1Possessory Estates: Defeasible Estates what transferor future interest means n/a Transferability common law Transferee (3rd person) Transferabilit y common law Example Present possessory interest Language in grant “to O and his heirs” “and his heirs” words of limitation Transferabilit y common law devisable alienable inheritable devisable alienable inheritable Transferor’ s Future interest none fee simple absolute n/a n/a n/a “to A and his heirs” fee simple determinabl e (s.o.l. starts clocking when condition broken) durational language: while until so long as during in the time that condition subsequent: but if, on the condition that, provided that however condit. lang. + transferee has exec. interest “to A for life” possibility of reverter (language doesn’t have to be explicit) automatic reversion to grantor upon the happening of a certain event (condition broken) (may last foreva if no broken cond.) not alienable devisable inheritable (may be devisable with release only to person with present possessory interest) executory interest not alienable devisable inheritable “to A and his heirs so long as he uses land for farming” “to A so long as she farms, but if not, to David.” fee simple subject to condition subsequent (s.o.l. starts clocking when transferor takes formal action) devisable alienable inheritable right of entry (language doesn’t have to be explicit) if condition is broken, grantor has to actually enter land and bring action for ejectment (may last foreva if no broken condit.) not alienable not devisable inheritable executory interest not alienable devisable inheritable “to A and his heirs provided that he uses the land for farm” f.s.s.t. executory limitation (s.o.l. starts when condition is broken) devisable alienable inheritable not alienable none (interest is held with the transferee) right of entry to transferee executory interest not alienable devisable inheritable devisable inheritable alienable devisable inheritable vested rem. contingent rem. executory intrst “to A and heirs provided that used for farm, but if not… to B” alienable Life estate reversion not devisable estate reverts back to grantor at the end of the *look to other chart “to A for life” 1 *modern law, all the present and future interests are alienable, devisable, and inheritable (except for life estate - same as common law) inheritable present posessory / lang / a d i / transferor / transferor interest / a d i / transferee 3rd party / a d i / example alienable the holder of the fee simple absolute can sell the property devisable the person can name a taker of the property in their will inheritable if the holder of a fee simple absolute fails to name a taker in their will. and inheritable *modern law. inheritable -have either possibility of reverter OR executory interest = not both . must have words of limitation “and his heirs” -Modern law: if we see “to A” assume that it is a fee simple -distinction between fee simple determinable and fee simple subject to condition subsequent are the consequences that follow = future interest -land always has to belong to someone -common law context: future interest is not alienable. devisable. devisable. then the laws of the state will determine who gets the property – based on the laws of intestacy -Common law: if it just says “to A” that is a life estate. conditional language and future interest is held by a third party. not alienable. (no reversion after that). all the present and future interests are alienable. devisable. cant have remainders following fee simple determinable -statute of limitations starts clocking – as soon as the condition is broekn fee simple subject to executory limitation . devisable. so the only way to get the land is with a release release is the process of selling the future possessory interest to another party -modern law context: all future interests are alienable. to David. but if not.” future interest held by a third party when there is an executory interest instead of the transferor. and inheritable) -statute of limitations starts clocking as soon as something formal is done to show that he is aware a condition is broken life estate can be held by third party – vested remainder – a. then the present possessory interest is called a fee simple subject to executory limitation – and then future interest is called executory interest (and its nor alienable. “to A so long as she farms. contingent remainder – not alienable.same as common law) .not inheritable life of A revisions fee simple determinable – transferee has executory interest.-statute of limitations starts clocking – as soon as the condition is broken fee simple subject to condition subsequent – ONLY followed by right of entry. in order for it to be a fee simple absolute. d. in. and inheritable (except for life estate . devisable. O has right to re-enter premises. but not any present or future interest if just part of words of limitation -statute of limitations clock starts to run as soon as the condition is broken Fee simple subject to condition subsequent -fee simple is not automatically terminated. and if alcohol is sold on land. (tacks on A’s time on the land) O’s counter: This grant was given as a fee simple subject to condition subsequent based on the conditional language. a fee simple continues -grantor has right to re-enter and take the premises (with an ejectment action) once the condition is broken -third party (i. B buys restaurant and in year 11 wants to build a bar. Nothing is free. so that was part of the lunch package alcohol was sold. and O sits on his rights too long and doesn’t make any formal move. but not any present or future interest if just part of words of limitation -when a grant is ambiguous. After 10 years. then the land will be given to the party that broke the condition (like adverse possession) -idea of rewarding productivity on land. Money to school for school purposes. grantor then has a fee simple absolute -third party (i.same as common law) .e. A’s restaurant for 11 yrs on land and gives complimentary mimosa on Sun and cooks with brandy. it is the only future interest possible following fee simple determinable -once the condition is broken (no longer defeasible estate) and estate automatically reverts to grantor. just a gift.Fee simple determinable -fee simple given as a gift (i. unless and until the actual entry is made. heirs) can be given expectancy interest. To Z and heirs for faming) does not count as a fee simple determinable. Statute of limitations passed and O did not come onto land and bring action for ejectment. now B can adversely possess land. B’s argument for adverse possession: This grant was given as a fee simple determinable -. all the present and future interests are alienable.e.“so long as” is the durational language. devisable. but may be cut short by the grantor when the stated condition happens. The statute of limitations does not *modern law. -fee simple determinable is created by durational language -possibility of reverter is the future interest married to fee simple determinable. With doctrine of latches.e. give incentive for owners to protect their land and future interests to land hypo: O conveys land to A and her heirs so long as land not sued for sale of alcohol. heirs) can be given expectancy interest. and inheritable (except for life estate . Condition was broken a long time ago bc A used alcohol in cooking and gave alcohol away on Sun. the court will name it a fee simple subject to condition subsequent statute of limitations clock starts to run when grantor takes formal action of right of entry (not when condition is broken) Fee simple subject to executory interest -future interest in a transferee that only takes effect by divesting another interest (3rd party) -transferor and transferee (3rd party) cannot simultaneously have future interests doctrine of latches: if O is aware that a condition has been broken and has right of entry. affirmative waste – holder of the life estate takes actions that end of decreasing the value of the property 2.e. person given land as gift. he just cannot decrease its value. devisable. party doesn’t do anything. B has not been in possession of the land long enough to adversely possess it. permissive waste – owner of the life estate fails to take action and as a result decreases value of the property (passive with prop management) (i. but could have done something to preserve property – liable for decreased value of property) Open minds doctrine: Life estate holder is entitled to use the property as the person before him did he does not necessarily have to improve the value of the property. and inheritable (except for life estate . Life estate Doctrine of waste: 2 kinds of waste 1. modern courts do a straightforward economic analysis (numbers are controlling) to see if the land was improved and made profits (then it is ok) *modern law.same as common law) . As long as the property value is not decreased. all the present and future interests are alienable. roof leaks with water. builds a house there. it does not matter how he uses the land.start clocking until O does something formal to acknowledge that the condition has been broken. In such a case. Life estate Alternative contingent remainder devisable inheritable not alienable reversion (until contingent becomes vested) 1.” Life estate nothing 1. no takers are ascertained 2.Current state Future interest in Transferee Future Interests: Remainder Interests that follow Life Estate Transferability Future interest in Elements of remainder Transferor common law devisable alienable inheritable devisable alienable inheritable nothing 1. then to children of B and their heirs. but if B doesn’t marry C. A 2. then to B and her heirs if B marries C. two potential takers have simultaneous future interests.” “to A for life” Life estate Executory interest devisable inheritable not alienable nothing Life estate Life estate none alienable not divisible not inheritable reversion vested remainder subject to divestment *modern law. then to B and her heirs. only follows a vested interest.” B has no children. Life estate devisable inheritable not alienable reversion (until contingent becomes vested) 1. given to ascertained person. not contingent life estate ends when person dies (if A sells life estate to B. given to ascertained person 2. its still measured by A’s life time span) “to A for life.” B has one child. subject to condition subsequent. but if B doesn’t marry Calvin. interest is contingent upon some event other than life estate ending “to A for life. not subject to condition precedent Example Life estate Vested remainder in fee simple absolute Vested remainder subject to open OR Vested remainder subject to partial divestment Contingent remainder “to A for life. given to ascertained person 2. all the present and future interests are alienable. no condition precedent 3. devisable. no takers are ascertained 3.” “to A for life. to D and his heirs. and inheritable (except for life estate . may be other takers “to A for life. then to B and his heirs. then to children of B and their heirs. to D and his heirs.same as common law) . only one will become vested – both subject to condition precedent 1. B’s executory interest only fulfilled by divesting prior estate 4. then to heirs of B” – “to the heirs” are named as takers – they have contingent remainders Destructibility of contingent remainders (at common law) – if the life estate ends before the contingency is met. C’s future interest of vested remainder subject to partial divestment has been partially divested – he will get smaller share now bc of D. then to B’s children and their heirs. In 2 years. no future interest for the grantor “to A and his heirs” – “and his heirs” are just words of limitation. given to an unascertainable person (not sure of the takers) 2. the possessory interest is fulfilled. B has another child D.future interest – gives legal rights to its owner – it’s a presently existing interest that may become possessory in the future Vested remainder 1. chosen person gets the estate law favors vested interests rather than contingent vested remainder subject to open – if “to A for life. is not subject to a condition precedent. B has child C. don’t confer legal future interest “to A for life. future interest in a transferee that only takes effect by divesting another interest (3rd party) 2. then the contingent remainder becomes a vested remainder (certainty) when life estate is followed by a contingent remainder. as soon as the previous estate ends. Contingent remainder 1. then estate reverts back to grantor and the contingent remainder future interests are destroyed (no longer exist) Executory interest 1. and inheritable (except for life estate . but not a contingent remainder *modern law. given to an ascertainable person 2. made contingent on some event happening other than the natural termination of the previous estates considered “condition precedent” once the contingency is fulfilled. once it becomes vested. all the present and future interests are alienable.” At the time of grant. follows a vested remainder or defeasible interest. the grantor has a reversion future interest bc not sure of any takers. devisable.same as common law) . e. it does not revert back to grantor – is definitely going to be fulfilled by the vested remainder party -expectancy interest confers no legal interest -person must be dead in order to have an heir -unborn children have contingent remainder until they are born – in which case they continue have contingent remainder if there is a condition to be met (i.once the condition is broken and automatically reverts to grantor. but if condition not broken. To Sarah for life. “to A for life” O’s reversion is fulfilled when A dies. O’s reversion is fulfilled. then to B.) Possibility of Reverter . turning 21 years old) Rule against perpetuities – -people who create trusts or legal estates will tie the land for an indeterminate period of time. and inheritable (except for life estate .Reversion . O’s reversion is unfulfilled. (B has executory interest) -if land ceases to be farmed in 300 yrs.grantor’s future interest when he carves out a fee simple determinable. -if it takes more than 90 years for an interest to vest. then title of land is fee simple absolute Right of entry . but if B outlives A. then the interest is invalid (and we cross it out) -came up with the “lives in being + 21 yrs” – based on issue that when person comes up with estate – grantor probably wont figure out past the lives of his kids and grandkids.may or may not be certain that future interest of reversion will become possessory (i.e. devisable. “to A for life then to B and B’s heirs if B outlives A. Grantor can’t reach out to control land years after death – gets 90 years.revert = “come back” . future interest is possibility of reverter (automatic if condition is broken. 90 years) – then its invalid. then executory interest is invalid.” if B does not outlive A.not automatic transfer back to grantor – he must take formal action -can’t have reversion and vested remainder in the same time because if there is a vested remainder. all the present and future interests are alienable.interest remaining in the grantor or successor – who transfers a vested estate of a lesser quantum than that of the vested state which he has . then to B if any person steps foot on Mars. make the future of the land uncertain property law wants certainty so has the rule -if we look at contingent remainder or executory interest and it would take lives in being + 21 years (approx. grantor’s future interest may never become possessory) .same as common law) . (contingent remainder) *modern law. -rule is in place to prevent grantors to attach stuff to assets for more than 90 years To A so long as the land is used for farming – if it is not.grantor’s future interest after he transfers a fee simple subject to condition subsequent and has power to cut short/terminate the estate if the condition is broken. grantor has future right of entry (may not become possessory if the condition is not broken) . o Pros: • Provides low cost housing • Protects tenants’ ability to remain in an apartment • Transfers wealth / political power to tenants à w/o rent control. results in inefficient use of property. stops people from moving every year/end of every lease term. allows tenants personhood in apartments . so it fosters community Cons . and inheritable (except for life estate . while X has a 3 bedroom but only needs a 2 bedroom. devisable. o Cons: • Reduces supply à landlords may leave the market. some tenants cannot find apartments for prices they’re willing to pay (T needs a 3 bedroom.same as common law) .i. reduces likelihood of slums. X won’t give it up due to rent control so T has to get a 2 bedroom) • Inefficient use à people who could pay more pay less and people who need less space take more space • Attracts consumers who wouldn’t otherwise enter the market to a market with less supply • Treats apartments different from every other commodity (regular S/D) • Landlords convert rental units into condos / commercial property • Makes landlords responsible for what the government should be responsible (possible “taking) • Landlords have no incentive to maintain / improve the property *modern law. reduces homelessness. new landlords may not enter the market. you get attached to a place and make it a home.provides affordable housing. attracts more consumers to an already over-saturated/competitive market. puts burden of affordable housing on LLs instead of on govt.while habitable. • Provides greater tenants “personhood” interest in the apartment à sentimental attachment to home means apartment should not be treated like other commodities.reduces supply of housing (landlords may choose to leave market). protects tenants. all the present and future interests are alienable.e. poor tenants are priced out of the system and therefore cannot vote to change the system.contingent remainders and executory remainders are subject to the rule of perpetuities (but vested remainders are not) Rent Control Pros . not necessary up to market standards). and tenants hang on to apartments just because they have them • Creates lost surplus / inefficient (“dead weight loss”) à some landlords cannot charge what the apartment is worth (the lose the difference between the apartment’s FMV and the rent control price). stops poor tenants from being priced out of the system. gives LLs no incentive to maintain or improve their property (pre-war bldgs with shitty old kitchens .