Property Bar Exam Outline

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...

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