Future Interest---------Present Interest

Fee Simple Absolute
"To A"
->Is unlimited in duration. Ownership of land is ownership forever.
->Is is freely alienable (freely transferable), freely defeasible (can transfer by will), freely descendable (it will pass to the heirs)
->Absolute ownership of the land.
Ex.: when you buy a house, you typically purchase the house in fee simple absolute.

The Tenancies

Life Estate
“To A for life”or “to A for the life of B”
-> Is an interest that has a duration measured by a human life.
->Life Estate can be sold. However, the life estate would be continued to be measured by A’s life. By its nature, the life estate that C has bought from A will end when A dies.
*Renunciation: A life tenant who receives the estate may renounce it, perhaps because owning it may be to burdensome. If this occurs, the courts generally accelerate the future interest that follows the life estate, allowing to become possessory immediately.

Life Estate Pur Autre Vie (Life of Another)
Life estate measure by the life of someone other than the life tenant.
Ex.: "To A for the life of B".

Periodic Tenancy (fixed period and automatically continues for successive periods of time): Ex.: “to A form year to year.”

At will (sets no fixed period): Ex.: “to A so long we mutually agree to continue the tenancy.”

Term of years (establishes the duration of the tenancy): Ex.: “to A for one year”

Defeasible interests
Interests that will terminate on the happening of an uncertain event.
Ex.: “to the school board, so long as the land is used for school purposes.” The happening of this event—the land no linger being used for school purposes—is uncertain. The school’s board interest is one that will terminate on the happening of an uncertain event, thus the interest is defeasible.






Fee Simple

Fee simple subject to condition subsequent:

  1. Creation: Created when the grantor retains the power to terminate the estate of the grantee upon the happening of a specified event. Upon the happening of the event stated in the conveyance, the estate of the grantee continues until the grantor exercises her power of termination (right of entry) by bringing suit or making reentry **
    2.Language: “but if”, “on the condition that”, or “provided that”.
  2. Requisites: clear durational language + clear statement of the grantor's right of entry**
    Ex.: “to the School board, but if the property is not used for school purposes, then the grantor may re-enter and retake property.” Here, the school owns BlackAcre in fee simple subject to condition subsequent. O retains a right of revert in fee simple absolute.

Fee simple subject to executory limitation:

  1. Is an estate that, upon the happening of a state event, is automatically divested in favor of a third person rather than the grantor.
    Ex.: “To the school board so long as it is used for school purposes, then to the State College”. Here, the state college has an executory interest in fee simple absolute.

Fee simple determinable:

  1. Is an estate that automatically terminates on the happening of a stated event and goes back to the grantor
  2. Language: created if the conditional language is phrased in term of duration, such as “so long as”, “until”, "unless".
    ->Is is freely alienable (freely transferable), freely defeasible (can transfer by will), freely descendable (it will pass to the heirs) BUT always subject to the conditions.
    Ex.: “To A so long as popcorn is never made in the premises.”

Future Interest:

Reversion

Future Interest:

Owner's Future Interest:

Future Interest:

Future Interest:

Remainder

Future Interest:

Reversion

Remainder

Future Interest:

Remainder

Reversion

Possibility of Reverter
Because the grantee's estate may end upon the happening of the state event, there is a possibility that the land may revert back to the grantor.
It is a future interest because it because possessory only upon the occurrence of the stated event.
*If a comparable interest is created in a third party, it is an executory interest.

Right of entry
Is the future interest retained by the transferor who conveys an estate on condition subsequent. It is necessary to expressly reserve the right of entry in the grantor
The right of entry descends to the owner's heirs.
*If a comparable interest is created in a third party, it is an executory interest.

Executory Interest

Reversion

NO Future Interest
Not accompanied by a future interest because is of unlimited duration.

Future Interest
A future interest is an estate that does not entitle the owner to possession immediately, but will or may give the owner possession in the future. A future interest is a present, legally protected right in property.

Future Interests created in grantee

Future Interests created in the grantor

Right of Entry

Reversion

1. Remainders
Future interest created in a grantee that will become possessory, if at all, on the natural end of the preceding interest. Ex.: “to A for life, then to B”. B has a remainder.
->It must be expressly created : in the instrument creating the intermediate possessory interest.
-> Almost always follow life estates.
-> Cannot cut short or divest a preceding estate prior to its normal expiration.

2. Executory Interests
Future interest created in a grantee that will cut short or divest the preceding interest.
“Remainder man”-> have to patiently wait
->The rule of Shelley's case does not apply to executory interests.

I. Contingent
If it is either in an unascertained person or subject to a condition precedent other than the natural end of the preceding estate. Ex.: “to A for life, then to A’s first child. A does not have children. Here, it is contingent because it is unascertained person—A has no children so there is no living person who can be identified as A’s child. Ex.: “to A for life, then to B if B reaches the age of 21.”Here, contingent because there is a condition precedent….

II. Vested
If it is both in an ascertained person (when possible to point to a living person who holds the interest) and not subject to a condition precedent other than the natural end of the preceding estate. Ex.: “to A for life, then to B”. B’s remainder is in an ascertained person, B, and is not subject to a condition precedent.

A. Indefeasibly Vested
When it is certain to become possessory in the future. Ex.: “to A for life, then to B”
->There are “no strings attached.”

B. Vested Subject to Open
When it is held by an open class of people. Ex.: “to A for life, then to my [O’s] children”. Open class because the class of O’s children still open. There is a presumption that any living person can have children.

C. Vested Subject to Divestment
May be divested by an executory interest before it becomes possessory. Ex.: “to A for life, then to B, but if B ever becomes a lawyer, then to C”. Here, B’s remainder is vested, but may be divested by C’s executory interest if B violates the condition and becomes a lawyer.

Reversion
->Portion of the grantor's interest that the grantor retains after transferring an interest that is of limited or potentially limited duration.
-> Any time a grantor fails to tranfer all of her interest with certainty, the grantor will have a reversion. If the grantor gives away all of her interest with certainty, then there will be no reversion.
->It is transferable, devisable by will, and descendible by inheritance.
->The holder of a reversion may sue a possessory owner for waste and may recover against third-party wrongdoers for damages to the property.
-> All reversionary interests are vested because both the owner and the event upon which it will become possessory are certain.
-> Because is vested, it is not subject to the Rule Against Perpetuities.

The possibility of reverter

Right of entry
Is the future interest retained by the transferor who conveys an estate on condition subsequent. It is necessary to expressly reserve the right of entry in the grantor
->The right of entry descends to the owner's heirs.
->If a comparable interest is created in a third party, it is an executory interest.
->Is devisable (most states), is descendible (all states), it is not alienable intervivos.

Fee tail:

  1. Creation: "To A and the hers of his body."
    This conveyance limited inheritance to lineal descendants of the grantee. If no lineal descendants survived at the grantee's death, the property either reverted to the grantor or her successors or passed to a designated remainderman.
    *Today, most US jurisdictions abolished the fail and have enacted statutes under which any attempt to create a fee tail results in the creation of a fee simple.

Estates in land are possessory interests in land.
These interests may be:
->Presently possessory (present estates), or
->They may become possessory in the future (future interests)
They also may be:
->Freeholds which give possession under some legal title or right to hold. Ex.: life estates
->Nonfreeholds which give mere possession. Ex.: leases
Additionally they may be:
->Potentially infinite duration, as in the case of fee simple.
->Limited duration, as in the case of an estate for years.
*Doctrine of merger: Whenever the same person acquires all of the existing interests in land, present and future, a merger occurs. That person then holds a fee simple absolute.
*Rule in Shelley's case: When the freehold estate (usually a life estate) is given to A, and in the same instrument a remainder was limited to the "heirs" or "heirs of the body", the purported remainder in the heirs is not recognized, and A takes both the freehold estate and the remainder. The rule converts what would otherwise have been a contingent remainder in the heirs into a remainder in the ancestor.(It is abolished in almost all states). Ex.: "To A for life, and then to the heirs of A". By virtue of the rule, A has a life estate, and a vested remainder in fee simple. (Here, the law of merger causes A's life estate to merge with his remainder so that A gets a present estate in fee simple)

For life of Grantee:
"To A for life"

Remainder

Future Interest:

Remainder

Reversion

Possibility of Reverter
Because the grantee's estate may end upon the happening of the state event, there is a possibility that the land may revert back to the grantor.
->It is a future interest because it becomes possessory only upon the occurrence of the stated event.
->f a comparable interest is created in a third party, it is an executory interest.