Property Bar Exam - Bar Exam Outlines

Property

THE PRESENT ESTATES

• Fee Simple Absolute

  • "to A" or "to A and his heirs"

  • Absolute ownership of potentially infinite duration

  • Freely devisable, descendible and alienable

  • No accompanying future interest

• Fee Tail

  • "to A and the heirs of his body"

  • Abolished in OK

  • If did exist future interest= reversion if in grantor, remainder if 3rd party

• Defeasible Fees

  • Fee Simple Determinable: HARSH

    • "to A for so long as…" "to A during…" "to A until…"

    • Grantor must use clear durational language

    • If stated condition occurs, forfeiture is automatic

    • Freely devisable, descendible and alienable but always subject to the condition

    • Future Interest= Possibility of Reverter in Grantor

    • FSDPOR

      • Frank Sinatra Didn’t Prefer Orville Redinbacher

      • Fee Simple Determinable Possibility of Reverter

  • Fee Simple Subject to Condition Subsequent

    • "To A, but if X event occurs, grantor receives the right to re-enter & retake"

    • Grantor must use clear durational language AND carve out right to re-enter

    • Not automatically terminated, but can be cut short at grantor option, if stated condition occurs

    • Future Interest= Right of Entry, power of termination

      • Think Bobby Brown "My Perogative"

  • Fee Simple Subject to Executory Limitation:

    • "to A, but if I even occurs, then to B"

    • Automatically terminated in favor of someone other than grantor

    • Future Interest= Shifting Executory Interest

  • NOTE:

    • words of mere hope, desire, intention not enough to create defeasible fee

    • Absolute restraints on alienation void

      • Void if absolute ban or right to sell or transfer, that is not linked to a reasonable time limited purpose

• Life Estate

  • Estate measured in explicit lifetime terms and NEVER in term of years

  • "to A for life"

    • Here ^ future estate= reversion, so at end of A life, goes back to O or his heirs

  • Life Estate Pur Autre Vie:

    • Life estate measured by life other than the grantee

    • "to A for life of B"

  • Life Tenant's entitlement are rooted in doctrine of waste

    • Life Tenant is entitled to: all ordinary uses & profits from the land

    • Life Tenant must not commit waste

      • Not hurt the future interest holders

  • Waste:

    • Voluntary or affirmative

      • Overt conduct that causes drop in value (ie. willful destruction)

      • Voluntary waste & exploiting natural resources:

        • General Rule: LT must not consume or exploit natural resources

        • Exceptions: PURGE

          • Pre-existing use

            • Open mines doctrine

          • Repairs (and maintenance)

          • Grant (if granted the right to exploit)

          • Exploitative (land only suitable for exploit)

    • Permissive

      • Occurs when land is allowed to fall into disrepair, neglect

      • LT must simply MAINTAIN premises in reasonably good repair

      • LT obligated to pay all ordinary taxes on the land, TO THE EXTEND of INCOME OR PROFITS

        • If no income or profits, LT required pay all ordinary taxes to extend of premises fair rental value

    • Ameliorative

      • LT must not engage in acts that will enhance property's value, unless:

        • All future interest holders are known and consent

          • This protects sentimental value

  • Life Estate Future Interest:

    • If held by grantor= reversion

    • If 3rd party= remainder

FUTURE INTERESTS

• Future Interests Capable of Creation in Grantor

  • Possibility of Reverter (FSDPOR)

    • Only goes with Fee Simple Determinable

  • Right of Entry, or Power of Termination (My Perogative)

    • Only goes with Fee Simple Subject to Condition Subsequent

  • Reversion (catch all/default)

    • Reversion is the future interest that arises when a grantor who transfers an estate of lesser quantum than she started with, other than FSD and FSSCS

• Future Interests in Transferees

  • Remainders

    • Always accompanies a preceding estate of known fixed duration, usually life estate or term of years

    • Remainderman waits patiently for preceding estate to naturally end

    • NEVER follows a defeasible fee

• Vested Remainder

  • If it is BOTH

    • Created in ascertained (known) person AND

    • Not subject to any condition precedent

• Indefeasibly Vested Remainder

  • No strings attached. Holder is certain to acquire an estate in future

• Vested Remainder Subject to Complete Defeasance (total divestment)

  • Right to possession could be cut short even though he exists when interest created

  • Look for conditional language in a transfer following language that taken alone and set off by commas, would created a vested remainder, the condition is a condition subsequent, and you have a vested remainder subject to complete defeasance

    • Ex. To A for life, remainder to B, provided that if B dies under age of 25, to C. A is live & B is 20.

      • A life estate

      • B vested remainder subject to total divestment/defeasance

      • C shifting executory interest

      • (b can take even if A dies before 25, but is haunted until he reaches 25)

      • O has reversion cause could be that C nor C's heirs will exist if condition breached.

• Vested Remainder Subject to Open

  • Remainder vested in group of takers (class or category), at least 1 of whom is qualified to take

  • BUT each class member's share is subject to partial diminution cause additional takers can still join in

    • Open Class

      • Can still join

    • Closed Class

      • No others can join

  • Class is closed whenever any member can demand possession

• Contingent Remainder

  • Unascertained person (unborn or unascertained person)

  • Or

  • Subject to condition precedent, (appears BEFORE the language creating the remainder or woven into grant to remainderman)(look for a pre-requisite)

  • or both

    • If the preceding estate ends before the condition occurs, then O's successors or O hold estate subject to the springing executory interest and once condition occurs then the remainder takes.

• OK does not follow the Rule in Shelley's Case: So if O grants "to A for life, then, on A's death, to A's heirs" and A is still alive

  • A has life estate

  • A's unknown heirs (cause not dead yet) have contingent remainder

  • O has reversion, since A could die w/o heirs

• OK DOES follow Doctrine of Worthier Title

  • Rule against remainder in grantor's heirs

  • Applies when O is alive, tries to create a future interest in his heir

    • Ex. O, alive, conveys "to A for life, then to O's heirs"

  • Rule:

    • Contingent remainder in O's heirs is VOID.

    • A has life estate and O has reversion

• Executory Interest (sinister, spoiler)

  • Shifting Executory Interest

    • Always follows a defeasible fee and cuts short someone other than grantor

    • Ex. To A and her heirs, BUT IF B returns from Canada sometime next year, to B and his heirs

      • Doesn’t violate RAP cause of the 1 year limit on B's power

  • Springing Executory Inerest

    • Cuts short O, the grantor

    • Ex. O convey's To A, if and when he marries". A is unmarried

      • A has springing executory interest

      • O has fee simple subject to A's springing executory interest

      • Doesn't violate RAP cause will know by end of A's life if condition met or not

RULE AGAINST PERPETUITIES

• Rule

  • Certain kinds of future interests are void if there is any possibility, however remote, that the given interest may vest more than 21 years after the death of a measuring life

• 4 Step Technique for Assessing RAP Problems

  • One: Determine What Future Interest Create

    • RAP does NOT apply to

      • Future Interests in O

      • Indefeasibly Vested Remainders

      • Vested Remainders Subject to Complete Defeasance

    • Does apply potentially to:

      • Contingent Remainders

      • Executory Interests

      • Certain vested remainders subject to open

  • Two: Identify the Conditions Precedent to the Vesting of the Suspect Future Interest

  • Three: Find a Measuring Life

    • Look for person alive at the date of the conveyance and ask if that person's life or death is relevant to the condition's occurrence

  • Four: Ask will we know, with certainty, w/in 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take?

    • If so, then conveyance good

    • If not,( if possibility, however remote, that the condition precedent could or could not occur more than 21 years after the death of a measuring life) the future interest is void.

    • So get stuck with the preceding estate and then the reversion in grantor.

  • 2 Bright Line Rules

    • A gift to an open class that is conditioned on the members surviving to an age beyond 21 violates the common law RAP

      • Bad as to one, bad as to all

    • Many shifting executory interests violate RAP

      • An executory interest w/ no limit on the time within which it must vest violated RAP

  • Charity to Charity exception

    • A gift from one charity to another will not violate the RAP

  • Cy Pres Doctrine: OKLAHOMA

    • "As near as possible"

    • If given disposition violates the rule, a court may reform it in a way that most closely matches grantors intent while still complying w/ the RAP

CONCURRENT ESTATES

• Joint Tenancy

  • 2 or more own with rights of survivorship

    • When 1 dies his shares go automatically to survivor

  • Must have 4 unities: TIPP

    • TIME

    • TITLE INSTRUMENTS

    • INTERESTS IDENTICAL

    • POSSESS THE WHOLE RIGHTS

  • Grantor must clearly express the right of survivorship

    • OK can be implied by conduct as to essential elements)

  • JT interest is alienable, but not devisable or descendible

  • Can use straw man in other states, OK no need use strawman can convey to self & other in same instrument

  • Severance of JT

    • SPAM

      • Sale

        • Can do secretly

        • Severs...