I. Estates In Land
A. Freehold Estates
i. Fee Simple Estates – an estate that may endure forever.
4 types of fee simple estates:
a. Fee Simple Absolute – words “… and his heirs” creates fee simple absolute (C.L.). Today assumption is that if conveyance is silent as to words of limitation that estate is a fee simple absolute – NY EPTL §2-1.4. Get all rights associated with property (use, possess, fruits and profits, alienate, and destroy). Value the estate at fair market value.
b. Fee Simple Determinable (N.Y. term “Fee on limitation”) – words “so long as”, “until”, or “while” (recognized by some courts). Get all rights associated with property except the right to destroy. There is a condition that if violated the estate reverts back to grantor automatically by operation of law (forfeiture). Before breach there is a possibility of reverter, after breach there is a reversion.
c. Fee Simple Subject to Condition Subsequent (N.Y. term “Fee on Condition”) – “upon condition that” or “provided that”. Get all rights associated with property except the right to destroy. Upon breach of a condition the estate does not automatically revert back to grantor, the grantor must bring an action and court must declare a breach, forfeiture and reversion back to grantor. Before breach there is a possibility of re-entry, after there is a right of re-entry.
d. Fee Simple Absolute Subject to a Covenant – Upon breach of a condition there is no risk of forfeiture – grantor has right to bring lawsuit to either enforce condition or recover damages. Way to get around forfeiture.
– Future Interests:
Reversion – if a condition is violated then there is a forfeiture and ownership of the property reverts back to original grantor.
Remainder – if grant gives ownership to one party and then condition is violated it goes the a third party, the third party’s future interest would be a remainder.
– “Revert” and “only” are forfeiture words. The courts have a strong presumption against forfeiture, especially automatic forfeiture. Unless the parties have clearly stated otherwise, we construe grant in a manner least likely to permit a forfeiture – FSA subject to a covenant.
– NY RPAPL 6.1-2 – Ten year statute of limitation on breach of covenant. Owner cannot retake possession of property more than 10 years after the breach. Applies to both Fee Simple Determinable and Fee Simple Absolute Subject to Condition Subsequent.
– NY RPL § 345 – Changes Fee Simple Determinable and FSASCCS. After 9/1/58 no more automatic reversion unless it was created prior to 9/1/58 and there is a declaration preserving the condition in place on public record filed within three years of 9/1/58, must be renewed every 10 years.
– NY RPAPL § 1953 – no conditions can lead to automatic forfeiture – always based on discretion of the court whether the condition is enforceable, no more FSD.
ii. Life Estate – “for life”. Grantor must clearly indicate that the grantee has an estate, but that that estate will cease upon the grantee’s death. Any words to that effect are sufficient. Life tenant has all property rights except right to destroy. Right to alienate in whole (but only as a life estate) or in part. Right to fruits and profits – but only during Grantee’s lifetime. Construction preference is to create fee simple, so to create a life estate the words of limitation must do so clearly.
iii. Fee Tail Estates – a successive series of life estates within a family, cannot alienate or destroy property. Most states have abolished it – if words are for Fee Tail in these states it would be a Fee Simple Absolute, N.Y. limited Fee Tail through NY EPTL § 6-1.2. Fee Simple subject to a possible remainder in Fee Simple Absolute – only way to have a Fee Tail in N.Y. – “O to D and the heirs of his body then to X” – This would be a Fee Tail limited to a future remainder in Fee Simple Absolute. No right to alienate or destroy.
iv. Words of purchase – who has an interest in the land (who the conveyance is to)
v. Words of limitation – nature of the estate that they hold
– if there are no words of limitation presumption is that the estate is a fee simple absolute
B. Non-Freehold Estates (a.k.a. Tenancies)
i. Estate For Years (a.k.a. fixed term tenancy)
a. Estate that lasts for a fixed period of time
– Creation date
– Expiration date (sometimes implied).
b. Automatic termination date (tenant’s right of possession ends automatically as a matter of law)
c. Created by express written or oral
ncy is terminated by : (1) Landlord being required to give the tenant at least 30 days notice and (2) the notice must be in writing (common law only required proof). No notice requirement for the tenant.
N.Y. Rule (outside of NYC): NY RPL § 232(b) – Notification required for both parties. Tenancy can be terminated by either party by notice at least one month before the expiration of the term
iii. Estate at will (a.k.a. tenancy at will)
a. No fixed term for tenancy (only so long as both the landlord and tenant desire)
b. No guaranty of any period of possession
c. Intention must be clear (i.e. “L to T at will”) – created by writing or express grant
– Very rare
– Minority: when tenant fails to comply with the statute of frauds, it doesn’t matter that tenant later pays rent and it’s accepted, tenancy at will is created (Majority – as soon as tenant pays rent a periodic tenancy is created).
– Common Law: No notice required by either party
– N.Y. RPL § 228 – when terminated by the landlord, thirty days notice is required, no notice requirement for tenant
e. Courts view Estates at will as a personal contract
– No rent owed if tenant dies, contract ends with the tenant’s death.
– If Landlord sells property, tenant does not have any right of possession (must negotiate contract with new owner).
iv. Tenant at sufferance – any tenant who wrongfully holds over (has not vacated at the end of the lease) after the termination of the tenancy (trespasser). Landlord can evict the tenant or elect to hold the tenant to another term.
v. License – a revocable non-exclusive right to possess the space, the owner of the land can freely revoke at will – more like a right of use as opposed to a right of possession. License does not have the right to exclude third parties.