Property Final - Estates in Land/Future Interests, Concurrent Interests and Eminent Domain

Types of concurrent interests

Joint Tenancy with the right of survivorship, Tenancy in Common, Tenancy by the Entirety, Community Property

(James v. Taylor)

Joint Tenancy with the right of survivorship

Joint tenants must share the 4 unities

1. Time - Each joint tenant must acquire their interest at the same time

2. Title - Each joint tenant must acquire title in the same instrument or adverse possessory activity - never by intestate succession

3. Interest - All shares must be equal (In quality, quantity, and rights), undivided, and of the same duration

4. Possession - at creation, each joint tenant must have a right to possession of the whole

Without all 4, the default is tenancy in common.

(James v. taylor)

Tenancy in Common

requires only the unity of possession - each tenant in common must have an equal right to possession and use of the whole. Is devisable/descendable

-Without consent from other tenants in common, individual interests are transferrable by deed, lease, will, or intestacy and can be mortgaged.

-While tenants in common can have different proportionate shares of a property, they have equal and undivided rights to use and possess the entire property.

-A person can't be a tenant in common until the person is entitled to possession or a present beneficial interest - for example - remainder people can't be tenants in common with a life tenant or among themselves.

Example - condominium - interior walls of personal space is held in FS; common elements are held with neighbors as tenants in common.

(tenhet)

Tenancy by the Entirety

only 19 states use this (~half of separate property jx's)- other states just use Joint Tenancy with the right of survivorship

Requires the 4 unities and marriage - right of survivorship to the other spouse, not devisable or descendable

No moiety, held only in the entirety by two people who are married. Marries couple as a governing union who own the property together

(Sawada)

Community Property

Only requires the unity of marriage. Is devisable/descendable

Co-tenant's liability for rent

Majority rule: a cotenant is liable to her fellow co-tenants for rent if the co-tenant has exclusive possession and either

(1) a contractual obligation to pay rent or

(2) the co-tenant in possession has ousted her fellow co-tenants (bad and liable for damages, but is a way to obtain exclusive possession).

Exception: Co-tenant not in possession only liable for their shae of carrying costs in excess of imputed rent from co-tenant in possession. (esteves)

Ouster test

1. Co-tenant in possession refuses to allow fellow co-tenants to share possession after the latter has made demand for possession (attempt to enter, co-tenant keeps them out), or

2. One co-tenant purports to convey sole ownership of the land, grantee enters into sole possession in reliance on conveyance, and other co-tenants have notice, or

3. One co-tenant assert a "hostile" claim of sole ownership and the other co-tenants have notice (adverse possession).

(esteves)

Co-Tenant Costs and Benefits

Types of Sharing Costs

Carrying Costs, Repairs, Improvements

(esteves)

Carrying costs of property

(taxes, mortgage, insurance) - the costs of basic ownership are generally shared in proportion to co-tenants’ ownership interests.

If one co-tenant pays more than their fair share, they can demand an accounting and have a right to contribution from the other co-owners.

(esteves)

Repairs

Co-tenants are generally responsible for their share of paying for repairs, but this is typically done at partition. will be entitled to what they paid (receipts)

(esteves)

Improvements

(an alteration that is not a repair) - majority rule is that co-owners aren’t obligated to contribute for improvements Improvements - May be entitled to a credit for the value increase of the property at partition (if there is one)

(esteves)

Co-tenants Sharing Rents and Profits

Statute of Anne: 1704 English statute requiring co-tenant to account for (pay out) any rents and profits she recieves from the property in excess of her just proportion.

Most American states adhere to statute of Anne (by statute or common law) - cotenant who derives income from non-tortious use of land that permanetly reduces value must account (pay) to other tenants.

Includes stripping the land of resources or renting the land. Business profits do not always falls under the statute of anne.

(esteves)

Unilateral Leasing

A co-tenant can't unilaterally lease co-owned property and promise the tenant exclusive possession.

(tenhet)

What happens if a co-tenant does unilaterally lease the property and promise exclusive possession?

-non-leasing tenant can sue for temporary or permanent partition if less than all land is leased

-non-leasing tenant can attempt to enter and then sue for ouster is lesee ousts - entitling non-leasing tenant to their share of reasonable rental value of leased land from lesee.

-Accounting - sue lessor co-tenant for accounting and collect proportionate share of net receipts received by lessor

Partition of Property

severing unity of possession and ending a concurrent interest - Any tenant in common or joint tenant has the right to sue for partition of the property a partition judgement ends the co-tenancy and distributed the assets. (arkland)

Partition in kind

Dividing property based on percentages of ownership - each person gets their share

preferred - majority rule, but in practice partition by sale usually is good - emotional connection test usually not effective. (arkland)

Partition by sale

(not preferred) selling property and distributing proceeds according to shares

Only allowed if

(1) in kind not feasible,

(2) one or more parties benefit from the sale,

(3) no party harmed by sale

The economic value of the property is not the exclusive test for deciding whether to partition in kind or by sale. ex. emotional interest (arkland)

Creditor Access to Marital Property

1. Wives cant own or control property; husbands’ creditors can reach all marital property, including Tenancy by the Entirety (tbte)

2. Debtor spouse’s interest in tbte property can be reached, but subject to non-debtors right of survivorship

3. Majority Rule: Married couple is a separate legal entity from the individuals; creditors of individuals can’t reach property held as TBtE.

4. Debtors spouse’s survivorship interest in tbte property can be reached

(Sawada)

Marital Property - Separate Property

three categories: during, divorce, death

During: Basic rule = property is separately owned by the spouse who acquires it

Divorce: most separate property jx mandate equitable distribution of the property owned by each spouse

Death: Most states offer surviving spouse a forced share (or elective share) of the decedents estate

(guy v. guy)

Marital Property - Community Property

AZ, CA, ID, LA, NV, NM, TX, WA, WI

During: All earning during marriage and all assest acquired from those earnings are owned by both spouses equally

Divorce: All community property is divided between the spouse

Death: Descendants may devise their half of the community prop and all

separate prop as they desire. Other half belongs to the surviving spouse

(guy v. guy)

Moiety

an individual co-tenant is recognized as having powers of an owner in themselves rather than those powers belonging to a group of owners collectively - proportionate share that someone owns in a concurrent interest

Eminent Domain Amendments

5th amendment: nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. All takings issues derive from the 5th amendment. Takings clause limits the govt eminent domain power by adding the public use and just compensation requirements.

14th amendment: nor shall any State deprive any person of life, liberty, or property, without due process of law

10th amendment: reserves powers not specifically delegated to the federal government to the states or the people. the state's inherent authority to regulate for the common good, including public health, safety, and morals.

Eminent Domain

Allows the state, federal, and local governments to take property from a private owner who refuses to sell voluntarily.

(kelo)

Condemnation

the process of using eminent domain to take property

Per se takings

1. the government requires an owner to suffer a permanent (or intermittent) physical invasion of property (loretto v. teleprompter; cedar point nursery v. hassid), OR

2. the regulation completely deprives an owner of ‘all economically beneficial use’ of their property (Lucas v. South Carolina Coastal Council)

Outside of the per se takings categories, whether a regulation rises to the level of a public taking depends on

1. The economic impact on the property owner; effect of the regulation on the property's fair market value

2. the event to which it interferes with distinct investment-backed expectations; whether the regulation interferes with the property owner's legitimate and reasonable expectations about how they could use or develop the property

3. AND the character of the government action; whether it is a physical taking or a regulatory taking, and whether the government action is designed to protect the public from harm

(Penn Central)

Public Use takings requirement

standard easily met when govt takes land that will be physically used by the public or by govt employees.

The court will uphold a taking under the public use clause if it satisfies the rational basis review (is rationally related to a public purpose).

Rational basis review is an extremely defferential standard to the legislature. If there is any way the plan will promote health, safety, and general welfare, that is a valid use of police power.

(Kelo)

Just Compensation requirement

Generally is the fair market value of the property

Physical Taking

Government is demanding an actual property interest using its taking powers.

Regulatory Taking

Regulation in place that property owner is claiming takes away from their property rights.

While property may be regulated to a certain extent, if the regulation "goes too far", it may be characterized as a taking. (Pennsylvania coal)

Physical vs. Regulatory takings

To differentiate between due process challenges and takings challenges, look to the relief the plaintiff wants:

if plaintiff wants just compensation (money), its a takings challenge.

If plaintiff wants to strike the law altogether, it is a substantive due process challenge (rational basis review of exercise of police powers).

(Lingle v. Chevron)

Severance

converting a joint tenancy with right of survivorship into tenancy in common. Can be done by conveying to third party and conveying back. This will break the unities of Joint tenancy with right of survivorship and creates a tenancy in common.

Decedent

person who has died

Intestate

dying without a will

Heirs

people who survive a decedent and are designated as intestate successors under state's probate code

Issue

lineal descendants after decedent (kids, grandkids, great-grandkids) regardless of marriage of parents, includes adoptions

Ancestors

lineal predecessors before decedent (parents, grandparents, etc.)

Collaterals

blood relatives who aren't Issue or ancestors (siblings, nieces/nephews, aunts/uncles, etc.)

Escheat

property of an intestate decedent without heirs is conveyed to state

Remainder

future interest given to grantee that follows natural end of preceding estate

3 types of modern estates in land + their words of limitation

Fee simple absolute - "And her heirs"

Fee Tail - "And the heirs of her body"

Life Estate - "for life"

3 types of defeasible estates

- Determinable

- Subject to condition subsequent

- Subject to executory limitation

End date - fee simple absolute

No end date

End date - fee tail

Ends when line of descendants dies out

End date - life estate

Ends at death of life tenant

Life estate pur autre vie

holder isn't measuring life (To A for the life of B)

End date - Term of Years

Ends after a specific amount of time (term)

Words of purchase

who is given something (To A)

Words of limitation

identifies the estate they’re being given as either fee simple, fee tail, life estate, or term of years

Words of additional limitation

identifies whether estate is defeasible (could end earlier than it otherwise would)

Rule: omission of words of limitation

"And her heirs" is presumed when no words of limitation are present → fee simple

Opposite of rule from Cole v. Steinlauf, where omission of heirs implied a life estate

Rule: Ambiguous terms in conveyance

When the terms of conveyance are ambiguous, the court will assume owner conveyed fullest interest possible. If testatrix wants to convey anything small, they must be explicit.

3 prong test:

What is the fullest possible estate to convey?

Is there limiting language in the conveyance?

If wording is ambiguous, assume that the owner conveyed the fullest estate possible

(White v. Brown)

Rule: Rights of remainder holder and waste

A remainder holder may enjoin a life tenant from destroying structures on the property if doing so constitutes waste

(Woodrick v. Wood)

Defeasible estate (definition and case)

A grantor who conveys a fee simple with limitations that could end the estate conveys a defeasible estate

(Paul Smith's College v. Roman Catholic Diocese of Ogdensburg)

Defeasible estates where future interest is held by grantor

- Fee simple determinable

- Fee simple subject to condition subsequent

Defeasible estates where future interest is held by 3rd party grantee

Estate Subject to Executory Limitation

Future interests for defeasible estates

- Possibility of reverter

- Right of Entry

- Executory interest

Estate determinable - WOAL and characteristics

WOAL = durational: while, so long as, during

Characteristics: When/if additional limitation occurs, the estate automatically ends

Future interest: Grantor holds possibility of reverter

Estate subject to Condition Subsequent - WOAL and characteristics

WOAL = conditional: but if, on condition that, provided that, however

Characteristics: When/if additional limitation occurs, estate does not end until the original owner acts affirmatively to regain the property

Future interest: Grantor holds right of entry

Rule: Expiration of right of entry

Grantor has a reasonable but limited amount of time to declare breach and exercise right of entry; failing to do so within the time allotted causes grantor's rights to expire

(Metropolitan Park District v. Heirs of Rigney)

Estate subject to Executory Limitation - WOAL and characteristics

WOAL = durational OR conditional

Characteristics: future interest is held by 3rd party grantee (NOT grantor). If/when additional limitation occurs, estate ends automatically

Future interest: Grantee holds executory interest

Reversion

Future interest remaining in the GRANTOR when granting a vested estate of lesser duration than she begin with

Occurs with certainty - end of life estate, fee tail, leasehold (not defeasible fee simple)

Possibility of reverter

Future interest retained by GRANTOR who holds fee simple absolute, but conveys fee simple determinable

Occurs with uncertainty - possible, not certain, that fee simple determinable will end

When condition is met, automatically goes to grantor

Right of Entry

Future interest retained by GRANTOR who holds fee simple absolute, but conveys fee simple subject to condition subsequent

Occurs with uncertainty - possible, not certain, that fee simple subject to condition subsequent will end

When condition is met, DOES NOT automatically go to grantor -- Does not become possessory until and unless grantor takes affirmative steps to regain possession

Remainder

Definition: future interest where present possessory estate ends naturally, and the future interest is held by a third party (not grantor)

2 prongs:

Is capable of becoming possessory immediately upon expiration of prior estate

and does not divest any interest in prior transferee

Test - vested v. contingent remainder

2 part test:

Ascertained person

- Born

- Identified

Condition precedent?

- Condition that must be met before remainder becomes possessory other than natural termination of prior estate

4 types of remainder

Indefeasibly vested remainder

Vested remainder subject to divestment

Vested remainder subject to open

Contingent remainder

Indefeasibly vested remainder

Created in an ascertainable person

Not subject to condition precedent other than natural termination of prior estate

Certain to become possessory estate

Vested remainder subject to divestment

Remainder that is vested, but subject to condition subsequent

Interest must be ready to become possessory unless (not if) specified event occurs

Interest can be divested (terminated)

Vested remainder subject to open

Held by one or more living members of a group/class that may be enlarged in the future (e.g., future interest created when there are only 2 more, but if more are born, must be shared among all)

Contingent remainder

Either given to an unascertainable person OR subject to condition precedent

Executory Interest

Future interest in grantee that must divest another estate to become possessory

Opposite of remainder

Springing executory interest

Executory interest that follows interest in the grantor

Shifting executory interest

Executory interest that follows interest in a grantee

Rule: Rule against Perpetuities (RAP)

Contingent interests must vest, if at all, within 21 years after the death of all lives in being at the time the interest is created

Must either vest or forever fail within 21 years of the death of the last life in being

(Jee v. Audley)

Estates subject to RAP

Contingent remainders

Remainders subject to open

Executory interests