Real Property - Possessory Interests: Estates in Land

Pass by will

Pass by the statutes of intestacy if the holder dies intestate (without a will)

Transferable inter vivos (during holder's lifetime).

(1) Fee Simple Absolute
(2) Defeasible Fees
(2)(a) FS Determinable
(2)(b) FS Subject to Condition Subsequent
(2)(c) FS Subject to Executory Limitation
(3) Life Estate

"To A" or "To A and his heirs"
- Creates absolute ownership of potentially infinite duration.
- Freely devisable, descendible, and alienable.
- No accompanying future interest.

Fee simple estates that can be terminated upon the happening of a stated event.
- Include: FS Determinable, FS Subj to CS, FS Subj to EL
- Words of mere desire/intent/purpose are insufficient to create defeasible fee.
- Bans on power to sell/ transfer are void unless linked to reasonable time-limited purpose.

"To A for so long... to A during... to A until..."
- Terminates if stated condition is violated and automatically reverts to the grantor.
- Devisable, descendible, and alienable, but always subj to the condition.
- Future Interest = Possibility of Reverter (FSD POR)

"To A, but if X happens, grantor reserves the right to reenter and retake." (must use clear durational language and carve our right to reenter)
- Most states agree it's devisable and all states agree it's descendible.
- Future Interest = Right of Entry (right to terminate) and must be expressly reserved

"To A, but if X event occurs, then to B."
- If the condition is broken, estate automatically forfeited in favor of 3RD PARTY, rather than to grantor.
- Future Interest = Shifting Executory Interest

Measured by the life or lives of one or more persons, never in terms of years.
- Future Interest = Reversion

Life estate measured by the life of someone other than the grantor.
- Future Interest = Reversion

- A life tenant is entitled to all ordinary uses and profits from the land,
- but cannot do anything that harms the interests of a remainderman or reversioner (future interest holders).
- 3 Types of Waste: voluntary/affirmative, permissive/neglect, ameliorative.

Future interest in the grantor
- Accompanies fee simple determinable

Future interest in the grantor
- Accompanies only the fee simple subject to condition subsequent.

Future interest in the grantor
- Arises in a grantor who transfers an estate of less quantum than she started with, other than a fee simple determinable or a fee simple subject to condition subsequent.

Future interest in the grantee or third person
- Created in an existing and ascertained person AND not subject to a condition subsequent.
- 3 Types
- (Patiently waits for prior estate to run its course. Preceding estate usually a life estate or term of years. Never follows a defeasible fee)

Best type of future interest in the grantee or third person.
- Holder is certain to acquire an estate in the future with no strings attached.
(Patiently waits for prior estate to run its course. Preceding estate usually a life estate or term of years. Never follows a defeasible fee)

"To A for life, and, if B reaches the age of 21, to B." If B attains age 21 during A's lifetime, B's contingent remainder is transformed into this type of remainder.

Future interest in the grantee or third person
- Taking may be cut short/subject to a CONDITION SUBSEQUENT:
- "To A for life, remainder to B, but if B dies under age 25, to C." (B has this type of remainder).
- (Patiently waits for prior estate to run its course. Preceding estate usually a life estate or term of years. Never follows a defeasible fee)

Future interest in the grantee or third person, created in a class of persons (with common characteristic) that is certain to become possessory, but is subject to diminution (i.e. birth of additional persons to share in remainder as a class).
- At least one member of the group must be qualified to take possession.
(Patiently waits for prior estate to run its course. Preceding estate usually a life estate or term of years. Never follows a defeasible fee)

"To A for life, then to B's children." A is alive. B has two children, C&D. C&D's interest is this.

- Class is open if others may enter.
- Class is closed when its maximum membership has been set. Persons born after are shut out. Exception: Womb Rule- a child of B in the womb at A's death will share with C&D.
- "To A for life, then to B's children." A is alive. B has two children, C&D. The class closes: (1) at B's death b/c no more children, and (2) according to the rule of convenience, at A's death even if B is still alive, b/c C&D can take possession.

Future interests created in unborn or unascertained persons, or subject to a CONDITION PRECEDENT.
- "To A for life, then, if B graduates from college, to B." B's interest.
- Validity: the Rule of Destructability, the Rule in Shelley's Case, Doctrine of Worthier Title

This type of condition must be satisfied BEFORE the remainderman has a right to possession (= PREREQUISITE)

- Historical: CL, contingent remainder was destroyed if it failed to vest before or upon termination of preceding freehold estate.
- Today: rule abolished. If B is not yet 21 when A dies, O holds the estate subject to B's springing executory interest. B takes upon reaching 21.

- At CL, the rule would apply to one setting: O conveys "To A for life, then, on A's death, to A's heirs." A is alive.
- Historically, present and future interests would merge giving A a FS Absolute.
- Today: rule abolished. A would have a life estate and A's unknown heirs would have a contingent remainder.
- O has a reversion since A could die w/o heirs.

Rule applies when O, who is alive, tries to create a future interest in his heirs.
- O conveys "to A for life, then to O's heirs." Contingent remainder in O's heirs is VOID. A has a life estate and O has a reversion.

Future interests created in a third party that cut short preceding estates or follow a gap after them.
- Two types.
- (Menacing executioner -- cuts short someone other than the grantor)

- Future interest that cuts short someone OTHER THAN the grantor and
- Always follows a defeasible fee and cuts short interest of someone other than the grantor.
- "To A and her heirs, but if B returns from Canada next year, to B and his heirs." B's interest.

- Future interest that cuts short the GRANTOR or his heirs' interest.
- "To A, if and when he marries." A's interest.

- Conduct that causes a decrease in value.
- Life tenant must not consumer or exploit natural resources on the property (timber, oil, minerals) UNLESS:
- Used prior for exploitation (may continue to mine but not open new mines), making reasonable repairs, expressly granted that right, or the land is suitable only to exploit (quarry).

- Conduct that causes a decrease in value and occurs when life T fails to reasonably protect/preserve land.
- Life T obligated to: (1) maintain land and structures in a reasonable state or repair, (2) pay interest on mortgages (not principle), (3) pay ordinary taxes on the land, and (4) pay special assessments for public improvements of short duration.
- Life T is NOT obliged to insure premises for benefit of remainderman and not responsible for damages caused by 3rd party tortfeasors.

- A change that benefits the property economically.
- Life tenant must not engage in acts that will enhance property’s value unless all future interest holders are known & they consent.

(1) maintain land and structures in a reasonable state or repair
(2) pay interest on mortgages (not principle)
(3) pay ordinary taxes on the land, and
(4) pay special assessments for public improvements of short duration.
- Not obliged to insure premises for benefit of remainderman and is not responsible for damages caused by third party tortfeasors.

- Pass with ownership of the land
- A once movable chattel that:
Objectively shows the INTENT to permanently improve the realty (meaning to remove it would cause substantial damage).
- Items that have become incorporated into the structure of the realty always become part of the realty.

T must not remove it (commit voluntary waste), no matter that she installed it.
- Ex: heating systems, customized storm windows, a furnace, certain lighting installations.
- T MAY remove if: does not cause substantial harm to the premises
- Express agreement between L and T is binding if they agree that installation is not to be deemed a fixture.
- Regardless of agreement, items that have become incorporated into the structure of the realty always become part of the realty.

Manifest intent of annexor determines whether chattel is a fixture.
- Factors when evaluating INTENT:
(1) relationship between annexor and premises
(2) degree of annexation
(3) nature and use of the chattel
- Constructive annexation -- article of personal property ("accession") becomes an integral part of the property, even though it's not physically annexed to the property.

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

- Contingent remainders, executory interests, and vested remainders subject to open (class gifts)
- Gift to an open class conditioned on members surviving to an age beyond 21 violates CL RAP.
- Many shifting executory interests violate RAP. An executory interest with no limit on time within which it must vest violates RAP.
- Gifts between charities does not violate RAP.