Michigan Bar Exam Outline

BAR EXAM OUTLINE

REAL PROPERTY OUTLINE

PRESENT ESTATES

• Freehold estates – gives possession under some legal title or right to hold

  • Fee simple absolute – “To A”

    • Absolute ownership of potentially infinite duration

    • Freely devisable, descendible, and fully alienable

      • Any direct restraint on alienation is void (except right of first refusal)

      • Conditions on use are permissible

  • Fee tail – “To A and the heirs of his body”

    • Passes directly to grantee’s lineal blood descendants

    • MI – abolished and treated as a fee simple

  • Fee simple defeasible – fee simple + condition (not words of desire, hope, or intention)

    • Types:

      • Fee simple determinable – automatically ends when a certain condition occurs, giving the right of possession back to the transferor

        • “As long as,” “while,” “until,” “during”

        • Transferor has “possibility of reverter” (30 year limit)

          • MI – freely transferable

      • Fee simple subject to a condition subsequent – may be terminated by the transferor when a certain condition occurs (default over FSD)

        • “Provided however,” “but if,” “on the condition”

        • Transferor has “right of entry” if expressly reserved (30 year limit)

          • Must declare forfeiture within a reasonable period of time after the condition occurs

          • Cannot be transferred inter vivos

            • MI – freely transferable

      • Fee simple subject to an executory limitation – followed by a future interest in another transferee

        • The future interest has an “executory interest”

        • Estate automatically ends upon the occurrence of the condition

  • Life estate – “O to the life of A”

    • Measured by the lifetime of a particular person (or pur autre vie if another)

    • Freely devisable, descendible, and fully alienable

      • Restrictions on transfer are permissible

    • Future interest:

      • Grantor has “reversion”

      • Grantee has a “remainder”

    • Doctrine of waste – life tenant must not commit waste (merely maintain)

      • Voluntary waste – any affirmative act that reduces the value of the property

        • Exceptions: (PURGE)

          • Prior use – if prior use was to deplete natural resources, may continue as to already open sources

          • Reasonable repairs – may consume natural resources for reasonable repairs and maintenance

          • Grant – may exploit if grantor grants right to do so

          • Exploitation – if only suitable for exploitation

      • Permissive waste – failure to take reasonable care to maintain

        • Duties:

          • Reasonable repairs (excluding ordinary wear and tear), not replacement

          • Pay all taxes on the property

          • Pay all interest on any mortgage (holder of future interest pays principal)

          • Life tenant does not have to insure the property

      • Ameliorative waste – affirmative act that leads to a substantial increase in value

        • Exceptions:

          • Life tenant is permitted to enhance property if all holders of future interest are known and consent

          • If changed conditions have made the property relatively worthless, the life tenant can tear it down

FUTURE INTERESTS

• Remainders – a future interest in a transferee

  • Elements:

    • Capable of becoming possessory immediately upon expiration of the prior estate

    • Does not divest (cut short) any interest in a prior transferee (follows life estates)

  • Types:

    • Indefeasibly vested remainder

      • It is created in an ascertainable person

      • No condition to taking

    • Vested remainder subject to open (partial divestment)

      • Remainder is a group or class that may be enlarged in the future

        • Members who predecease the transferor are eliminated (lapse)

        • The class is closed when the testator dies and the class is entitled to distribution

      • At least one person must be vested

        • Ascertained or alive and identifiable; and,

        • No condition precedent that must be satisfied before they take

    • Vested remainder subject to complete divestment (executory interest)

      • Remainder is subject to being cut short due to a condition subsequent

    • Contingent remainder – a remainder is contingent if:

      • Grantee is not an ascertainable person; or

      • A condition must be met before the remainder can become possessory

• Executory interests – a future interest in a transferee that divests (cut short) another estate

  • Shifting – executory estate from one grantee to another grantee

  • Springing – executory estate from the grantor to a grantee

• Rule against perpetuities – if there is any chance that an interest might vest (become possessory) outside of the life-in-being + 21 years, that interest is void

  • Applies to: contingent remainders, executory interests, vested remainder subject to open

  • Test:

    • Identify the future interest

    • Identify the condition precedent

    • Find the measuring life

    • With absolute certainty, the interest not vest after the life-in-being + 21 years

      • If yes, future interest is good

      • If no, RAP kills the future interest

  • Wait and see approach – whether the interest will actually vest with time period of RAP

    • MBE – does not apply

    • MI – applies within 90 years

  • Perpetuity saving clause – ensures vesting will occur within the time period of the RAP

  • Special circumstances:

    • First refusal – reasonable options and rights of first refusal do not violate RAP

    • Charities – gifts from one charity to another charity do not violate RAP

    • Fertile octogenarians – anyone regardless of age is capable of having children

    • Bad as to one, bad as to all – if one member of the class is voided, all are void

FORMS OF CONCURRENT OWNERSHIPS

• Joint tenancies:

  • Elements:

    • Right of survivorship – the surviving JT takes automatically upon death of a JT

      • Must be expressly stated

    • Right to partition – lines are drawn and the party is no longer a JT by:

      • Agreement of the parties; or

      • Courts can draw the line or sell if lines can’t be drawn

  • Created by 4 unities: (TTIP)

    • Time – all interests must have vested at the same time

    • Title – the grant to all JTs must be by the same instrument

    • Interest – all JTs must take the same kind and same amount of interest

    • Possession – all must have equal rights of possession

  • Destruction:

    • Partition – voluntary...

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