PROPERTY
PROF. SIRICO – FIRST SEMESTER 1998
FREEHOLD ESTATES
Present Interest
Future Interest
Freehold Interests
Examples
In grantor
In third person
Fee Simple Absolute
O → A
1)O to A
2)O to A and his heirs
None
None
Fee Tail
O → A→ A1 → A2 → O
1)O to A and his bodily
heirs
2) O to A and the heirs
of his body
Possibility of reverter
(Reversion is a fee simple absolute)
Vested Remainder
Contingent Remainder
Executory Interest
Defeasible Estates *
Fee Simple Determinable
(time words)
O → A as long as . . .then → O and his heirs
O to A (and his heirs) so long as liquor is not sold on property then to O and his heirs
Magic Words: so long as, during, while
Possibility of reverter – as soon as condition is broke, the property returns to grantor in fee simple absolute
Executory Interest
Fee Simple Subject to a Condition Subsequent
(condition words)
O → A provided that . . . then → O and his heirs
O to A (and his heirs) on condition that liquor is not sold on the property then to O and his heirs
Magic Words: on condition that, provided that
Power of termination (right of entry, right of reacquisition). When grantor exercises right of termination he gets land in fee simple absolute.
Executory Interest
Life Estates
O → A for life
O to A for life
Reversion – at end of A’s life, goes back to O
Vested Remainder
O → A for life → B
Contingent Remainder
O → A for life → B if B survives A
Executory Interest
O → A for life → then in 10 years to B
* The difference between Fee Simple Determinable and Fee Simple Subject to Condition Subsequent is the magic words, however, courts favor non-forfeiture and are likely to favor Fee Simple Subject to a Condition Subsequent in cases of ambiguity.
I) NON – DEFEASIBLE ESTATES
A. Fee Simple Absolute
1) Definition – The greatest degree of ownership available on an estate; have all interest in the property – present and future.
2) Example – O to A; O to A and his heirs
B. Fee Tail
1) Definition – Designed to keep property in family indefinitely, not able to be sold.
2) Example – O to A and the heirs of his body: O to A and his bodily heirs
*these are magic words necessary to create a fee tail
3) History – Statute de Donis. Recognized the fee tail, in 1285. Successive life estates continued indefinitely until the line of decent died out. The king disliked this statute because it prevented him from taxing land upon transfers. Also, any grantee in present possession of a life estate could not
to notify grantor that condition was broken.
3) Economic Considerations – Who gets money that is generated from land when condition is broken?
a) Fee simple determinable – proceeds go automatically to the grantor
b) Fee simple subject to a condition subsequent – proceeds go to grantor ONLY after exercising the power of termination.
4) Hagaman v. Board of Education – example of court application
Court ruled that it was a covenant and the Board of Education retained the property. The Court will strictly interpret the words used in deeds. When a conveyance contains only a clause of condition or of covenant, such clause does not usually indicate intent to create a fee simple determinable (Restatement of Property). The Hagamans did not use the proper magic words and did not create a fee simple subject to a condition subsequent. If the magic words are not included the courts tend to construe a covenant or a trust. Reaffirms the court’s tendency to eliminate the “dead hand of the past” and will rule in order to prevent forfeiture.
