Property Unit 3 - Estates

Estates in land

ownership interest in land

Possessory estate

holder has the right to present possession (right to possess the land right now)

Nonpossessory estate

have the land but do not have the right to possess it right now (i.e. easement)

Freehold

Ownership

Non-freehold

landlord/tenant, leasing - not ownership

Freehold Estates

• fee simple absolute

• fee tail

• life estate

• defeasible fees

  • Fee simple determination (FSD)

  • Fee simple subject to condition subsequent (FSSCS)

  • Fee simple subject to an executory limitation (FSSEL)

Livery of Seisen

olden times – when you conveyed the property by giving the other person a rock or twig from that land, and then you would hit a child, who was there as a witness, so that they would always remember the land conveying occurred

Deed

• Can be passed through conveyance/grant

• alienable

• grantor - person giving

• grantee - person getting

Will

• Passed through devise

• Testator/testatrix - person giving

• divesee - person receiving

Intestate Succession

• Passed through descend

• Heirs - one who gets the property once the person dies - can’t determine until death

• Heirs apparent - heir before person dies (future heir)

  • Next of kin - when passing personal property through intestate succession

Inheritance Order for Intestate Succession (No will)

1. Issue (children/lineal descendants) and surviving spouse

2. Parents

3. Parent’s issue (siblings) (then adopted siblings count as full siblings, but half siblings can be treated differently)

4. Ancestors and collaterals (other blood relations)

5. Escheat (goes to the state)

Fee Simple Absolute

• From O to A and her heirs

• From O to A

• From O to A forever

Is alienable, devisable, and descendable

If type of estate is ambiguous court will assume fee simple.

• Modern approach - courts look to intent of the document (statutes of construction) - no magic words required

Cannot be conveyed to animals

Nemo dat quod non habet

No one gives what they don’t have - can only convey what you have

Life Estate

Grantee has possessory interest in property until they die

• Cannot be devised or descended.

• Corporations cannot have life estates but they can have pur autre vie.

• The holder of the remainder interest can prevent current interest holder from causing wast to property

Pur autre vie

Conveying a life estate - still tied to the duration of the grantor’s life.

Waste Doctrine - Common Law

Anything that alter the identity of the premises is waste, regardless of whether the act happened to be beneficial or detrimental to the future intent

3 Types:

• Voluntary waste

• Permissive waste

• Ameliorative waste

Voluntary Waste

results from affirmative acct that significantly reduces the value of the property (i.e. demolishing a valuable house)

Permissive Waste

results from failure to take reasonable care to protect the estate (e.g. failure to make minor repairs or to pay property taxes)

Ameliorative waste

results from an affirmative act that leads to substantial change in the property and increases its value (e.g. building a swimming pool).

Waste Doctrine - Modern View

Beneficial use (ameliorative waste) of the property is okay as long as you don’t decrease the property value.

Woodrick - plaintiff may still be entitled to payment to compensate for change in interest

Restraints on Alienation

Provisions in deeds or wills that prohibit or limit a future transfer of the property

• If a provision expressly prohibits the transfer of a fee simple, it is void against public policy

• Partial restraints on alienation that are reasonable with respect to duration, scope, and purpose are generally valid

• Discriminatory restraints are never okay - void for public policy (14th Amend.)

3 Types

1. Disabling Restraint

2. Forfeiture Restraint

3. Promissory Restraint

Disabling Restraint

prevents the transferee from transferring their interest

• Invalid for all interests

Forfeiture Restraint

leads to a forfeiture of title if the transferee attempts to transfer their interest

• ok for life estate

Promissory Restraint

stipulates that the transferee promises not to transfer their interest

• ok on life estate

Fee Tail

• From O to A and the heirs of her body

• A has fee tail and her heirs (lineal) will receive life estates after she dies

• O has possibility of reverter and would regain property if A’s entire familial line died out.

• Not devisable

• can disentangle a fee tail by transferring it to someone else, and then back

• Modern - majority jurisdictions treat fee tails as fee simple absolute

  • if words are not exactly right, court will interpret as fee simple

Term Estates

Grantee has possessory interest of a property for a certain period of time.

• From O to A for 10 years

  • A has a term interest for 10 years

  • O has a future interest (reversion)

• From O to A for 10 years, then to B

  • A has term estate for 10 years

Fee Simple Determinable

An interest in land that terminates automatically upon the occurrence of a specified condition.

• defining feature is right to immediate possession

  • automatically reverts to the grantor upon the occurrence of a stated event.

    • stated event causes both the fee simple to expire and the right of immediate possession to revert

    • stated event can be thought of as a condition precedent of the possibility of reverter and special limitation on the duration of the fee simple.

Magic words - Words of Duration

• so long as

• while

• until

• during

From O to A and her heirs so long as Blackacre is used for agriculture.

• A has FSD

• O has possibility of reverter if the condition doesn’t occur (transferor always has a possibility of reverter)

• FSD will expire when an owner dies intestate without an heir OR when the state event (non-agriculture use) occurs - whichever is first.

FSD is alienable, devisable, and descendible, but retain durational conditions.

Defeasible

the estate is set up to expire or be divested if some specific event occurs

Defeasible Fee Simple Estates

• Fee simple determinable

• Fee simple subject on condition subsequent

• Fee simple subject on executory limitation

For Grantors Only

Reversions

Possibilities of reverter

Rights of re-entry

For Persons Other than Grantors

Remainders

Executory Interests

Fee Simple Condition Subsequent

May be terminated at the election of the transferor when a certain condition/event occurs.

• does not end automatically, transferor has a right of entry upon stated event happening

• IF the stated event occurs, and IF the grantor elects to excercise the right of re-entry and retake possession, THEN the grantee’s estate is cut short (divested)

  • this contigency (2 IF’s) are the condition subsequent

Magic Words - Words of Condition

• Provided that

• But if

• On the condition that

• but in the event that

Right of Re-Entry

A future interest retained by a grantor when the grantor creates a fee simple on condition subsequent.

Right of entry is lost if delayed and delay is not reasonable

• policy reason - unlimited time for re-entry would discourage productive use of the land

Fee Simple on Executory Limitation

Defeasible fee simple that automatically transfers to a third party if a certain condition or event occurs (future interest in 3rd party)

Is alienable, devisable, and descendible

usually no prohibition on waste

Is automatic like a FSD

• O conveys to G and her heirs so long as Alaska does not secede from the US, then to M and heirs.

  • “so long as” creates creates fee defeasible, going to third party makes it a FSSEL. G has a FSSEL.

  • M is transferee and future interest follows a deafisible fee so M has an executory interest. M will have a fee simple absolute.

Estate Hypo: O conveys “to D for life, then to M and her heirs while the well continues to provide water.”

• D has a life estate

• M has a fee simple determinable

  • O has possibility of remainder - M is getting this after life estate, but there is a condition, so O has a remainder

Reversion

Transferor retains a reversion when they convey a smaller estate than they have

Reversion is alienable, devisable, and descendible.

Possibility of Reverter

Future interest retained by transferor who holds a fee simple absolute but conveys a fee simple determinable. If condition of fee simple ends, transferor regains interest automatically.

Possibility of Reverter is alienable, devisable, and descendible

Right of Entry

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

Right of entry is alienable, devisable, and descendible

Remainders

Future interest in a transferee that (1) is capable of becoming possessory immediately upon expiration of the prior estate and (2) does not divest (cut short) any interest in a prior transferee.

Means a remainder will only follow a life estate, term of years estate (leasehold) or fee tail

2 Types:

1. Vested Remainder

2. Contingent Remainder

Vested Remainder

The remainderman’s right to immediate possession is without pre-conditions (except expiration of the prior estate). More definite than contingent.

Ex. To A for life, remainder to B and his heirs” - B takes once the life estate ends

A remainder is vested if the remainderman is: born and ascertained, and no even needs to occur before possession.

3 Types:

1. Indefeasibly vested

2. Vested subject to divestment

3. Vested subject to open

Contingent Remainder

The remainderman’s right to immediate possession is subject to a condition precedent.

Ex. To A for life, remainder to B and her heirs if B marries C.

• B doesn’t get possession unless something happens first (has to marry C)

Ex. To B for life, then to C’s heirs — nobody has heirs until they are deceased. As long as C is alive, C’s actual heirs are unascertained.

Ex. To B for life and then, if C survives B, to C and his heirs.

Remainder is contingent if it is:

1. Subject to occurrence of a stated event

2. Conveyed to unascertained persons - remainder to B’s first child to reach age 21, and his or her heirs.

3. Conveyed to unborn persons - remainder to B’s next born child and his or her heirs

Indefeasibly Vested Remainder

A remainder that (1) is created in an ascertainable person and (2) is NOT subject to a condition precedent other than the natural termination of the prior estate

Ex. A to B for life, then to C

Ex. A to B for 10 years, then to C