PROPERTY II
* Use headings if you need too for ORGANIZATION
* demonstrate you know the aw
* identify the relevant issues
* discuss arguments for both sides.
* Include policy to support the case
* CONCLUSION
Divided Ownership:
· Doctrine of Waste
· Restraints on Transfer of Property
· Rule against perpetuities
· Savings clause to minimize harm violating RAP
· Shared ownership: Concurrent estates
· Husband/Wife
· Shared ownership: other relationships
· Landlord tenant: new and old
Transfer of ownership
· Deeds
· Warranties in deeds
· Transfer during own lifetime
· Transfer of death- Intestate Law
· Recording Transfers
Land Use
· Easements
· Equitable Servitude
· Real Covenants
· Zoning
I. Divided Ownership
A. Waste
i. UP: Waste is property law principle that restrains a present estate owner from acting in a manner that unreasonably injures the land, and thus reduces the value of future interests, in the property.
ii. Text: The life tenant shall pass to the reversion or remainder the estate as nearly as practicable, unimpaired in its nature, character, and improvements.
iii. Two Very Different Definitions of Waste:
· Waste = unreasonable use by life tenant
· Waste = leave the Estate the way you found it
iv. Waste is the principal common law mechanism for resolving land use disputes where property rights are divided between persons holding present estates and future estates in the same land.
· Absent a superseding agreement, the waste doctrine restrains the present estate owner from acting in a manner that unreasonably injures the affected land and thus reduces the value of the future interest.
v. In general, absent a superseding agreement, the waste doctrine restrains the present estate owner from acting in a manner that unreasonably injures the affected land and thus reduces the value of the future interest. A person who holds an estate subject to a future interest may not commitwaste.
vi. There are two types:
· Affirmative Waste
o Occurs when the voluntary acts of the present estate owner significantly reduce the value of the property (e.g., destroying a valuable house).
o type of misfeasance that occurs when the life tenant takes some affirmative action on the property that is unreasonable and causes “excess” damage to the reversionary or remainder interest
§ Open Minds Doctrine: provided that any extraction of minerals was waste unless mining was already occurring on the land at the beginning of the life estate
· Permissive Waste
o Stems from inaction: the failure of the estate owner to exercise reasonable care to protect the estate (e.g., failing to fix a leaky roof).
o type of nonfeasance that occurs when the life tenant fails to take some action with regard to the property and the failure to act is unreasonable and causes excess damage to the reversionary or remainder interest. (failing to repair a roof resulting in water damage, non payment of taxes, etc.)
· Ameliorative Waste
o Not Waste At All
o Often Justified By Change of Circumstances
o Changes Proposed By Life-Tenant Will Actually Improve The Property’s Ultimate Value
o I changed it, but I changed it for the better. Controversial category. (BROKAW)
vii. Remedies:
· Action at law for damages
· Action at equity for injunctive relief (probably before the waste takes place but possibly even after the waste—to restore the property) (famous old case of Vane v. Lord Barnard)
· Sale of property (Baker v. Weedon)
· Gloucester Statute (SC uses it; Pg. 603) Forfeiture of Estate Plus Treble Damages to future interests.
viii. Brokaw v. Fairchild
· Brokaw Is A Case Of Ameliorative Waste: when life tenant takes some affirmative action on the property that is unreasonable and causes “excess” damage to the reversionary or remainder interest.
· Holder of life estate tends to favor current consumption and investments that produce a quick return, and holders of remainders are likely to prefer conservation of the asset and longer-term investments.
· P had a life estate and wanted to tear down the old mansion and rebuild more profitable apartments. P’s argument was that under the facts and changed conditions of the neighborhood shown, the demolition of the building and erection of the proposed apartment is for the best interests of himself as a life tenant, and inheritance.
· Ds had a contingent remainder in the estate, and their argument was that the proposed demolition of the residence would be waste.
· ISSAC BROKAW’S WILL:
o Life Estate To My Son, George, Followed By a Contingent Remainder to His Issue Then Living, but if George dies without living issue, then other heirs receive the home.
· State The Title
o George: Life Estate
o George’s Daughter: Contingent Remainder but if she does not outlive George, then
o Issac’s Other Heirs: Alternative Contingent Remainder
o Issac: Reversion
· The law intends that the life tenant shall enjoy his estate in such a reasonable manner that the land shall pass to the reversioner or remainderman as nearly as practicable unimpaired in its nature, character, and improvements.
· any act of the life tenant which does permanent injury to the inheritance is waste. Law intends that the life tenant shall enjoy his estate in such reasonable manner that the land shall pass to the reversioner or remainderman as nearly as practicable unimpaired in its nature, character, and improvements.
· The tenant has no right to exercise ownership, but may do whatever is required for the general use and enjoyment of his estate as he received it, but to demolish and erect a different building is exercising dominion and ownership which is unlawful
· Financially, the Objecting Adults May be Unwise In Not Consenting To the Proposed Change
· They May Be Selfish, But This Court Is Not Concerned With Their Motives And / Or Purposes
· Valuation of Interests
o (1+r) = (1+m)(1+i)
§ r = real interest rate
§ m = market interest rate
§ i = expected inflation rate
ix. UP 14: FUTURE INTERESTS HELD BY TRUSTEES
§ 14.02 Classifying Future Interests Held by the Transferee [167-168]
The common law recognized only two broad categories of future interests that could be held by a transferee:
1. the remainder and
2. the executory interest.
There are four types of remainders and two types of executory interests.
§ 14.03 Remainders [168-175]
[A] Definition
· A remainder is a future interest created in a transferee that is capable of becoming possessory upon the natural termination of a prior estate created by the same instrument.
For example:
if A conveys “to B for life, and then to C,” C’s interest is capable of becoming possessory when the prior estate (B’s life estate) naturally terminates; C holds a remainder.
[B] Types of Remainders
[1] Vested Remainders
The three types of vested remainders are:
1. the indefeasibly vested remainder;
2. the vested remainder subject to divestment; and
3. the vested remainder subject to open.
All
rself, and her heirs, and all her successors, that Pinkacre will never be conveyed to anyone for any purpose.
o Leases and life estates are treated very differently than fee simple b/c leases are for
o temporary set time.
o Leases usually do say “no subletting, no assign”
· One more example: the ownership of this property is limited to only members of the Caucasian race for the next 50 years
o What type of restrain is this?: unconstitutional and is a partial restraint.
v. Vestigial Maintenance Doctrines
· The Merger Rule
o Example:
§ O conveys to A for life creating implied reversion for O
§ O then coveys his reversion to A so now A has both life estate and reversion
§ Courts view not as 2 separate interests but combines them into one:
§ a fee simple absolute
o This rule promotes free alienation of property and it still followed today
o (only 1 still around in most states today): to get around tax…O to A for life and reversion to A. A treated as having a fee simple absolute. (series of interests add up to fee simple, then they merge).
· The Rule in Shelley’s Case
o Under this rule, if a deed or will have:
§ (1) created a life estate or fee tail in real property in one person;
§ (2) also created a remainder in fee simple in that person’s heirs; and
§ (3) the estate and remainder were both legal and both equitable, then the future interest belonged to that person, not the person’s “heirs.”
o This rule has been abolished in all but two states.
o makes land more alienable. O to A for life and remainder in the heirs of A’s body (and both are equitable or both are legal).
· Doctrine of Worthier Title
o Traditionally, if an owner transferred real property to one party, and by the same instrument transferred the following remainder or executory interest to the owner’s heirs, then, under this doctrine, the owner received a reversion and the “heirs” received nothing.
o Today the doctrine is virtually obsolete in the United States.
o grantor attempts to create a remainder or executory interest in his own heirs. O to A for life, then to the heirs of O. The Doctrine of Worthier Title would block it and convert what was a reminder in the heirs of O into a reversion in the grantor. Would’ve hurt alienability b/c no one could negotiate w/ O while he was alive w/o kids.
· Destructibility of Contingent Remainders
o At common law, a legal contingent remainder in real property was extinguished if it failed to vest when the preceding freehold estate ended.
o traditionally, if a (legal, not equitable) contingent remainder failed to take immediately on the termination of all preceding estates, it would be destroyed.
o Today almost all states have abandoned this doctrine.
“O to A for life, then to B if B passes the bar,” and A died before B passed the bar, the contingent remainder would be destroyed and O would take b/c reversion. Courts today treat
