MBE Property
Terms
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- Which interests are "defeasible fees"?
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Fee Simple Determinable
Fee Simple Subject to a Condition Subsequent
and
Fee Simple Subject to an Executory Limitation - What follows a Fee Simple Determinable?
- Possibility of Reverter in the Grantor
- What follows a Fee Simple Subject to a Condition Subsequent?
- A Right of Re-Entry (Power of Termination) in the Grantor
- What follows a Fee Simple Subject to an Executory Limitation?
- an Executory Interest in the Grantee
- What are the 2 types of Non-Fee Present Possesory Interests?
- Life estate & Term of Years
- What are the Grantee and Grantor's future interests in Life Estates & Terms of Years?
- The Grantor has a Reversion and the Grantee has a Remainder
- What is the "default" future interest?
- Reversion
- What are the 2 types of Executory Interests?
- Shifting & Springing
- What is shifting?
- Grantee to Grantee
- What is springing?
- Grantor to Grantee
- What are contingent remainders?
- The takers are unknown or the condition has not happened yet
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Hypo:
O transfers Blackacre to A & her heirs - Fee Simple Absolute - fully transferrable, no future interests are present
- Hypo: O transfers Blackacre to A
- Fee Simple Absolute - Note that the court will tend to find a fee simple absolute if it is ambiguious, the court likes to create a whole estate
- Hypo: O transfers Blackacre to A and the heirs of his body
- At common law, this is a fee tail. For the most part, fee tails have been abolished. Therefore, this is a fee simple absolute
- Hypo: O transfers Blackacre to A for so long as liquor is never sold on Blackacre.
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Fee Simple Determinable - when liquor is sold on the property, no further action is needed by O. The property automatically 'revert' back to the ownership of O or his estate.
* O has a future interest called the Possibility of Reverter. - In a Fee Simple Determinable does the effect of the condition go along with the sale of the land?
- Yes, the automatic right for reversion of the property back to O is still there, even if someone else buys the land from A
- Hypo: O transfers Blackacre to A until liquor is sold on Blackacre.
- Also a Fee Simple Determinable & the Grantor has a future interest called a Possibility of Reverter
- What kinds of language is used to create a Fee Simple Determinable?
- Adverbial words that denote time such as: For so long as, as long as, until, while or during
- Hypo: O transfers Blackacre to A, but if A ever sells liquor on Blackacre, O's heirs may reenter Blackacre and terminate A's interest.
- This language makes the present possessory interest a Fee Simple Subject to a Condition Subsequent. It also has express language of re-entry. The Grantors heirs have a Right of Re-Entry that they may exercise at the time the condition is met by bringing an ejectment action against A.
- Hypo: O transfers Blackacre to A, provided that if A ever sells liquor on Blackacre, O's heirs may reenter Blackacre and terminate A's interest.
- Here again, the language makes the present possessory interest a Fee Simple Subject to a Condition Subsequent. It also has express language of re-entry. The Grantors heirs have a Right of Re-Entry that they may exercise at the time the condition is met by bringing an ejectment action against A.
- Can the Right of Re-Entry be sold or given to others? (In other words, is it alienable?)
- In most states, this future interest is only alienable at death and not during the life of O.
- Hypo: O transfers Blackacre to A for so long as A never sells liquor on Blackacre; If A does sell liquor on Blackacre, O or his heirs may re-enter Blackacre and terminate A's interest.
- This hypo has the language of both, but it will most likely be interpreted as a Fee Simple Subject to a Condition Subsequent, giving O a future interest of the Right of Re-Entry. When language is ambiguious as this, the courts like to consture the language in favor of the Grantee.
- Hypo: O transfers Blackacre to A, but if A ever sells liquor on Blackacre, to B and his heirs.
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Here the present possessory interest is a Fee Simple Subject to an Executory Interest.
Why? Because the future interest in another grantee. The estate will transfer automatically to B upon the happening of the condition, with no further action by B necessary. - What future interest is associated with a Fee Simple Subject to an Executory Interest?
- It is called an executory interest and it rests with the secondary Grantee. This interest can be transferred during life (inter vivos) or at death. It is a "shifting" executory interest because it moves from one grantee to another.
- What are the only two future interests that can be created in a grantee?
- Only remainders and executory interests. Therefore, if the interest does not follow a life estate, it must be an executory interest.
- Hypo: O transfers Blackacre to A when and if A marries B.
- O has a fee simple subject to an executory interest and A has a "springing" executory interest. When the marriage happens, A will "divest" the estate of O.
- Hypo: O transfers Blackacre to A for life and one year after A's death to B.
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This is also a springing executory interest because O has title during the year between A's death and B's taking of title.
A has a life estate.
O has a reversion.
B has a springing executory interest - it "springs" out of O's reversion. - Who can sue for "waste"?
- Only a remainderman, not those with executory interests.
- In what ways can a life tenant consume or exploit natural resources?
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- Prior Use Dcotrine: if the prior owner did these things
- Needed to make repairs (ex. timber)
- Express permission from the Grantor
- If the life tenant can show this is the only suitable use for the property(such as a rock quarry)
- Otherwise, a life tenant may not consume or exploit natural resources.
- This is voluntary/affirmative waste - What is the most common type of waste?
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Permissive waste - neglect, the life tenant has a duty to make ordinary repairs, but not capital improvements
This includes the payment of property taxes and interest on the mortgage; otherwise, he is liable for waste.
This does not include the principal or insurance on the mortgage because those are capital expenditures. - What is Ameliorative waste?
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An improvement to the property that changes the physical structure (even if the change is an improvement that increases the value of the property).
The life tenant is not usually found liable. - Hypo: O transfers Blackacre to A for her life, remainder to B's children. B has one child, C.
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A has a life estate. Here, C does not have a remainder because the class may expand (B may have more children)and C's interest might shrink.
C has a vested remainder subject to open (also called a vesed remainder subject to partial divestment).
Both A and C can transfer their interests. Of course, A cannot transfer his interest at death. -
Hypo:
O transfers Blackacre to A for her life, then to B for his life, remainder to C. -
A has a present possessory interest, a life estate.
B has a subsequent life estate, known as a vested remainder in a life estate.(Vested because we know how the taker is - B)
C has a vested remainder, the only thing that can follow a life estate, no matter how many there are. - What is an implied life estate?
- A life estate that results from poor drafting. "I transfer Blackacre to A and when A dies to B". Sometimes this appears on the MBE.
- What 2 things can an executory interest cut short?
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1. Fees - usually Defeasible Fee Estates
2. Vested Remainders - What does the word "Vested" mean?
- - fixed, accrued, absolute or not contingent
- What is voluntary (or affirmative) waste?
- This does not mean that the life tenant had the intention to waste necessarily, it is any overt conduct that damages the property. (ex. driving your car through the garage door by accident)
- What is the exception to the Prior Use Doctrine?
- Open Mine Exception - life tenant may continue to mine the property using the current mine, but cannot open a new mine
- What does a life tenant NOT have to pay on the property?
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Insurance or mortgage principal
- it is likely there will be a question on the MBE involving the 2 duties of a life tenant and the 2 duties of the remainderman. It will make you choose which duties belong to which person. -
Hypo:
O transfers Blackacre to A for her life, remainder to A's first child to reach the age of 21. A has one child, B, who is 20. -
A has a life estate.
"the first child to reach 21" has a contingent remainder because B might die (it may not necessarily be B); there's a reversion in O. -
Hypo:
O transfers Blackacre to A for her life, remainder to A's first child to reach the age of 21. A has one child, B, who is 16. A dies when B is still 16. -
A has a life estate.
- If c/l rules (no statutory modifications to the c/l) - Rule of Destructability of Contingent Remainders would apply; here the future interest dies when A dies, reverts back to O
- Modern Law: reversion to O kicks in when A dies, but not as fee simple absolute; it would be a fee simple subject to an executory liitation; when B (or any of A's children) reaches 21, they would cut O's interest short (B has a springing executory interest) - What is the Doctrine of Destructability of Contingent Remainders?
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If the condition is not met (not vested)at the time title is to transfer, the remainder destructs
- Abolished in some jurisdictions -
Hypo:
O transfers Blackacre to A for her life, remainder to B if B survives A. -
A has a life estate.
B has a contingent remainder because the contingency is not set off by commas.
(If it was set off by a comma, it would be vested remainder subject to total divestment)
- These are all set by the punctuation. Without a comma, it is so tied up in the condition that it is a Contingent Remainder; the condition is required for the transfer. - What is the most important difference between a Contingent Remainder and a Vested Remainder Subject to Total Divestment?
- The Contingent Remainder is subject to the Rule Against Perpetuities and the Vested Remainder Subject to Total Divestment is not.