Property Estates

Transferor Future Interests

Reversion, Possibility of Reverter, Right of Entry

Transferee Future Interests

Remainder-vested (indefeasibly, subject to divestment, subject to open) or contingent | Executory interest- shifting or springing

Reversion

Transferor retains this when she conveys a smaller vested estate than the one she has. It is the future interest remaining in the transferor when she grants a vested estate of lesser quantum (potential duration) than she began with

Ex. O owns fee simple absolute in Greenacre (potentially infinite duration), conveys a life estate to B. O retains a reversion by operation of law. When B’s life estate ends, O will again have a fee simple absolute in Greenacre.

Possibility of Reverter

Retained by transferor who holds fee simple absolute, but conveys a fee simple determinable. There is a possibility that the FSD might end, the is future interest gives the transferor the right to possession if it terminates.

Ex. O FSA conveys Greenacre “to B and her heirs until the land ceases to be used as a farm.” If the farm use ends (developed into industrial park), B’s estate end automatically

What is the term for relatives like aunts, uncles, cousins, and brothers?

collaterals

Devisee

a beneficiary of real property in a will

Intestate

die without a will

Devise

leave property to someone in a will

Heir

this term applies only when there is no will

Decedent

the dead person

issue

a person’s children or grandchildren

ancestors

a person’s parents, grandparents, and great grandparents

bequest

an item of personal property disposed of by will

testate

someone who dies with a will

escheat

when someone does not have heirs/did not devise their property

The property escheats to the state

words of purchase

the part of the conveyance that tells you who is receiving the conveyed interest

words of limitation

part of conveyance that tells you what kind of interest a person is receiving

What are the words of purchase/limitation and what estate does it convey?

O to A and her heirs

WOP: "to A" WOL: "and her heirs"; fee simple

WOP/WOL/Estate

O to A for 2 years

WOP: O to A, WOL: for 2 years; term of years

WOP/WOL/Estate

O to A and the heirs of his body

WOP: O to A, WOL: and the heirs of his body, fee tail

WOP/WOL/Estate

O to A for life

WOP: O to A, WOL: for life, life estate

WOP/WOL/Estate

O to A for the life of B

WOP: O to A, WOL: for the life of B; life estate pur autre vie

What estate are absolute?

Only fee simple

What are inherently limited estates?

fee tail, life estate, term of years

What kinds of estates “end naturally”?

fee tail, life estate, term of years

an estate subject to a condition subsequent

does not automatically end upon the happening of a limiting condition, allows the grantor to postpone the decision about whether to enforce the condition, occurrence of the condition triggers the grantor’s right to interrupt the prior estate

Words or phrases of “temporal limitation” that signal a determinable estate

until, during, while, long as

Words or phrases of “express condition” that signal an estate subject to a condition subsequent

however, on condition that, but if, provided if

fee tail

Duration: determined by the lives of lineal descendants of a particular person

Required possession to move from the eldest son to eldest son and so on, as long as the blood line lasted

Reversion future interest grantor

fee simple absolute

Creation: no special words are needed. If A holds a fee simple and conveys “to B” B now owns a fee simple

Duration: potentially infinite

Alienable, Devisable, and Inheritable

alienable

the property is able to be sold or transferred to another party without restriction

devisable

capable of being transferred by will

inheritable

can be passed down to heirs

Future interests retained by transferor

reversion, possibility of reverter, right of entry

Future interests created in transferee

Remainder (indefeasibly vested remainder, vested remainder subject to divestment, vested remainder subject to open, contingent remainder), executory interest

Reversion

Owner transfers a vested estate of lesser quantum than she has, alienable, devisable, and descendible

Possession is automatic

Possibility of reverter

Owner transfers a determinable estate

alienable, deviasable, and descendible in almost all states

Possession is automatic

Right of entry

Owner transfers a an estate subject to condition subsequent

alienable, deviasable, and descendible in almost all states

Holder must take action to end estate

Remainder

Interest is capable of becoming possessory immediately at expiration of prior estate and does not cut it short

Alienable, devisable, and descendible

Possession is automatic

Executory interest

Interest must divest or “cut short” another estate or interest to become possessory

Alienable, devisable, and descendible

Possession is automatic

 If you have a 3rd party that will get it in the future on the triggering to a condition it is fee simple subject to executory limitation

Vested Remainder

1.     Created in an Ascertainable Person:

a.      Who is an “ascertainable person”? A person who is both alive and identifiable at the time of the transfer.

2.     NOT subject to a Condition Precedent:

a.      A condition precedent is a condition that must be met before the remainder can become possessory, other than the natural termination of the prior estate.

Contingent Remainder

EITHER NOT BOTH

1.     Given to an Unascertainable Person:

a.      Who is an “unascertainable person”? A person who is either not yet alive or not yet identifiable at the time of the transfer.

2.     Subject to a Condition Precedent:

a.      A condition precedent is a condition that must be met before the remainder can become possessory, other than the natural termination of the prior estate.

Vested remainder subject to open

a vested remainder held by one or more members of a class that may be enlarged in the future.

Example: O conveys “to A for life, then to B’s children.” B is alive and has one child, C. C’s remainder is vested, but his share may become smaller in the future if more children are born.

Vested remainder subject to divestment

a vested remainder that is subject to a condition subsequent.

Example: O conveys “to A for life, then to B, but if B does not live to age 21, then to C.” B’s remainder is vested; but it will end if a condition subsequent to the grant occurs—if B does not live to age 21.

Indefeasibly vested remainder

created in an ascertainable person and not subject to a condition precedent.

Example: O conveys “to A for life, then to B.” B is ascertainable and no condition precedent must be met before B can take possession.

Springing Executory Interest

an executory interest that follows an interest in the transferor.

EX. O conveys to A 15 years from now

O has retained a fee simple subject to an executory interest

This is creating in executory interest in the future which will divest O of his fee simple

Shifting Executory Interest

an executory interest that follows an interest in a transferee.

life estate pur autre vie

life estate limited by the duration of another person

Fully transferable during the measuring life

Only when the measure life dies does the life estate die

Defeasible Fees

fee simple estates that may be terminated by the occurrence of a stated event

Fee simple determinable

created with durational language (so long as, while, during, until)

automatically terminates upon the happening of the stated event

EITHER a possibility of reverter follows this interest (estate automatically reverts back to the grantor when the stated event occurs) this is presumed if not expressly stated OR

an executory interest- the estate automatically passes to a third party when teh stated event occurs

Rule Against Perpetuities

No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest

fee simple subject to a condition subsequent

limited in duration by specific conditional language (but if, provided that, on condition that)

Terminated when (1) the condition occurs (2) the grantor’s conveyance explicitly retained the right to terminate (3) the grantor (or successor in interest) affirmatively demonstrates the intent to terminate

Life Tenant’s Rights

• Possess property

• Lease property & collect rents from lessee

• Take natural resources from property when grantor expressly or impliedly gave life tenant this right

• Sell or mortgage life-estate interest (i.e., right of alienation)

Lost Property

owner unintentionally dropped or lost property

Finder’s Rights to Lost Property

Belongs to finder unless finder was trespassing, true owner is found, or property was found in a highly private location

Misplaced

owner reasonably seems to have intentionally placed item in location but appears to have forgotten it

Finder’s Right misplaced

Finder’s right is inferior to the original owners right & then to landowner’s right to it

Abandoned Property

owner fully intended to leave property & gave up title & possession of it

Finder’s Rights Abandoned

property belongs to finder

Adverse Possession Elements

1. Actual possession

2.  Exclusive Possession

3. Open and Notorious Possession

4. "Adverse and Hostile" Possession (some states also require a "claim of right"

5. Continuous Possession

6. For the Statutory Period

Actual Possession

Claimant must physically use the land in the same manner that a reasonable owner would given it’s character, location, and nature

Exclusive Possession

claimants possession must not be shared with the owner or with public in general

Open and Notorious Possession

Claimants possession must be visible and obvious, so if owner made a reasonable inspection of the land, he would become aware of the adverse claim

Adverse and hostile possession

Possession authorized by owner does not meet this

Some states say this is met only if claimant believes in good faith that they own the land

Most states claimant’s state of mind is irrelevant

Rarely states require bad faith, intending to take land from the owner

Continuous Possession

Must be continous as a reasonable owner would be, given character, location and nature of land

For the Statutory Period

Period ranges from 5-40 years depending on state

Typically 10, 15, or 20 years

Tenants in Common

each tenant has a separate but undivided interest in the whole property (rights to use All of it)

Own fractional interests in whole

Language: To A and B as tenants in common

Alienable, devisable, descendible

Joint tenancy

Each has a separate but undivided equal interest in the property with right of survivor ship

Language: : to A and B as joint tenants with right of survivorship

Alienable ( but transfer interviews will sever the JT with respect to that co-tenant. That co tenant becomes a tenant in common; the others remain joint tenants with respect to one another

Four unities

Right of Survivorship

on death of one joint tenant nothing “passes”, remaining joint tenant is freed of the rights of the decedent

Joint Tenancy Four Unities

Time: parties must receive or have interests vest (interest that will transfer by will, or trust simply the time you receive the interest) at the same time

Title: All Jts must acquire title by the same instrument (in the deed, will, whatever all tenants would need to be named)

Interest: all parties must have equal undivided shares and identical interests measured by duration

Possession: each party must have an equal right to possession of interest in the whole property (per my et per tout- by the share and by the whole)

Severance of the Four Unities

if the unities are present and are changed, the estate becomes a TIC

Process: all JT’s agree to dissolve the estate

Unilateral: One JT sells their interest to a 3rd party (3rd has a TIC, other JTs have JT with each other still) (if only 2 then just a TIC)

Action for partition: court divides property physically and apportions parts to each JT individually OR court sells property and divides the process among the JTS