This is an extract of our Forms Of Ownership document, which we sell as part of our Long Merril & Smith Property Outline collection written by the top tier of University Of Virginia School Of Law students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Long Merril & Smith Property Outline. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Forms of Ownership Estates in Land and Divisions of Ownership Over Time The Common Law Estates The common law estates concern interests in common law that divide ownership in Real Estate overtime. Not as common now because a trust is more efficient
Interest: any legal right associated with specific property. All estates are interests in land. Other interests that are not estates include easements, restrictive convenants, liens, mortgages, etc. Estate: a type of property right that measures a person's interest in the land in terms of duration. An interest may be either a present possessory estate or one that does not take possession until the happening of some future event-a future interest.
Present Possesory Estates Present Interest
When Does it End
Future Interest Retained
Fee Simple Absolute
Indefinite in Time
O grants Blackare "to Marge and her heirs" or "to Marge in fee simple" or "to Marge"
None None None
Upon the death of a named person
O grantsB to M for life, then to N B to M for life, then to her adult children B to M for life, then to N if C occurs
B to M for life, then to C, but if C occurs to K B to M for life, then to her children [N was the only child at the grant]
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Remainder, indefeasibly vested Contingent Remainder Contingent Remainder Remainder (in N); vested subject to complete divestment Remainder (in N); vested
subject to partial divestment Fee Simple Determinabl e
Fee Simple Subject to Condition Subsequent
Fee Simple Subject to Executory Limitation
Automatica lly upon the occurrence of a named event Indefinitely, but upon the happening of a named event, but can be ended by action (selfhelp or lawsuit) by the grantor or the grantor's successor Indefinite, but upon a named event, can be given to 3rd party
O grants B to M as long as C occurs, (then to O)
Possibility of Reverter (in O).
O grants B to M, but if C occurs, then O has the right to reenter and take the premises
Right of entry/power of termination (in O)
O grants B to M as long as C occurs, then to N O grants B to M< but if C occurs, then to N
Executory interest (in N)
O conveys B to M, but if C occurs, then N has the right to reenter
Future Interests Retained by Grantors Future Interests Retained by Grantors Follows the natural end of O Grants B "to Marge for a life estate, and in other life, then to O" contexts in which the O Grants B "to Marge for owner has not disposed life" of the entire fee Possibility of Reverter Interest reserved to the O grants B "to C, as long grantor that follows a fee as it used for X, then to simple determinable, O O" will automatically get the OR property back if the O grants B "to C, as long limitation built into the as it is used for X" fee simple occurs Right of Entry (Power of Interest retained by the O grants B "to C, but if it Reversion
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grantor that follows a fee simple subject to condition subsequent
is not used for X, then O has the right to reenter and take the premises"
**Subject to the Doctrine of Laches: right of entry must be exercised within a reasonable time, which is probably subject a statute of limitations in bringing an action in ejectment
Future Interests Created in Grantees Future Interests Created in Grantees Remainder follows a life estate Indefeasibly vested The identity of the takers M grants B "to Homer for if known, no other life, then to B, L, and M" contingency has to be fulfilled before the interest is ready to become possessory, no condition subsequent can cut short the remainder Contingent Some uncertainty remains as to the identity of the class of takers or the occurrence of the condition. When the uncertainty is resolved, the remainders are said to vest in interest Vested subject to Occurrence of a condition M grants Blackacre "To complete divestment can cause the interest to Homer for life, then to B; shift to someone else but if B fails to graduate high school by age 19, then to L" Vested subject to partial Vested because no M grants Blackacre "to divestment uncertainty as to their Homer for life, then to his status as children of children and their heirs Homor and no condition (Lisa has been born at the precedent on their time but not Maggie remainders. But subject to partial divestment because if more children are born, the interest would diminish. Executory Interest Interest in a transferee M grants Blackacre "to B, that divests or cuts short but if alcohol is ever Remainder
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a previous interest.
consumed on the premises, then to N"
Vesting Vests in Possession Vest in Interest A Reversionary Interest Executory Interest
When the interest becomes a present possessory one (when the preceeding interests have terminated) Various types of uncertainty about the interest has been resolved Vested in interest upon creation Normally must become possessory in order to vest in interest
Conflict Among Holders of Sequential Estates Waste The action for waste can be invoked not only by holders of remainders following life estates, it applies in any situation of concurrent or sequential ownership, including landlords objecting to actions by tenants that the landlord claims will damage the landlord's reversion
Three Categories of Waste: Affirmative Waste
Occurs when life tenant undertakes some affirmative act on the property that is unreasonable and causes "excess" damage to the revisionary or remainder interest Occurs when life tenant fails to take some action w/r/t/ the property and the failure to act is unreasonable and causes excess damage to the reversion or the remainder Affirmative act b life tenant that significantly changes the property, but that increases its market value
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Affirmative waste is defined in terms of what is regarded as "normal" use of the property.
Permissive waste is defined by what constitutes "normal" behaviorTraditional view is that ameliorative waste is just another type of affirmative waste and is not permitted [Brokaw]
Leading view is that ameliorative waste is permitted when it can be justified by changed circumstances (Melms v. Pabst Brewing) FORK
Browcaw v. Fairchild: Brokaw built several adjacent mansions on prime real estate in New York City and gave his children each a life estate. Each life estate was followed by a remainder to the issue of the life tenant. The will provided that if any of the life tenant should die without issue, the remaining heirs of Issac would get that house. Here, the plaintiff (George) had a life estate, followed by a contingent remainder in George's children, subject in turn to a contingent remainder in the three other children of Brokaw. o
D wanted to change the mansion to apartments. The contingent remainder argued what he is trying to do is contrary to his obligations as a life tenant. What is potentially key here is that the will left "my residence", seems like he wants to preserve the actual house [what happens if he does not want it?] [what about if you are granted open land and you want to build a factory on it?]
? If he wants to preserve the house, this is definitely ameliorative waste because he is significantly changing the property (the residence) by destroying it, even though it would increase its value.
? Court holds that ameliorative waste is just another type of waste and is therefore not permitted. [FORK: More popular view says that if the circumstances substantially change, ameliorative waste is permitted [Pabst Brewing]]
? What if it just granted "my property", or "my house"?
Seems like court said if it was just granting "the corner plot of ground with improvements thereon", then such would not necessarily constitute waste. FORK: what about someone with only the possibility of reverter or an executory interest with a highly remote chance of ever becoming vested seeks to bring an action for waste?
Other Antecdotes from the case:
? It is no justification for an act of waste that a party will, at some point in the future, put the premises in the same condition as they were when the lease was made. Question is solely, whether the tenant at the time of the wrongful act done, caused an injury which then affected the plaintiff's to his reversion.
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Separating Management and Nonpossessory Interests in Property Trusts Generally Persona #1 THE SETTLOR
"the trust res" - all assets in (Composed of LEGAL and EQUITABLE rights to the property)
Persona #2??"The Trustee" Holds LEGAL (Possessory) title to all the property in the trust, usually in fee simple Charged with the PROTECTION and MANAGEMENT of the trust Trustee can use property anyway an owner of a fee simple could: o Sell o Use proceeds to buy different property o Rent the property o Use property as collateral for loan Property can't be touched by trustee's creditors Trustees are usually corporations, banks/financial institutions
Persona #3 "The Beneficiary" Holds EQUITABLE title to all of the property in the trust
? Receives the benefits of the trust?Beneficiaries are designated by the terms of the "common law estates of land", although the law behind CLEIL do not apply to trusts, its just naming Usually carved up among several beneficiaries spread over multiple generations
Power of appointment: when a donor of property by will or trust creates or reserves a power in some other person to designate the recipient(s) of particular property or beneficial interest in property.
Examples: In the case of a 401K, the settlor is the individual seeking to save for retirement, and usually also the primary beneficiary.
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