, a freehold estate can theoretically go on forever. Irv's title had a condition on it—that alcohol is never served on the property. He could not then sell the property to someone else and convey a greater interest than what he had. Sellers can convey only what they own or less than what they own, never more. is this right?

Heather wants to grant her land to her favorite charity, with a few conditions. If the charity does not comply with these conditions, Heather will automatically regain possession of the property. What are the keywords Heather should include in the deed? a. as long as b. right of re-entry c. unless otherwise indicated d. until such time

a. as long as

Mike sold his land to Pam with the condition that she does not disturb the spring house built in 1750 that's on the back of the property. When Pam tore the spring house down to put up a horse barn, Mike exercised his right of re-entry. What type of estate did Mike grant Pam, and what did Mike have to do to get the land back? a. fee simple subject to a condition subsequent; Mike goes to court b. fee simple subject to a condition subsequent; Mike gets the property automatically c. determinable fee estate; Mike goes to court d. determinable fee estate; Mike gets the property automatically

a. fee simple subject to a condition subsequent; Mike goes to court

Which of these estates is NOT inheritable? a. Alice owns the mineral rights on a ranch in Wyoming. b. Bart is the life tenant of a conventional life estate. c. Carl is the life tenant of a life estate where Don is the measuring life. d. Eunice owns a 10-acre parcel that she is prohibited from subdividing, according to the deed.

b. Bart is the life tenant of a conventional life estate. NOT c. Carl is the life tenant of a life estate where Don is the measuring life. Of these, Bart's conventional life estate is not inheritable since the estate ends at his death. He is both the life tenant and the measuring life.

Let's say that Joe grants a life estate to daughter Sue. When Sue dies, the life estate reverts to Joe. In this scenario, who is the life tenant? A. Joe B. Sue

B. Sue

Of these, which is an example of fee simple subject to condition precedent? a. Fred will automatically regain ownership of a property if the son to whom he's giving it does not comply with the conditions. b. Jodi will transfer title to a property to her granddaughter, Mindy, if and when Mindy graduates from college. c. Laurie will be able to live in the house as a life tenant as long as her father is alive. d. Mike can go to court to reclaim ownership of the property he gave to his sister if she ever tears down the barn.

b. Jodi will transfer title to a property to her granddaughter, Mindy, if and when Mindy graduates from college.

You own 20 acres of land in the mountains. You decide to deed the land to your niece. However, you want to make sure that the pristine beauty of the property is not marred by development, so you indicate that at least 10 acres must remain undeveloped. This is an example of a. fee simple absolute. b. fee simple defeasible. c. leasehold. d. life pur autre vie.

b. fee simple defeasible.

Andrew Dye has two sons. His second wife Carla dotes on their son Bart, but Andrew is fonder of son Doug from his first marriage. Carla urges Andrew to give the Dye family beach house to Bart, but Andrew has a better idea. He conveys a life estate to his younger son Bart for as long as Carla shall live, and then to Doug. What type of estate does this describe? a. conventional life estate b. life estate pur autre vie

b. life estate pur autre vie

Which type of life estate is created by operation of law? a. conventional only b. marital only c. both conventional and marital d. neither conventional nor marital

b. marital only

Reversionary vs Remainder Life Estates

both types of life estate are a present interest for the lifetenent who creates a future interest for the person who gets the property next. the future interest may be reversionary or remainder: reversionary: property reverts to the the grantor and their heirs after the measuring-life-person dies remainder: property goes to another person known as the remainder man. remainder man interest is inheritable.

Marital Life Estates

in NC, these are created when a married person owning real property dies intestate and is survived by a spouse. the statute gives the surviving spouse the option to take a life estate of 1/3 value of all real estate the dead spouse solely owned during the marriage (even if not owned at death) instead of anything the spouse would otherwise inherit doesn't work for anything they co-owned tho

Life Estate: North Carolina Homestead Exemption

Dower rights typically apply to a widowed wife's interest in a deceased husband's property, while curtesy rights typically apply to a widowed husband's interest in a deceased wife's property. States that recognize dower and/or curtesy will legislate how to address property brought into the marriage or property that is acquired during the marriage. Not NC though homestead: state's homestead laws apply to property distribution to afford some protection to surviving spouse/minor children. NC Homestead Exemption Law protects the equity (interest) in the homeowners residence (real AND personal property) from creditors and lawsuits, including bankruptcy.Currently, the protection is $35,000 and the act also increases the amount of protection to a maximum of 60,000 in certain cases. statutory life estates are terminated by divorce & cannot be willed to heirs obvi

Sue creates a life estate for her brother Dave. When Dave dies, the estate will go to Sue's sister Tina. Dave is known as the "remainderman." T/F

F

When comparing freehold estates and nonfreehold estates, nonfreehold estates have a lifetime ownership interest. T/F?

F