Property

What is a contingent remainder?

A contingent remainder is a remainder that: some unknown or unborn person holds or is subject to a condition precedent before it can become possessory (that is, some specific event must occur, or else the remainder cannot become possessory). A contingent remainder will vest, then, if the holder is born and identified, and the condition precedent is satisfied. Conversely, if these things do not occur, the contingent remainder will never vest or become possessory.

What is the potential duration of a fee simple absolute?

A fee simple absolute has no specified end date (i.e., it is potentially infinite). A fee simple absolute can be passed from one holder to another forever.

What is the duration of a fee simple determinable?

A fee simple determinable has a potentially infinite duration. It could be passed down from one holder to another forever. However, unlike the fee simple absolute, a fee simple determinable will automatically terminate and possession will ripen in favor of the grantor at the moment an event specified in the conveyance occurs. In this case, the grantor is said to hold a corresponding future interest known as a possibility of reverter.

Which present possessory estates correspond to a possibility of reverter and the power of termination, respectively?

A fee simple determinable is the present possessory estate corresponding to a possibility of reverter, and a fee simple subject to a condition subsequent is the present possessory estate corresponding to the power of termination. In a fee simple determinable, fee simple ownership will revert automatically to the grantor upon the specified event. Thus, the grantor is said to hold a possibility of reverter. At the instant the specified event occurs, the grantor assumes fee simple absolute ownership, without the need for any further action. In a fee simple subject to a condition subsequent, the holder of the power of termination (also known as the right of entry) does not automatically assume ownership of the property when the stated event occurs. Rather, he or she must take some affirmative action to assume ownership, such as by filing eviction proceedings.

In general, what sort of language is used to create a fee simple determinable?

A fee simple determinable is typically created with language of time or duration. Examples include: "until," "while," "so long as," or "during." No additional language is needed to create the possibility of reverter, which is presumed to arise as part of the conveyance.

What is the duration of a fee simple subject to a condition subsequent?

A fee simple subject to a condition subsequent has a potentially infinite duration. It could be passed down from one holder to another forever. However, unlike the fee simple absolute, a fee simple subject to a condition subsequent will terminate, and possession will ripen in favor of the grantor, if (1) an event specified in the conveyance occurs, and (2) the grantor takes some affirmative step to reclaim possession of the property (e.g., commencing eviction proceedings or demanding that the grantee vacate the premises). In this case, the grantor is said to hold a corresponding future interest known as a power of termination. Until the grantor exercises the right of entry, lawful possession remains with the grantee.

In general, what sort of language is used to create a fee simple subject to a condition subsequent?

A fee simple subject to a condition subsequent is usually created with conditional language, such as: "but if," "on condition that," "unless," or "provided that." The conveyance will sometimes expressly mention the right of entry, though this is not required. Ho

What is a fee simple subject to an executory limitation?

A fee simple subject to an executory limitation is a fee simple estate followed by a future interest known as an executory interest. Put more simply, a fee simple subject to an executory limitation is a fee simple estate that, upon the occurrence of a specified event, will divest in favor of someone other than a grantor.

What is a future interest?

A future interest is an estate in land that exists in the present, but will confer the right to possess the property only if some future event occurs. A future interest always follows a prior estate, whether a present estate or another future interest. Thus, the future interest will ripen into possession if some future event terminates the prior estate and changes the future interest into a present estate.

O owned Blackacre in fee simple absolute. O conveyed Blackacre "to A for so long as he never steps foot in the country of France." What interests do A and O hold in Blackacre?

A holds a fee simple determinable, and O holds a possibility of reverter. A fee simple determinable is typically created with language of time or duration. Examples include "until," "while," "so long as," or "during." When a grantor conveys a fee simple determinable to a grantee, the grantor retains a possibility of reverter, because the property will revert back to the grantor automatically upon the happening of the stated occurrence. Here, O conveyed Blackacre "to A for so long as" he never steps foot in France, which created a fee simple determinable due to the temporal limitation. O retains a possibility of reverter, because possession of Blackacre will revert automatically to O if A steps foot in France. Accordingly, A owns Blackacre in a fee simple determinable, and O holds a possibility of reverter.

What is a life estate?

A life estate is a present estate that exists for the life of a specified person and terminates when that life ends. The holder of the life estate is called the life tenant. Typically, to create a life estate, a grantor with an estate of larger duration (e.g., a fee simple absolute) will convey a life estate to the life tenant and either retain a reversion or convey a remainder to a third person. When the life estate terminates, possession of the property will ripen in favor of someone other than the life tenant (usually in fee simple absolute). That person is said to hold a future interest known as a remainder (if the holder is a grantee) or a reversion (if the holder is the grantor of the life estate).

What is a possibility of reverter?

A possibility of reverter is a future interest that follows a fee simple determinable and vests in the grantor. Upon the occurrence of a specific event, the possibility of reverter will automatically become possessory and divest the fee simple determinable in favor of the grantor. At that point, the grantor will typically hold a fee simple absolute in the property.

What is a power of termination?

A power of termination, also known as a right of entry, is the future interest that follows a fee simple subject to a condition subsequent and vests in the grantor. Upon the occurrence of a specific event, the grantor will have the right to reenter and retake the property. Once the grantor does so (e.g., by commencing eviction proceedings), the fee simple subject to a condition subsequent will divest in favor of the grantor. At that point, the grantor will virtually always hold a fee simple absolute in the property. Until the grantor affirmatively exercises the right of entry, however, the fee simple subject to a condition subsequent will remain vested in the grantee. Many jurisdictions require the grantor to exercise the right within a reasonable time; some others impose a specific time limit by statute.

What is a present estate?

A present estate, also known as a present possessory estate, is an interest in land that affords its holder the present right to possess real property. No future event needs to occur before the holder may enter the property and take possession.

What is a remainder?

A remainder is a future interest that: arises at the same time its prior estate is created and by the same instrument; becomes possessory immediately once its prior estate naturally terminates, with no lapse in time (e.g., once a life estate terminates upon the end of the relevant life); never prematurely terminates its prior estate; vests only in a grantee, never in a grantor; and never follows a fee simple estate (because a fee simple estate has no natural termination). The only present estates a remainder can follow are the life estate, the fee tail, and the estate for years.

What are the two requirements for a remainder to be vested?

A remainder is vested if: (1) the person holding the remainder is a living person who can be specifically identified, and (2) there are no conditions precedent to the remainder becoming possessory, except the natural termination of the prior estate. In other words, nothing needs to happen before the transfer of the remainder to the grantee can be effectuated under the terms of the instrument of conveyance. In the case of a class gift (a gift given to a group of people), a remainder is vested, so long as there is at least one born and ascertainable member of the class, and there are no conditions precedent to vesting. A remainder that fails to meet any of these requirements is a contingent remainder.

What is a reversion?

A reversion is a future interest that vests only in the grantor that arises when the grantor: (1) conveys to a grantee an estate of lesser duration than the estate the grantor had before the conveyance, (2) without conveying the rest of the grantor's estate to someone else. In other words, the grantor has a reversion if he conveys less than all his estate.

What are the three present possessory estates a reversion may follow?

A reversion may follow a life estate, a fee tail, or an estate for years.

What is the primary difference between a shifting executory interest and a springing executory interest?

A shifting executory interest is one that, when it becomes possessory, divests an estate held by a grantee. A springing executory interest is one that, when it becomes possessory, divests an estate held by a grantor.

What are alternative contingent remainders?

Alternative contingent remainders are those created by the same instrument, which provides that the remainder will vest in one grantee if a certain event occurs but will vest in another grantee if the opposite event occurs. Typically, the remainder will vest in one grantee if a certain event does take place and another if that same event does not take place.

What is an executory interest?

An executory interest is any contingent future interest that (1) is held by a grantee and (2) does not meet the precise definition of a remainder. Most often, an executory interest either prematurely divests the prior estate (e.g., terminating a life estate before the end of the relevant life or a fee simple estate at any time) or becomes possessory sometime after the prior estate naturally terminates. Executory interests are always contingent, in that they always depend on a condition precedent to become possessory.

Between the life tenant and the future-interest holder, which party is generally responsible to pay special assessments on the property?

Between the life tenant and the future-interest holder, the life tenant is generally responsible to pay special assessments on the property (e.g., one-time property taxes to finance local improvements). However, in certain cases, special assessments may be equitably apportioned between the life tenant and the future-interest holder. Apportionment is most likely if the assessment is for an improvement or other benefit that will last longer than the life estate and continue to benefit the property itself after that time. In that case, the benefit will accrue to the future-interest holder, making it fair to charge that person with a portion of the assessment.

Between the life tenant and the future-interest holder, which party is generally responsible to pay the principal and interest on indebtedness secured by the property?

Between the life tenant and the future-interest holder, the life tenant is generally responsible to pay the interest on indebtedness secured by the property, and the future-interest holder is responsible to pay the principal. The life tenant's obligation to pay interest is, in some jurisdictions, limited to the income, profits, and rent the property generates. However, if the life tenant mortgages the life estate itself, and the future-interest holder is not obligated on the underlying debt, then both principal and interest are the life tenant's responsibility.

If a grantor conveys a contingent remainder, what interest is the grantor presumed to retain until the remainder vests?

If a grantor conveys a contingent remainder, the grantor is presumed to retain a reversion until the remainder vests in a grantee. This is a corollary of the general rule that a grantor retains a reversion if the grantor conveys less than all of his or her estate to someone else.

If a life tenant commits waste on the property, what general remedies are available to the holder of the remainder or reversion?

If a life tenant commits waste on the property, the general remedies available to the holder of the remainder or reversion are: money damages, an injunction against the waste, and forfeiture of the life estate. If forfeiture is the remedy, then the life estate will terminate immediately, and the corresponding future interest will ripen into possession.

If there is ambiguity about whether a remainder is vested or contingent, do courts generally resolve it in favor of finding a vested remainder or a contingent remainder?

If there is ambiguity about whether a remainder is vested or contingent, courts generally resolve it in favor of finding a vested remainder. This rule promotes certainty in the state of title to property.

In general, what sort of language is used to create and convey a life estate?

In general, a life estate is created and conveyed by language indicating that the grantor conveys the property to the life tenant "for life," if the estate is for the duration of the life tenant's life, or "for the life of" some other person. Additional language will typically convey a remainder to another grantee (e.g., "to A for life, remainder to B"). If not, the courts will presume that the grantor has retained a reversion.

What are the freehold estates?

In general, the freehold estates are those present estates that confer possession of the property for an indefinite period of time. In particular, the freehold estates are the: fee simple estates, life estate, and fee tail.

In general, what three rights are afforded to the holder of a present estate?

In general, the holder of a present estate has the right to do the following, with respect to the underlying real property: to use the property as the holder sees fit, to transfer all or some part of the holder's interest to another (though the holder may transfer no greater interest than he or she has), and to exclude others from entering or enjoying the property. These rights are limited, of course, by applicable law and any interests others may hold in the property.

What are the non-freehold estates?

In general, the non-freehold estates are those present estates that confer possession of the property for a definite period of time or, in the case of a tenancy at sufferance, for as long as the lessor allows possession to continue. In particular, the freehold estates are the various leasehold interests, namely the: estate for years, tenancy at will, periodic tenancy, and tenancy at sufferance.

In the context of remainders, what is the difference between a condition precedent and a condition subsequent?

In the context of remainders, the difference between a condition precedent and a condition subsequent is that between vesting a remainder and divesting one. That is, a condition precedent is an event that must occur for a contingent remainder to vest. By contrast, if a remainder has already vested, a condition subsequent will divest the remainder. In general, enabling conditional language like "if," "in the event that," or "provided that" signals a condition precedent. Negating language like "unless" or "but if" tends to signal a condition subsequent.

Is a fee simple absolute defeasible by any future event?

No. A fee simple absolute is not defeasible by any future event. Put differently, in a fee simple absolute, there is no corresponding future interest by which the estate may terminate, and possession may ripen in favor of one other than the holder. A fee simple absolute is, of course, subject to any encumbrances in favor of anyone other than the holder.

Is either the life tenant or the future-interest holder generally obligated to insure the property for the other's benefit?

No. Neither the life tenant nor the future-interest holder is generally obligated to insure the property for the other's benefit. Though the life tenant has a general duty to avoid committing waste, that duty does not require taking out insurance for the future-interest holder's benefit.

Traditionally, is the life tenant the only present-estate holder obligated to avoid committing waste?

No. Traditionally, the life tenant is not the only present-estate holder obligated to avoid committing waste. A lessee is also obligated to avoid permissive, ameliorative, and voluntary waste. However, in practice, the lessee's common-law duty to avoid waste is almost always significantly varied in the lease agreement.

What are the 10 present estates?

The 10 present estates are the: fee simple absolute, fee simple determinable, fee simple subject to a condition subsequent, fee simple subject to an executory limitation, life estate, fee tail, estate for years, also called estate for a fixed term, tenancy at will, periodic tenancy, and tenancy at sufferance. These estates all confer an immediate right to possess the property.

What are the four ways in which an executory interest differs from a remainder?

The four differences between executory interests and remainders are as follows: (1) A remainder will never divest the preceding estate before its natural expiration, but an executory interest may prematurely divest its preceding estate. (2) A remainder will never follow a fee simple estate, but an executory interest may follow a fee simple estate. If a executory interest does so, the preceding fee simple estate is called a fee simple subject to an executory limitation. (3) A remainder must become possessory, if at all, instantaneously at the natural expiration of the preceding estate. By contrast, an executory interest may become possessory at some point in time after the expiration of the preceding possessory estate. (4) Although remainders can be vested or contingent, executory interests are contingent; that is, some condition must occur before an executory interest becomes possessory.

A life tenant had a life estate in property encompassing 50 acres of forest and a farmhouse. After taking possession of the estate, the life tenant noticed the farmhouse roof had begun to leak in a few discrete spots, but the life tenant did not repair the roof at all. Over time, the life tenant also harvested all the timber on the property without the consent of any future interest holders in the property. The land was never previously used for timber harvesting. What types of waste has the life tenant committed?

The life tenant has committed permissive and affirmative waste. A life tenant commits permissive waste by failing to take reasonable steps to maintain the property so that it does not fall into unreasonable disrepair. A life tenant commits affirmative waste by making alterations that materially decrease the property's value, without the express consent of any reversioners or remaindermen. Mining or timbering are not affirmative waste if they occurred on the property before the creation of the life estate and were among the property's customary uses when the estate was created. Here, the life tenant's failure to fix the leaks caused the property to fall into disrepair. Further, the life tenant's timber harvest without consent materially decreased the property's value, and there was no prior timbering on the property. Thus, the life tenant has committed permissive and affirmative waste.

What is the life tenant's duty to avoid affirmative waste?

The life tenant's duty to avoid affirmative waste is the duty to refrain from altering the property in any way that materially decreases its value without the consent of the future-interest holder or express permission in the instrument of conveyance (e.g., harvesting timber or minerals, tearing down serviceable buildings, or polluting the soil). This duty is subject to various exceptions.

What is the life tenant's duty to avoid permissive waste?

The life tenant's duty to avoid permissive waste is the duty to take all reasonable steps to maintain the property, so that it does not fall into disrepair. This duty does not entail an obligation to make extraordinary repairs (e.g., replacing whole structures) or to make improvements. In some jurisdictions, this duty is limited to the rent, profits, and income the property generates. In other words, the life tenant need spend no more money on repairs than the property actually produces in rent, profits, and income—even if the reasonable repair costs exceed that amount.

What is the life tenant's obligation to avoid ameliorative waste?

The life tenant's obligation to avoid ameliorative waste is the duty to refrain from altering the character of the property without the future-interest holder's consent or permission in the instrument creating the life estate, even if the change increases the property's value. Ameliorative waste is permitted, however, if the alterations increase the property's value, and either: the future-interest holder does not affirmatively object, or a substantial change to local conditions has made the land's current use infeasible or unproductive.

What is the merger doctrine?

The merger doctrine is the rule that if all available estates in one parcel of land vest in a single person, those estates terminate. The person then holds a fee simple absolute in the property.

What is the open-mines doctrine?

The open-mines doctrine is the rule that the life tenant may continue any mining operations that existed on the property when the life estate was created. This doctrine does not permit the life tenant to expand the scope of mining operations, but merely to continue existing mining operations. The doctrine is an exception to the general rule that the life tenant may not harvest natural resources on the land without the consent of the future-interest holder or express permission in the instrument creating the life estate. Most courts apply the principles of the open-mines doctrine not only to minerals, but also to any other natural resources on the property, such as timber. Thus, the life tenant may continue any timbering or similar operation that existed when the life estate was created.

What are the three subcategories of vested remainders?

The three subcategories of vested remainders are: indefeasibly vested remainders, vested remainders subject to complete divestment, and vested remainders subject to open. An indefeasibly vested remainder is a vested remainder that is not subject to being terminated by a subsequent event or diluted by new additions to an open class of grantees. A vested remainder subject to complete divestment is a remainder that is subject to termination upon the occurrence of a specified future event, such as a condition subsequent. A vested remainder subject to open, sometimes called a vested remainder subject to partial divestment, is a vested remainder that is granted to a class, or group, of grantees, if the size of the class could change over time and affect each member's share.

What are the two types of future interests that correspond to a life estate?

The two types of future interests that correspond to a life estate are (1) reversions and (2) remainders. Once the life estate ends upon the death of the holder or another specified person, possession of the property will automatically and instantly pass to someone else. The person slated to receive possession when the life estate ends holds a future interest—either a reversion or a remainder. If the future interest is held by the grantor (the person who granted the life estate), the future interest is called a reversion. If the future interest is held by a grantee (someone other than the grantor), the future interest is called a remainder. At the termination of the life estate, the future interest becomes a possessory estate (usually a fee simple estate, but sometimes another life estate or an estate for years).

What language in an instrument of conveyance is necessary to convey a fee simple absolute?

To convey a fee simple absolute, the deed or other instrument need only provide for a conveyance of land from one party to the other—for example, "A conveys Blackacre to B." The language "to B" is enough. Historically, at common law, for a deed or other instrument to convey a fee simple absolute, the instrument had to contain language of inheritance—for example, "A conveys Blackacre to B and his heirs." If the instrument omitted the language "and his heirs," the instrument would convey a mere life estate, rather than a fee simple absolute. However, language of inheritance is no longer necessary to convey a fee simple absolute.

What are the six present estates into which a remainder can ripen upon becoming possessory?

Upon becoming possessory, a remainder can ripen into a: fee simple absolute, fee simple determinable, fee simple subject to a condition subsequent, fee simple subject to an executory limitation, life estate, or estate for years. A fee simple estate (usually fee simple absolute) is by far the most common of these. If the grantor had a fee simple estate upon creating the remainder, and the instrument does not specify that the remainder is for life or a term of years, then the remainder will ripen into a fee simple estate upon becoming possessory.

Upon becoming possessory, a reversion may ripen into one of which six present estates?

Upon becoming possessory, a reversion may ripen into a: fee simple absolute, fee simple determinable, fee simple subject to a condition subsequent, fee simple subject to an executory limitation, estate for years, or life estate. Fee simple estates, usually fee simple absolute, are the most common of these.

Can a life estate be set to terminate upon an event that occurs before the end of the life by which the estate is measured?

Yes. A life estate can be set to terminate upon an event other than the end of the life by which the estate is measured, provided the event occurs before the end of the measuring life. Typically, the instrument conveying the life estate will specify the condition. Alternatively, if the life estate is carved out of a larger estate that is itself terminable upon a future event (e.g., a fee simple determinable), the life estate will terminate when the future event occurs.

Does the life tenant owe the future-interest holder a duty to pay all regular, recurring taxes on the property?

Yes. The life tenant owes the future-interest holder a duty to pay all regular, recurring taxes on the property. In some jurisdictions, this duty is limited to any income, profits, or rent the property generates. In other words, as far as the future-interest holder is concerned, the life tenant is not obliged to pay any more in taxes than the property actually produces in income, profits, or rent, even if the taxes exceed that amount. However, as a practical matter, the life tenant must see that the full taxes are paid, or else the taxing authority will foreclose on the property.

Does the merger doctrine apply to life estates?

Yes. The merger doctrine applies to life estates. Thus, if both the life estate and its corresponding reversion or remainder vest in the same person, both will terminate. This, in turn, will give rise to a fee simple absolute in favor of that person.