Professional Documents
Culture Documents
FREEHOLD ESTATES
Defeasible Estates *
Fee Simple O to A (and his heirs) so long Possibility of Executory Interest
Determinable as liquor is not sold on reverter – as soon as
property then to O and his condition is broke,
(time words) heirs the property returns
O → A as long as . . .then → to grantor in fee
O and his heirs Magic Words: so long as, simple absolute
during, while
Fee Simple Subject to O to A (and his heirs) on Power of Executory Interest
a Condition condition that liquor is not termination (right of
sold on the property then to O entry, right of
Subsequent and his heirs reacquisition). When
(condition words)
grantor exercises
O → A provided that . . . then Magic Words: on condition right of termination
→ O and his heirs that, provided that he gets land in fee
simple absolute.
Life Estates O to A for life Reversion – at end Vested Remainder
of A’s life, goes back O → A for life → B
O → A for life to O Contingent Remainder
O → A for life → B if B
survives A
Executory Interest
O → A for life → then in
10 years to B
* The difference between Fee Simple Determinable and Fee Simple Subject to Condition
Subsequent is the magic words, however, courts favor non-forfeiture and are likely to
favor Fee Simple Subject to a Condition Subsequent in cases of ambiguity.
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I) NON – DEFEASIBLE ESTATES
B. Fee Tail
1) Definition – Designed to keep property in family indefinitely, not able to be
sold.
2) Example – O to A and the heirs of his body: O to A and his bodily heirs
*these are magic words necessary to create a fee tail
3) History – Statute de Donis. Recognized the fee tail, in 1285. Successive life
estates continued indefinitely until the line of decent died out. The king disliked this
statute because it prevented him from taxing land upon transfers. Also, any grantee in
present possession of a life estate could not grant or lose (to king or creditor) any more
than his life estate.
1472 King destroyed the fee tail through common recovery which was a
fictitious law suit allowing the current owner to sell the property.
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C. Fee Simple Determinable v. Condition Subsequent
1) Courts tend to favor the fee simple subject to a condition subsequent because
they tend to rule in favor of non-forfeiture, inherent in the power of termination. (Only in
situation where it makes a difference – cases of ambiguity where it effects the rights of
the parties.)
3) Economic Considerations – Who gets money that is generated from land when
condition is broken?
a) Fee simple determinable – proceeds go automatically to the grantor
b) Fee simple subject to a condition subsequent – proceeds go to grantor
ONLY after exercising the power of termination.
Court ruled that it was a covenant and the Board of Education retained the
property. The Court will strictly interpret the words used in deeds. When a conveyance
contains only a clause of condition or of covenant, such clause does not usually indicate
intent to create a fee simple determinable (Restatement of Property). The Hagamans did
not use the proper magic words and did not create a fee simple subject to a condition
subsequent. If the magic words are not included the courts tend to construe a covenant or
a trust. Reaffirms the court’s tendency to eliminate the “dead hand of the past” and will
rule in order to prevent forfeiture.
1) Make sure the intent is clear, spell out intent by using specific phrases such as
“defensible estate” “fee simple subject to a condition subsequent” and “fee simple
determinable”.
2) Use the words “revert to grantor” and “magic words” (see A(3) and B(3)
3) Look for cases in jurisdiction where the court ruled that a fee simple
determinable was created and copy the language.
E. Restraints on Alienation
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1) Definitions
2) Restraint in general
a) It is ok to restrain the use but not the user (example: Mountain Brow
Lodge No. 82 v. Toscano – land must be used for lodge purposes—in effect restraining
the free alienability of land. The court ruled in favor of lodge bc they can sell the
property for a charitable cause, thus using it for lodge purposes.)
c) Examples:
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a) life tenant is responsible for necessary repairs and normal maintenance
during the life estate
b) Improvements that are necessary to preserve and protect the estate, the
life tenant can make the remainderman pay the difference (undetermined).
3) Waste
b) If life tenant creates waste they must either 1) pay damages or 2) forfeit
property
d) the Life tenant only gets paid by remainderman only gets paid by
remainderman it repairs are necessary and expensive.
4) Measuring Life
a) Examples:
i) “to my son and daughter for life” 1) until the last person dies;
2) as long as they are both alive; 3) separate the shares – each keeps share of property for
life.
ii) Testator “for life to my son and daughter and to the survivor
of them.” Joint life estate as long as they are both alive and when one dies, the life estate
ends and the survivor has a fee simple absolute.
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iii) Testator “to my wife for life, but if she (bitch) should
remarry, then to my son” 1) if she remarries, wife is measuring life for son’s life estate
or 2) wife has life estate and son gets fee simple if she remarries (most used by courts).
6) Four Corners Rule - have to stay within the four corners of the will, you can’t
look for outside guidance to find out intentions of testator.
b) Promote alienability
c) Avoid Intestacy
A) Definitions
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B) Remainder
3) A remainder cannot follow a fee simple defeasible because it does not come to
a natural end.
D) Contingent Remainder
1) Who/ If Contingency
Example: A → B for life. When B dies the property immediately reverts back to A.
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V) RULE AGAINST PERPETUITIES
A) Definition: For a contingent future interest1 to be valid, the interest must vest2 , if it
vests at all3 within 21 years after some life in being when the interest is created4.
(Rephrased def: for a contingent interest to be valid, we must be able to determine with
complete certainty that the interest will not become a vested remainder or present
possessory interest after the Rule’s deadline (life in being plus 21 years).
B)Definition Breakdown:
2) Vest: become a vested remainder or the holder must gain the property as a
present interest. Example: fee simple.
3) if it vests at all: The rule does not require an interest to vest before the deadline
passes, the deadline is a life in being plus 21 years, it requires us to predict with certainty
that if an interest is ever going to vest it will vest before the deadline passes.
4) after some life in being when the interest is created: in the case of an inter
vivos grant, pick the life of a person alive when the grant was made. In the case of a will,
pick the life of a person alive when the testator died. (life in being)
C) Purpose: to destroy remote future interests. Consistent with the court showing
hostility towards remote interests in the past.
D) History
2) 1631 – First case with Rule against Perpetuities destroyed executory interest
and some contingent remainders.
E) Mechanics
1) Rule effects two kinds of interests (any interest the grantor holds is valid)
a) contingent remainders
b) executory interests
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2) Determinable Date – 21 plus “life in being”
F) Examples:
1) O → A for life and then to the first child who graduates from VLS. Assume
that A has children and none has graduated from VLS.
With A as the measuring life – The first child to graduate may be a child who is
born after O makes the grant. The child might graduate more than 21 years after A dies.
Thus, it cannot be determined with certainty that the interest will vest before the deadline
or will never vest.
With one of A’s children alive as the measuring life – it is possible that the first
child to graduate will be a child born after O makes the grant. It is possible that a child
will graduate more than 21 years after the life in being. Therefore, it cannot be
determined that the interest will vest with certainty.
2) By will, T devises property “to A for life, remainder to those children of A who
attain 21.” At the time of T’s death, A has no children.
Grant is valid, because it can be determined with certainty if the property will vest
or not vest within the deadline.
The remainder is a contingent remainder and must satisfy the rule to be valid.
A is the only possible measuring life within the facts (no children are born). All of A’s
children will be born before A dies. Also, all of A’s children will turn 21 within the
deadline (A’s life plus 21 years). It is a possibility that A may have no children or that
they may die before reaching 21. However, we will know that if the contingent
remainder is going to vest, it has to vest before the deadline. It will not vest only after
the deadline.
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6) A leaves everything by will to “my first grandchild to attain the age of 21 years
(At A’s death, A has one daughter, D, who is childless) – VALID
7) O makes an inter vivos gift to “the first child of B to attain the age of 25 years.”
(B is alive and has one child, C, who is 24 years old.) – INVALID
3) Try to identify any (only has to be possible) under which the interest in
question might vest after the deadline.
5) If a series of events does exist, pick another life in being and start over
6) If no series is found, the interest is valid. Try another measuring life. If there
are no more measuring lives left that gives the proper deadline, the interest is valid
7) Once a measuring life gives a deadline for which the interest is valid, stop. The
interest is valid under the Rule.
3) Rule is arbitrary
4) Ties up property if the “wait and see” rule applies – wait until the deadline
passes to see if the interest will vest rather than saying the grant is invalid because of a
possibility that the property will not vest.
1) Use a measuring life that will last a long time i.e. last survivor or all lineal
descendants; last grandchild of the grantor, etc.
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VI) WILL DRAFTING
A) Wills are governed by Statute – no wills accepted until 1540, statute of wills – allows
people to choose to pass property by devisees.
C) Signing will – Wills require 2 or 3 witnesses; also have client sign all pages in margin
to show nothing was added.
E) Self-Proving Clause/Affidavit.
G) When devisees are minors – it is required that a guardian and a trustee are named –
parents choose age of guardianship and trustee.
per stirpes: divided equally between children, grandchildren share the child’s
interest
per capita: equally divided among all survivors (children and grandchildren alike).
B) 4 types of L/T estates – it must fit in one of these “pigeon holes” – no Hybrids!
2) Periodic Tenancy
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a) tenancy last over continuous periods, succeeding periods of time, it
could potentially last forever, goes on infinitely.
b) Notice is required
3) Tenancy at Will
4) Occupancy at Sufferance
b) doesn’t pay rent – if rent is paid, they are considered a T and there is no
set time limitations.
5) General Issues
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C) Type of Legal Agreement – Contract v. Property
This is a special kind of contract law that developed over time – the lease, an
agreement with obligations on both sides, creates an interest in land.
a) Independent covenant – not vital to the lease, if broken, the lease continues and
damages can be awarded.
E) Delivery of Possession
a) occurs when someone is supposed to move in and an old tenant is still there.
b) English Rule (Majority Rule) – L has to deliver; L has right to issue summary
process because L is in position to take preventative measures
c) American Rule (Minority Rule) – L says that possession was already delivered
and new tenant has legal possession once the lease is signed. Once legal possession is
given to the T, he has legal rights and L has no legal possession over the property. If T
had wanted actual possession, it should have been stipulated in the lease.
d) Policy Analysis – there are two innocent parties in the lease the landlord and
the new tenant. It is a question on who is going to be left with the problem. There is a
good argument to allocate risk to L when 2 innocent parties are involved because L is in a
better position to alleviate risk.
e) New T has possession on first day and must take care of any trespass after legal
possession occurs.
1) Effects Test – look at effect of L’s policy, Does it have discriminatory effect?
a) Tenant can argue that the L’s rule disproportionately effects a certain
minority group, according to statute.
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c) Courts tend to give L’s the benefit of determining their own business
decisions.
1) Self-help
b) statutory lien
ii) Under the lien, L has interest in T’s property from beginning of
lease
iii) L’s prefer liens because T knows about lien from beginning of
lease and cannot contest it.
c) distraint
iv) This remedy has never been popular in this country. Some
states have modified it and now requires a sheriff; many states
have replaced it with statutory liens.
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2) State Action – In order to exercise distraint, it must be authorized by a statute,
but the statute is not enough to constitute state action. The action must be done by agent
of the state.
4) Acceleration Clause- L can ask for the balance of the term of the lease
immediately after T has failed to pay. If L forces T to pay the entire lease then the T can
not be evicted
5) Withhold Security Deposit- If T fails to pay rent then L can withhold security
deposit to cover the cost of the rent.
6) Sue for entire damages (accepting or rejecting surrender) If T fails to pay rent
or abandons property.
iii) Reserved Rental – Future rental that has not yet been paid.
b) If L refuses T’s surrender, the lease remains in force and T has to paid
back rent as well as prior rent not paid.
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ii) There is a trend in the law where the landlord is a duty to
mitigate. L must try to find a new tenant. If successful, the landlord must subtract the
new tenant’s rent from the reserved rental that the defaulting tenant owes.
i) Notice
ii) confrontation of witnesses
iii) counsel
iv) decision maker based on evidence of hearing.
H) Landlord Duty
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2) Covenant of quiet enjoyment (an essential covenant that goes to heart of
lease)
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4) Enforce the Housing Code
iii) Damages
1) Partial Breach – T pays partial rent calculated by
reasonable market value with Housing Code violation – difficult to calculate. (Not real
contract remedy because contract doesn’t allow partial recovery)
2) Full Breach – T pays no rent while the breach continues
3) No Breach (de minimus) – change in possession; L wins
a) Marini v. Ireland – T’s toilet broken and leaking and the L did not
repair after being notified many times. T hired plumber to fix toilet and offset cost by
deducting bill from rent. L moved to dispossess T.
1) Lower Court said that L did not have a duty to repair.
2) Issues:
i) No covenant of quiet enjoyment in New Jersey so the
court finds an express covenant through the language of the lease.
ii) T did not use traditional remedies: terminating lease OR
stopping payment of rent and created new remedy.
3) Remedy of Self Help – can use self help to repair essential
facilities of the apartment if the L fails to do so after being put on notices of the condition
or after the T has made a reasonable effort to contact the L. Can then deduct the amount
paid from the rent.
4) Limitations of Self Help
i) Only applies to Vital facilities
ii) Limit on what T can spend on self help depending on
jurisdiction (Ex: California – one month’s rent; PA – reserved rental)
iii) T must try to give timely and adequate notice
iv) L has to fail for an adequate period of time to make
repair.
**Tenant’s best weapon is to withhold rent. However, you run a risk of being evicted.**
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e) Right to Safe Premises – Common Areas – L’s Tort Liability –
Common Law Rule; Cannot hold someone liable for the criminal acts of a 3rd party.
Exceptions to Common Law: inn-keepers; common-carries, business open to public
Modern Law trend – L is responsible for foreseeable criminal activity – criminal conduct
is foreseeable because L has failed to provide safeguards.
B) Joint Tenancy –
1) Joint Tenants have a right of survivorship – whoever lives longest gets
the property in fee simple.
2) undivided ownership
3) Destroyed by:
a) equal agreement
b) unilateral action – if one party losses (by creditor) or sells share,
creditor/buyer becomes a tenant in common.
4) Must have 4 Unities
a) time – title must vest at the same time
b) title – all tenants must acquire title by same document
c) Possession – undivided interest in the whole
d) Interest
i) interest must be the same size ( ½, ½, etc)
ii) both parties have same common law estate (both fee
simples, life estates, etc.)
5) In cases of ambiguity, the court will favor a tenancy in common
because it is more stable and both parties retain future interest in property.
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6) Example: A, B, & C have a joint tenancy. A conveys interest to D. D
has a tenancy in common with B & C, who are joint tenants with right of survivorship
with respect to each other.
TENANCY IN COMMON
Joint Tenancy
1/3 D 2/3 B &C
D) Hass v Hass – deals with common law problem – cannot be both grantor and
grantee of a joint tenancy because 2 of the 4 unities will not be satisfied (time and title).
1) Remedy for problem – use a strawman – a person (i.e. paralegal,
secretary, real estate agent etc.) who gets transferred the property and at the same time the
strawman transfers the property to the two other people in a joint tenancy.
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C) In most states in a tenancy by the entirety, you cannot collect on one party’s
debt. To take action on the tenancy by the entirety there has to be a joint debt. [except in
NJ]
D) Example: King v. Green – Marie had property and court has Marie’s property
converted to tenancy by the entirety. Marie owed money to Phillip and he forces a sale of
Tenancy by the entirety. Marie’s interest was sold to Crowell. The Tenancy by the
entirety remains and Phillip and Crowell sell interest to Smook and Green buys the
property with mortgage and tenants. In New Jersey, the right of survivorship can be sold.
Could not happen in other states because original sale could never take place – not a joint
debt. Normally, only way to end tenancy by entirety is by mutual assent or divorce.
Dissent – court will discourage a reading like this because the holding encourages
a gambling event because if you buy a life interest component, you would have to hope
that the other spouse died first. Tempts creditors to speculate. People who do not know
each other are joined as co-owners of property.
F) Married Woman’s Act – Married woman has same rights as a single woman in
terms of property.
After Act:
1) Neither can alienate share of tenancy by entirety; or
2) both can alienate share of tenancy by entirety (Green); or
3) Tenancy by entirety is abolished as part of old regime; or
4) W has same rights as single females; but single females cannot hold
tenancy by entirety so she has no new rights.
A) Partition
1) Partition in Kind – divide property in separate tracks – divide by
percentages owned.
2) Partition by Sale – sell property and split the proceeds
3) Common law favors in kind because the tenants are able to retain the
land. Also, in partition by sale, the buyer knows that the land has to be sold and will bid
less. Also, a problem with partitioning built land because it is hard to divide an apartment
house, etc.
4) Partition by sale is more common because the parties can do it
themselves they don’t have to go to court.
5) Partition is a matter of RIGHT.
6) Partition available for :
a) joint tenancy
b) Tenancy in common
c) CANNOT partition tenancy by entirety.
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B) Contribution
1) An action by tenant (in possession) who has paid necessary costs to
preserve property.
2) Examples
a) Principle Mortgage payment – necessary payment (have to pay
contribution)
b) Interest mortgage payment – necessity (of contribution) varies
by state
c) Necessity (of contribution) of Property taxes vary by state
C) Accounting
1) An action brought by non-possessory co-tenant for money generated by
rental value or mesne ( The profit earned from property). The only time that this action
would truly benefit the out of possession cotenant is when the property had raw minerals
that were being sold for profits. Then the out of possession tenant could get half the
rental value and the mesne value of mineral sales.
a) Majority Rule – the non-possessory co-tenant must prove an
ouster to get an accounting. This is a very difficult burden to prove.
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d) Statute of Anne – cotenant is entitled to recover proportional
share of rent from third parties renting land, whether or not they were ousted. Can
recover because it is not assumed that the cotenant gave consent to rent property.
- Can’t recover for both ouster and Statute of Anne.
2) Minority Rule (Cohen rule) – some states don’t worry about ouster.
Only thing that has to be proved is that they were a cotenant.
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3. Marriage is not a financial investment that can be divided later. All court can
do is to divide equitably and give alimony when needed.
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