POSSESORY ESTATES What are the two types of estates?

Know difference possessory estate gives the holder the right to immediate possession and future interest does not entitle theowner to present possession, but will or may become a possessory estate in the future. (remainders) (1) Freehold estate (2) leasehold estate (1) Freehold estate The term Freehold derives from the land that was free from control of lords who had originally owned in England. The landowners who received land from the lords eventually came to hold it free from the lords control. Today, a freehold estate means right to land that are not a part of lease. (2) Leasehold estate Its exactly what it sounds like, a lease in land. It is also referred to as a nonfreehold estate. Theres nothing earth-shattering about this concept. Diagram: ESTATES

LEASEHOLD What are the types of freehold estates? (1) Fee Simple (2) Life Estate (3) Fee tail ESTATES

FREEHOLD

LEASEHOLD

FREEHOLD

FEE SIMPLE

LIFE ESTATE FEE TAIL

(1) Fee Simple Characteristics: Absolute ownership Potentially infinite duration No limitations on its inheritability Cannot be divested

This is the longest in duration of these three estates. It is potentially infinite. Ex/ O gives Blackacre to A. This means that A owns Blackacre for as long as A desires, and if A never transfers Blackacre to someone else, Blackacre will pass to As heirs when A dies. Note: O is the Grantor, or Transforor, and A is the Grantee or Transferee (2) Life Estate This lasts for as long as a persons personal life. Someone who holds a life estate might own land for the length of that persons own life, or the length of another persons life. Ex/ O give Blackacre to A for life. This means that A owns Blackacre for the life of A. When A dies, Blackacre goes back to O. A has a life estate. Life estate pur autre view where an estate is measured by a persons life who is not the estate holder, it is a life estate pur autre view.

Ex/ O gives Blackacre to A for the life of B. This means that A owns Blackacre for the life of B. When B dies, regardless of what A may be doing on Blackacre, Blackacre goes back to O. A has a life estate pur autre view (3) Fee Tail This lasts for as long as a persons descendants lives, generation after generation. The magic words representing a fee tail are : heirs of the body,

Ex/ I conveys Blackacre to A and the heirs of the body of A. A holds a fee tail. A cannot sell Blackacre because it must pass to As children, and their children, and their children, until finally there are no more children for it to pass on to, at which point O (or Os descendants) gets it back. What are the types of Fee simple? The fee simple has four further sub categories: Fee simple absolute Fee simple determinable Fee simple subject to condition subsequent Fee simple subject to executory limitation ESTATES

LEASEHOLD

FREEHOLD

FEE SIMPLE

LIFE ESTATE FEE TAIL

ABSOLUTE

DETERMINABLE

S.T. CONDITION SUB.

S.T. EXECUTORY LIMITATION

(1) Fee Simple Absolute The FSA has no qualification or restriction on the estate. A landowner who holds land in FSA may do anything the landowner so desires with the land (including transferring it by sale or by will) If the landowner does not transfer the land by will or otherwise before the landowner dies, the land will pass to the landowners heirs at the landowners death.

Language: To A o ex/ O gives Blackacre To A. A holds a fee simple absolute.

To A and his heirs o ex/ O gives Blackacre To A and his heirs. o the phrase does not mean that As heirs hold any rights in the land before A dies. A could transfer the land to a third party and the heirs would simply be out of luck. To A in fee simple o ex/ O gives Blackacre To A in fee simple.

(2) Fee Simple Determinable Where a fee simple has a duration placed on it that may cut short the fee simple in favor of the grantor, and where that fee simple automatically reverts back to the grantor, the fee simple is determinable. Ex/ O gives Blackacre to A so long as A remains a student, then if A does not remain a student As interest is cut short, and Backacre goes back to O, who granted Blackacre to A in the first place. O has a fee simple determinable. Think of it like this: the grantor, is determined to get the land back even though she gave it to A, the grantee. O makes it so that something happens (or doesnt happen) in the future, the land will automatically go back to her. This is a fee simple determinable. Language: O gives Blackacre to A while A is working for B O gives Blackacre to A during As employment with B O gives Blackacre to A until A stops working for B O gives Blackacre to A so long as A brushes his teeth every morning o If A fails to brush his teeth, Blackacre goes back to O

(3) Fee Simple Subject to Condition Subsequent Where a fee simple has a condition placed on it that may occur in the future, and where the grantor is given the power to re-take the estate (if the grantor so chooses), the fee simple is subject to condition subsequent. Language: Provided that On the condition that If

But if Provided, however

Ex/ O gives Blackacre to A, but if A does not remain a student, then O may re-enter This means that if A does not remain a student, O may choose to retake Blackacre if she so desires; it is not automatic that O will get Blackacre back. O has given A a fee simple subject to condition subsequent. Ex/ O gives Blackacre to A, provided, however that A brushes his teeth every evening. This means that if A fails to brush his teeth, O may reenter and take Blackacre back if O so chooses. NOTE, grantee need not specify tha the grantee may re-enter at her discretion. (4) Fee Simple subject to Executory Limitation Where a fee simple has a condition or duration placed on it that favors a new grantee rather than the grantor) such that the new grantee automatically takes the fee simple on the occurrence of the condition or duration, the fee simple is subject to executory limitation. Ex/ O gives to A, but if A does not remain a student, then to C. This means that if A does not remain a student, Blackacre automatically goes to C. A holds a fee simple subject to executory limitation. Ex/ O gives Blackacre to A as long as A remains a student, then to C. This means that if A does not remain a student, Blackacre automatically goes to C. A holds a fee simple subject to execuatory limitation. So here is the overall diagram:

ESTATES

LEASEHOLD

FREEHOLD

FEE SIMPLE

LIFE ESTATE FEE TAIL

ABSOLUTE

DETERMINABLE

S.T. CONDITION SUB.

S.T. EXECUTORY LIMITATION

So long as As long as While During Until FUTURE INTERESTS

Provided that on condition if but if provided, however

In general, there are two major rules 1. pay careful attention to the exact language used in the grant 2. read and analyze the interests in a grant in sequence Here is the framework: 1. 2. 3. 4. classify the present estate look at who has the future interest; if its the GRANTOR, 3 choices think about how the future interests will become possessory determine whether the interest is vested or contingent; a. apply the following rules to contingent interest i. destructibility of contingent remainders ii. the rule of Shelleys Case iii. the Doctrine of Worthier Title iv. the Rule Against Perpetuities

What are future interests? A nonpossessory interest capable of becoming possessory in the future. A future interest is a present interest, but it is not a presently possessory interest.

What are the categories? Reversion Possibility of reverter Right of reentry Remainder (contingent or vested) Executory interest.

Future interests in the GRANTOR (reversion, POR, ROR): Reversion- future interest left in the grantor after the grantor conveys a vested estate of a lesser quantum than he has. o IF GRANTOR CONVEYS LESSER ESTATE THAN WHAT HE HAS, RETAINS A REVERSION. o Reversions are vested, fully alienable. Possibility of reverter- when a grantor creates a determinable estate. o FROM A DETERMINABLE ESTATE o Freely alienable, vested interest Right of reentry- when grantor creates a FSCS. o FROM ESTATE SUBJECT TO CONDITION SUBSEQUENT o Alienable, in other jurisdictions, inalienable. Inheritable.

Future interests in the GRANTEE: Remainder- future interest in grantee w/ capacity of becoming possessory at the expiration of prior estates, cannot divest prior estates o CABABLE OF BECOMING A PRESENT POSSESSORY ESTATE UPON THE EXPIRATION OF A PRIOR ESTATE CREATED IN THE SAME CONVEYANCE IN WHICH THE REMAINDER IS CREATED. Must have preceding estate from the same instrument Must follow a fee tail , life estate, or terms of years. Must be capable of becoming possessory on natural termination of preceding estate. No reminader after FSA. o Classification of remainders Contingent-remainder that is either created in an unascertained person or subject to a condition precedent Ex/ unborn children to A for life, then to As children. A has no children, contingent b/c not ascertained at time of conveyance. Ex/ hiers- to A for life, then to Bs heirs.

B is alive. Since no one is an heir of the living, takers are not ascertained.

Vested- in an ascertained person and not subject to a condition precedent. Have the right to immediate possession, whenever and however the preceding freehold estates may determine. Sub classifications of vested remainders: Indefeasibly vested- certain to acquire Vested subject to open- a class of persons o Class gifts- either open or closed o Class closing rule- rule of convenience- closes whenever any member can demand possession. Vested subject to complete divestment

Executory interests- must divest or cut short prior estate, or spring out of grantor at a future date. o Shifting executory interest- to A and his heirs, but if B returns from Rome, to B and her heirs. A has a FS subject to executory limitation; B has shifting executory interest. o Springing executory interest- to my daughter A when she marries B. O retains FS and creates an executory interest in A to spring out of O when A marries B.