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Estates in Land

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Andrea Martin

on 3 May 2016

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Transcript of Estates in Land

The Fee Simple Absolute.
Estates in Land
The Fee Simple Absolute: is an estate with an infinite or perpetual duration. It is what we think of as complete ownership, lasting until the end of time. The owner can enjoy the property, transfer it (sale, gift, devise it or pass by intestate succession)...it is "alienable".
Present Interest
Future Interest

All "Estates" are a type of "Interest" in land.
(i.e. an estate is a subset of interests)

Example: "O has a present interest or future interest held in an estate known as..."
The Life Estate
Owner owns the property for life.

The life estate is the oldest type of freehold estate. Its duration is measured by someone's life. It is alienable inter vivos by the life tenant, for a term lasting so long as the measured life, but it is neither devisable nor descendable (i.e. cannot pass to heirs by Will, Trust or by law)
The Fee Tail
A freehold estate in which there is a fixed line of succession limited to the "Heirs of the body" of a grantee or devisee, by which the regular, default rules of succession are cut off.
Two Types of Interests:
Estates: classify interests and refer to when and how ownership ends. All estates are interests in land.
NOTE: has been abolished in all but four states (Maine, Massachusetts, Rhode Island and Delaware)
"Alienable"-transferability, assignable, devisable.
There are only Four Present Possessory Estates:
Fee Simple
Fee Tail
Life Estate
Leasehold/Term of Years
The Fee Simple Subject to an Executory Interest
-the same granting language that is used in a Fee Simple Determinable or a Fee Simple subject to a Condition Subsequent but the right upon violation is to a

Example: "O to A, as long as A does not sell alcohol on Whiteacre, then to B and his heirs".
"O to A for Life"
Affirmative or Voluntary Waste-when the life tenant actively causes permanent injury. (destroying buildings or removal of natural resources on the land)

Permissive Waste-occurs when the land is allowed to fall into disrepair, or the tenant fails to take reasonable measures to protect the land from the elements. (failing to pay taxes on the property and allowing it to be sold at a tax sale, failure to keep insurance on the property)

Ameliorating Waste-occurs when the principal use of the land is substantially changed, but the change increases the value of the land.
Actionable when:
1. grantor intended to pass the land with the specific buildings on it to the holder of the remainder and;
2. the building can reasonably used for the purpose it was built.
The Modern Rule: a person transferring property is deemed to transfer his or her entire interest in the property unless the words of grant or other evidence indicates that the grantor intended to transfer a lessor interest.
Traditional language used to create a Fee Simple Absolute is: "To A and his/her heirs or assigns"
Freehold Estates (Fee Simple, Fee Tail, Life Estate)
Non-Freehold Estates (Leasehold Estate/Term of Years)
NOTE: The Fee Simple Determinable, Condition Subsequent and subject to an Executory interest are pretty much obsolete in modern property law.

The Modern trend is to set such Conditions by Covenants and Restrictions.
Sale of the Property by the Court with income to remaining interest holders.
Remaining interest holders can sue for damages.
Restraints on Alienation of the Fee Simple
statutes and court limit the amount one can make limitations or restraints on property.
the general rule is "Reasonable Restraints Doctrine"-the restraint must be reasonable and for a limited time.
Examples of Valid Restraints:
Right of First Refusal
Sale conditioned on approval of a board of directors (cooperative building)
Restraints on Use
Examples of Void Restraints:
Total Restraint
Sale to a member of a club with arbitrary power to deny membership
Racial Restraints (14th Amendment)
Remainder: Is a future interest created in a grantee that is capable of becoming a present possessory estate on the expiration of a prior possessory estate. (A remainder is "successive")
The Future Interest:
Reversion or Remainder
"O to A and his or her heirs"
"To A"- are words of purchase.
(words of purchase-identify the person)

"and his/her heirs"-are words of limitation.
(words of limitation-identify the type of estate)
heirs have no present interest.
The life tenant can transfer this estate to others, with the caveat that, no one being able to transfer more than he/she has to begin with, the third party's rights to continue using the property ends with the original life tenant's life.
Transferability of L.E.:

Life estate "Pur Autre Vie"-the estate is based on the life of a person other than grantee.
"O to A for the life of C"
"O to A and heirs of A's body"
A possesses the land right now, but A cannot sell, give or devise the right to possession after A's death, Instead when A dies, the land passes automatically to A's issue (lineal descendants) Even if A has a Will. If A holds the land in fee tail, A can do nothing that would prevent the land from passing to his or her issue.
Term of Years:
Commonly known as the Lease. The prior three estates are called "freehold" estates"

A term of years is a non-freehold estate.
" O to A for 10 years"
What if the Conveyance has no words of limitation?
"O to A"
Grantee receives the estate the Grantor had (i.e. fee simple or life estate)
What if the Grantor wants to add limitations to the transfer?

Two kinds:

Fee Simple Determinable
Fee Simple Subject to a Condition Subsequent
The difference between the two is subtle, but it can be important.

Fee Simple Determinable: Conveys the entire Fee Simple Estate but it is subject to some contingency the occurrence of which will cause the fee to automatically "Revert" back to the grantor or grantor's heirs upon the happening of the limiting event.
Examples FSD:
O to A and his/her heirs "so long as" or "until"
language that is "durational" in nature
“O to A and her heirs "so long as" rum is not sold on the property.

A has a F.S.D. and O has a possibility of reverter.
i.e. when and if the "demon" rum is sold O's interest comes back and A's fee simple estate automatically ends.

The Key Distinction between the two is what happens if the event occurs. The determinable estate ends automatically, but the estate subject to a condition subsequent just reserves the grantor’s right to end A’s estate.
Actual Possession vs. Physical Possession:
Both determinable and condition subsequent technically require O to take action but sometimes we need to know who has the possessory estate (and therefore the right to possession).
The Future Interest After Term of Years: REVERSION
In other words when the estate ends it “Reverts” back to the grantor.
A Grantor’s Future Interest following a Determinable Estate is:

A Possibility of Reverter:

Since A’ estate will end automatically if the triggering event occurs, we say that O’s possibility of reverter “waits patiently” to see if the event will occur. Like a reversion, O’s possibility of reverter does not interrupt A’s determinable estate. A’s determinable estate ends upon the occurrence of the event set forth in the description of A’s estate. O need do nothing but sit and wait patiently.
Fee Simple Subject to a Condition Subsequent:
Similar to F.S. Determinable, but the occurrence of the event (limitation) does not cause the estate to automatically "Revert" back to the grantor, the Grantor must exercise their "Right to Re-enter."
-requires an affirmative action by grantor.
Example of Fee Subject to a Condition Subsequent:
"O to A on "condition that demon rum not be sold, and if sold, O shall have the power to terminate A's interest."
The Oil and Gas Lease Habendum Clause and the Determinable Fee.
after the primary term, the secondary terms of Leases have often used terms like: "so long as production continues from the site"
Reversion: "O to A for life"
O has a reversionary interest, when A dies the interest "reverts" back to O or O's heirs if O is deceased.

Remainder: O "to A for life, then to B."
B has the remainder after A dies.
States that abolished the Fee Tail: attempts to convey a Fee Tail will be considered a Fee Simple Absolute
Full transcript