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PROPERTY I OUTLINE Analytical Tools and Key Concepts a. Theories of Property i. Labor Theory (Locke) 1. You own your own work, so if you mix your work with something, you own the thing a. E.g., horse manure is abandoned property of the horse’s owners. If you rake the manure into a pile, you’ve put work into it, making the manure yours. b. Acquisition by Discovery: Native Americans didn’t own the land they occupied b/c they did not put enough (or the right kind of) labor into the land 2. Law of Accession: when two ownerships are mingled together, whoever made the most material contribution gets the property (with the other getting restitution for their labor contributed) (e.g., B painting on A’s canvas to create a valuable artwork) ii. Utilitarianism 1. Property exists in order to maximize the overall happiness or “utility” of all citizens. (greatest good for greatest number) a. What property allocation promotes overall societal happiness? i. Distribution ii. Asset maximization (see Economics of Property below) iii. Conservation? iii. Political Rights and Autonomy 1. Property allows for sphere of autonomy (e.g., allows you to howl at the moon in your own backyard) 2. Allows for political freedom (e.g., wealth; not dependent on the gov’t) 3. Allows people to be empowered by property (b/c it’s transferrable) b. Economics of Property i. Property rules should maximize net social economic utility of resources (the ideology that property exists to be used productively or exploited) ii. Communal property encourages over-depletion (e.g., nobody can stop each other from chopping down trees if they’re communally owned) iii. Externalities 1. A cost that an actor fails to take into account when deciding how to use resources 2. Externalities lead to a misallocation of resources 3. Externalities aren’t necessarily inefficient (e.g., changing behavior would cost $1,000 to save $500 of costs) 4. Internalizing Externalities: assuming zero transaction costs, those harmed would agree to pay the actor to
change his behavior, if efficient to do so (e.g., eliminating pollution at cost of $100 to save $300 harm) iv. Transaction Costs 1. Transaction costs are the costs of bringing an externality into the actor’s decision-making 2. Transaction costs may inhibit those harmed from agreeing to pay the actor; externalities persist when there’s high transaction costs 3. Types of Transaction Costs a. Informational/Organizational i. The more people in the affected group, the more costly it is to organize them b. Free-rider effect: members of the group affected by an externality have an incentive to “free-ride” on the benefits of the group’s cost to internalize the externality. i. E.g., members of community have incentive to donate little/none to pay factory for pollution control equipment, and benefit from others’ contributions. c. Legal Fees d. Policing after the actor has been paid v. Benefits of Private Property 1. Private property forces the owner to internalize the costs/benefits of the property; tend to use land more efficiently a. But, there are other ways (e.g., social customs and mores) to internalize costs from community property. Carol M. Rose, p. 50. c. Bundle of Rights i. Property is not the object ii. Instead, it is the relationship btwn people in respect to an object iii. “Owning” property is holding a Bundle of Rights against others: 1. Right to Include (rent) 2. Right to Exclude (incl. Right to Destroy) a. E.g. in Jacque v. Steenberg Homes, Inc., the ct held that the property owner had unfettered discretion in not allowing a moving co to drive across his land. b. As a matter of law, property owners don’t have the right to exclude governmental services. State v. Shack. c. Other Limitations to Right to Exclude i. Rent control and limitations on right to evict tenants ii. Anti-discrimination statutes 3. Right to Possess 4. Right to Use 5. Right to Transfer (req’s both right to include and right to exclude) iv. Note: you can have some of the bundle w/o others
1. E.g., Rx drugs – you can exclude others from them, you can possess them, and you can use them; but you can’t sell them 2. E.g., the dissent in Moore v. Regents of the University of California suggests that a property right to excised organs could be a bundle of rights, without the right to sell. d. Relativity of Title i. A person can have a relatively better title or right to possession than another, while simultaneously having a right inferior to yet another person. ii. E.g., A fox is on O’s land and T1 trespasses and takes it. T2 trespasses onto T1’s land and takes the fox. In a suit btwn T1 and T2, T1 has better title (although it’s inferior to O’s title). II. Acquisition by Capture a. Rule of Capture: the first to occupy a ferae naturae (wild animal) has possession of the animal. Mere pursuit is not enough. Pierson v. Post i. Depriving animals of their natural liberty and bringing them w/in the hunter’s certain control is sufficient (e.g., mortally wounding an animal, securing animals w/ nets, toils, and other traps). Pierson v. Post (dicta) ii. Policies for the Rule of Capture 1. Bright Line Rule a. Easier to determine who owns the fox (than if ownership belonged to the hunter in pursuit); keeps transaction costs down 2. Encourage the destruction of foxes 3. Encourages investment in capture technology (e.g., better guns to kill foxes) iii. Downsides to the Rule of Capture 1. Neglects to protect the investment in a failed capture and thus removes some incentive to hunt 2. Leads to over-exploitation of resources because of first in time nature of rule (“race to the resource”) a. This may lead to over-investment in capture technology (see picture of Spindletop oil drills on Moodle page) b. Custom (Ghen v. Rich) i. Courts may apply a custom that’s inconsistent w/ the common law rule of capture if: (PINC) 1. Not against public policy; 2. The custom regards to an isolated community (e.g., whalers off the coast of Cape Cod); 3. The custom has been used/acquiesced in the industry and is necessary for the industry; and 4. Close to the legal rule of capture. ii. Policy of adopting a custom: the industry knows best c. Protection from Unfair Competition (Keeble v. Hickeringill) i. Competition is “good” if it leads to a greater production of the resource (e.g., building a more high-tech duck pond to lure the ducks in K’s pond to H’s land)
the hunter may be on notice it’s another’s property. the captor loses possession. 4. a giraffe escapes from its pen in Mississippi) ii. 2. If the captured animal that escapes is not native to the area. But. Today. landowner would have a claim of trespass 3.. maximum rates of extraction. Rule of Increase: the offspring of two animals belonging to different owners is the property of the mother’s owner. and the animal becomes a ferae naturae (subject to the rule of capture). Common Law: once you reinject the oil/gas it becomes a fugitive resource. shooting guns to scare away ducks in a decoy pond) d. subject to the rule of capture b.g.g. Other Fugitive Resources i. iii. Rule of capture gives powerful disincentive to reinject oil/gas ii. Today: injector retains possession of the resource c. Policy a. Oil and Gas 1. Ratione Soli: a landowner acquires constructive possession of wild animals who are on his land (for the purposes of protection from trespassers) e. (e. Policy i. Subject to the Rule of Capture (see above) 2. Reinjection a.. this is not fair to the hunter. Animus Revertendi 1.g. Domesticated or Semi-Domesticated Wild Animals i. Angled Drilling a. Reinjection is more efficient than aboveground tanks . Animals that develop an animus revertendi aren’t distinguishable from wild animals.ii. Land owner invested labor in training animal to return (although hunter has argument of putting labor into the hunt) c. minimum space btwn drilling sites). Interfering with another’s trade is “bad” when it doesn’t lead to a greater production of the resource (e. Domesticated animals are valuable to society and this effort to tame wild animals is rewarded b.. If captor captures a wild animal and it escapes. 1. Wild animals that develop an animus revertendi (habit of return) continue to belong to the captor when they roam at large. Rights of a Landowner as Against a Trespasser i. Ratione Soli gives landowner constructive possession of the fugitive resources in/under the land. extraction is heavily regulated to prevent overproduction (e. (don’t necessarily know who the dad is) f.
Post. In International News Service v.g. Suitability to the locale (e. Prior Appropriation (Rule of Capture): first to capture the water and put it to a reasonable and beneficial use has a superior right to later appropriators 1. INS was copying AP’s news articles and selling it to its customers. A wins. If property rights are too restrictive. Value of use the landowner is making of the water 2. B would be on notice of A’s works (digging a big ditch) b. Water 1. Surface Water a. Factors: 1. Today: underground water/oil/gas is heavily regulated 2. The ct held that AP had a quasi-property interest in its news articles as against INS. English law: Rule of Capture b. Correlative Riparian Rights: landowners adjoining the water have riparian rights under a reasonable use standard ii. arts. If A starts diversion works before B. you lose the value of competition 2. Distinguishing Tangible Property . Underground a. Western States i. 1. A trying to build a waterpark in a farming town that relies on the water to power a mill) III. Improvement in price. Acquisition by Creation – Intellectual Property a. quality. Policy: more investment than chasing a fox. ii. Associated Press. but B finishes his works first and puts water to beneficial use before A. Harm to other riparian neighbors 3. “Good” Competition a. Imitation allows for competition b. Allow competition and avoid monopoly 1.ii. efficiency in production c. Encourage production of intellectual property (writings. Competing Policies i. US law: Rule of Reasonable Use i. Contra Pierson v. rule creates an incentive to exploit ii. Policy: water is scarce.. Common Law: wasteful uses are unlawful if they harm your neighbor ii. invention) by giving exclusive right to exploit the product 1. Eastern States i.
non-obvious processes or products i. E. Copyrights a. Trademarks a. Lasts until 70 years after the death of the author/creator c. Grokster) i. in Diamond v. b. physical phenomena. or composition of matter. The ct held that Doris is allowed to copy the design. Arise from use of the mark in commercial activity (lost when abandoned or when the mark becomes generic) iii. the ct held that P could patent a genetically engineered bacterial strain. P couldn’t © the general idea of conflict btwn parents of lovers from two different racial/religious groups. Doris copied Cheney’s designs and sold them at a cheaper price. and abstract ideas are not patentable c. There can only be one iteration of IP b. Protects novel. 35 U. In Cheney Brothers v.g.. Generally.g. Monopolies in tangible property don’t inhibit competition b/c there can be more than one iteration (e. Protect original expression of ideas (not ideas themselves). mfr.g. Doris Silk Co.. Can infer intent from device solely used for infringement 3. useful.. b. must be independent creations i. Laws of nature.. may obtain a patent…” ii. Protects words/symbols indicating the source of a product/service b. Common Law Intellectual Property Protection . E. Universal Pictures. Legislative Intellectual Property Protection 1.g. Chakrabarty. One who distributes a device w/ the object of promoting its use to infringe © is liable ii. §101: “Whoever invents or discovers any new and useful process. ii. Not renewable 2. or any new and useful improvement thereof. Subject to “fair use” (e. Protection Against Copying i..C.S.a. in Nichols v. academic settings) d. Liability for Secondary Infringement (MGM v. Lasts 20 years from date of application d. there’s no CL protection against copying 1. Patents a. more than one wheat field) b. Liable if you induce or encourage infringement iii. machine.
g. v. The Winkfield Rule is problematic in involuntary bailment situations b/c the bailor never has a chance to evaluate the trustworthiness of the bailee.g. Winkfield Rule: cts bar an action by the true owner (bailor) against the present possessor (keeper) if the bailee (finder) has recovered from the present possessor. In South Staffordshire Water Co. Finder subject to Locus Owner’s right to exclude (CERT) a. cases are split iv. Peel if the owner occupied the house) d. Sharman. ii. Object is embedded in or attached to the land i. Protecting subsequent possession instead would lead to people hiding their property . Samsung. E. Where Finder is ee. he would have to sue CS.. Protecting subsequent possession instead would create an incentive to steal 2. “Here’s Johnny” port-a-potties intrude on Johnny Carson’s likeness rights iii. Find occurs in occupied private residence (occupier has constructive possession of items in the house) (Hanna v. E. but there’s no guarantee that CS still has the money (he may have spent it already). Ct held that locus owner wins.1.. If True Owner (TO) shows up. Voluntary Bailment (example of relativity of title) 1. Finder intruded into a private area of a commercial establishment b. If the finder is a trespasser 2.g. an ee found rings in the muck at the bottom of ER’s pool. 2.. The right survives death (like property) IV. E. Bette Midler’s likeness rights were violated where Ford hired Midler’s back-up singer to sing one of Midler’s hit songs and try to sound like her. J refuses to return the jewel. c. b. Chimney Sweep (CS) finds a jewel and hands it to Jeweler (J) to have it valuated. In White v. Exceptions: Finder loses as to Locus Owner 1. Policy for Protecting Prior Possession 1. Lost Property i. iii. CS sues J and recovers.. a. Finder of lost property wins as against anyone except the true owner and prior possessors ii. Acquisition by Find a. Protects your right to control the commercial exploitation of your name/likeness i. Agency principles a. the ct held that a robot w/ a blonde wig and jewelry standing on a set that resembled wheel-of-fortune violated Vanna White’s right of publicity. E.g. Right of Publicity a.
in Corliss v. Wenner.g. “wreck” was cargo washed ashore from a ship lost at sea w/ no survivors. Atlantic Mutual Ins. they were acting on his behalf. 1. Finder is entitled to abandoned property iii.a. if Finder finds a wallet on a table. belonged to Wenner as owner of the land. the insurers of the Central America. and declare he found it there) c. Policy 1. but owner forgot to retrieve ii. 1.. the property went to the crown ii.. a ship lost at sea and settled on the ocean floor remained the owner’s property – unless title was abandoned – but anyone subsequently reducing the ship or its cargo to possession was entitled to a salvage award.. mislaid property in a park) iii. Co. At English CL. Object intentionally placed by true owner. E. this doesn’t incentivize the finder to do anything (e. If found in commercial or private premises.. Exception: where location of the find is in a private location of commercial premises or residence (function of right to exclude) 1. We would like for property to end up w/ it’s true owner b. which sunk in 1857 and was found in 1992. E. Wenner’s laborers found 4 lbs of gold coins buried in a jar when building a driveway. Property that’s voluntarily relinquished w/ no intention of reclaiming by the true owner ii. Some states have a similar scheme of reward for finders of personal property iv. Policy . But. True owner is more likely to retrace his steps for mislaid property a.g. Maritime Law i. The coins. salvors who found the ship were legally entitled to a salvage award iii. This is bad b/c it has social value (to be marketable) b. Mislaid Property i. Under traditional maritime law. Facilitate return to true owner 2. Ct held that since the finders were working for Wenner. Abandoned Property i..g. didn’t abandon their title and were still owners of $1B in gold on board. like the dirt they were excavating to build the driveway.g. belongs to Locus Owner as against finder. Exception: where there’s no locus owner (e. he would have incentive to knock it to the floor. Wouldn’t buy security technology (“fencing” the property) 3. True owner better off leaving mislaid property w/ locus owner a. This may be overbroad b/c a true owner may retrace his steps to recover lost property too 3. in Columbus-America Discovery Group v. d.
Facilitates return to true owner.. By feeling the . gifts causa mortis) iii. must redeliver property previously delivered to the donee as bailee iv. The car had been seized by the gov’t b/c it was used to transport drug proceeds and sold to Buyer. prior delivery ratified by a subsequent stmt of intent is permissible) (c.g. Terry v. the ct held that Donor didn’t give subsequent bonds to Donee where Donor placed them in a joint safe-deposit box in which both had access. 2. ct held it to be mislaid b/c no one would abandon so much money. presumed by the ct and a non-issue b. But. Treasure Trove i. iv. Possession was awarded to hotel owner for the same reasons as Benjamin. Revoked (canceled) or revocable by recovery in health iii. Delivery i. and acceptance). There must be an intent to transfer title now. ii. Delivery 1. in Hocks v. Hyland below) c. Lindner Aviation. Usu. E. V. but the elements are applied more strictly 1. Gift of personal property made in anticipation of Donor’s imminently approaching death ii. Intention by Donor to make present transfer of the property 1. 1. Inc. See Benjamin v.. Gifts Causa Mortis i..1.. intent. ii. no separate treasure trove doctrine. Lock Hospitality. silver plate. E. creates incentive for finders (c. Ct held that money was abandoned b/c the culprits couldn’t claim it w/o risking arrest for drug dealing.. Handing over the object makes vivid and concrete to the donor the significance of the act performed. Jeremiah.e.000 More or Less. Policy for the Delivery Requirements 1. delivery.g. See also. Today. where money was found in the gas tank of a car. Note: intent to give and delivery DO NOT have to coincide (e.f. Acquisition by Gift a. Same elements as a gift inter vivos (i.. cts use lost/mislaid/ abandoned distinction iii. where $38k was found in the ceiling by K’ers. gold.f.g. where $18k was found in the wing of an airplane. At English CL. the law of finders) e..g. B/c gifts causa mortis run contrary to the statute of wills 2. E. A gift made by a donor contemplating suicide may be a gift causa mortis (see Erosion of Constructive Delivery – Scherer v. see In re Seizure of $82. Donor must place property w/in donee’s exclusive control. Acceptance by the donee 1. Elements for Inter Vivos Gifts of Personal Property i. 2. treasure trove (money/coin. “I will give you this watch” is not a valid gift. or bullion hidden in the earth) belonged to the king.
when the steps taken by the donor… must have been deemed by the donor as sufficient to pass the donor’s interest…” 2. E. Some items are too cumbersome and bulky b. Donor physically transfers possession of an item to the donee 2. Some items aren’t readily available (located far away) c. ii. prima facie evidence in favor of the alleged gift. Usu. Donor physically transfers to the donee the means of obtaining access to and control of the property i. there is every indication that the donor intended to make a present transfer… and 3. Donor then left and committed suicide. 2. substitutes are effective ONLY when manual delivery is impossible or impracticable a. But see Gruen v. involves handing over a written instrument declaring a gift of the subject matter 3. Hyland i. Limitations: a.g. Donor received a check from another.“wrench of delivery. Constructive Delivery a. Manual Delivery 1. a remainder interest) d. 2. in Newman v. b. Erosion of Constructive Delivery – Scherer v. and put it on the table w/ a note giving it to donee. b. Intangible property cannot be manually delivered iii. Generally.. Donor affected constructive delivery of a bureau and other household furniture by handing the donee the keys that unlocked these items. Delivery of the object to the donee gives the donee. The act is unequivocal evidence of a gift to the actual witnesses of the transaction. Donor physically hands Donee an object that represents or symbolizes the gift. Bost. endorsed it.” the donor realizes an irrevocable gift has been made.g.. “the evidence of donative intent is concrete and undisputed. Ct found constructive delivery adequate where: 1. Impracticable when the donee receives less than complete title to the item (e. where a Father’s letter to Son giving him a future interest in a painting was . after the act. ii. 3. Gruen. Substituted Delivery 1. Symbolic Delivery a.
Possession i. It is possible for Donor to give a gift to Donee. Donative Transfers. Non-owner (bailee) has rightful possession (see Voluntary Bailment above) e. If symbolic delivery always allowed. Smart held that death acts as revocation on a check iii. One can reserve a life estate in the possession of the gift 1. Safety Deposit Boxes 1. even though it would be easy to take it off and hand it over. and then have Donee entrust possession of the property with Donor. even though it was possible for S to go to F’s house. (this view is w/o case support) c. Presently grants title to the property while reserving possession (Gruen v. If the donor’s not at fault. Traditional Rule a. and S to give it back to F. Checks 1.sufficient. b. Who accessed it (even if others had access to it)? VI. cts consider: a. Checks aren’t gifts until they are cashed. The System of Estates: Possessory Estates PRESENT ESTATE FSA FT LE FSD FSSCS FUTURE INTEREST None O: Rev A: Rem O: Rev A: Rem O: Possibility of reverter A: Executory Interest O: Right of Entry/Power of Termination . Donor gets it back (doesn’t matter who’s at fault) ii. To determine if delivery is made.2. Modern Approach a. Engagement Rings 1. Policy i. iii. F to hand S the painting. b/c the owner can cancel the check before then (lack of delivery) 2. §32. people will write. Special Gift Rules i. it’s a conditional gift (a gift that’s conditioned upon the marriage going through) 2. who retained the possessory interest. Illustration 3: A gift of a watch by a document is valid. d. ii. Gruen) iv. Who paid for safe deposit box (even if both used it)? b.” which is unenforceable. Distinguish Bailments 1. Good permanent evidence of the transaction iii. Donor gets the ring back if he’s not at fault b. (2d) Property. Valid gifts transfer possession and ownership of the property. Donor feels the wrench of delivery ii. See also Rest. “I will give A this watch. Woo v.
Words of Purchase: indicate the party to whom the property is being transferred (“to A”) . Inheritability: If decedent dies w/o a will (dies “intestate”). Devisibility: Owner can will (“devise”) the property as she wishes c. Scope of the Interest a. No one presently has the right to possess the property in the future. FSA lasts forever (------->). the heirs apparent (parties who think they will receive the owner’s property when she dies) have a mere expectancy. Note: while owner is alive. she has the right to transfer the property freely to whomever he or she wishes. Fee Simple Absolute (FSA) i. the property passes to the decedent’s heirs (heirs “inherit” the property) i. Alienability: While Owner is still alive. but no property interest (no present right to possess the property in the future).FSSEL ESTATE FSA FT LE LE (PAV) FSD FSSCS ESTATE Rev Possibility of Reverter Right of Entry Vested Remainder Contingent Remainder Executory Interest A: Executory Interest ALIENABILITY OF POSSESSORY ESTATES TRANSFERRABLE DEVISABLE INHERITABLE Yes Yes Yes Yes No No (except to heirs of body) Yes No No Yes Yes Yes Yes (today) Yes (today) Yes Yes (today) Yes (today) Yes ALIENABILITY OF FUTURE INTERESTS TRANSFERRABLE DEVISABLE Yes Yes Yes (today) Yes (today) Yes (today) Yes (today) Yes (today) Yes (today) Yes (today) Yes (today) Yes (today) Yes (today) INHERITABLE Yes Yes Yes Yes Yes Yes a. Creating a FSA 1. There is no future interest. 2. The Nature of the Estate 1. the owner has the right to possess the property forever (if she could live that long) b. Temporal Duration a. (“No one is heir of the living”) ii. b.
e. Today. the property escheats to the state where the property is located . Distribution is made among decedent’s issue per stirpes: if any child of the decedent dies before the decedent leaving children who survive the decedent. greatgrandchildren. Incl.2. brothers. Where O conveys Whiteacre “to A for life. Heirs are persons who (1) survive the decedent and (2) are designated as intestate successors under the state’s statute of descent.” the ct interpreted “to the heirs of B” to create an FSA to B b. Ancestors a. etc. children share equally. children. Default estate is to grant all that Owner has (i.. Must say “to A and his/her heirs” to create a FSA iii. All persons related by blood to the decedent who are neither descendants nor ancestors b. If the eldest son predeceased the decedent leaving issue. grandchildren. remainder to the heirs of B. an FSA if he has one) ii. Rule of Primogeniture: eldest son inherited the land i. such child’s share goes to his or her children by right of representation c. Decendants (incl. Issue a. nephews. This rule was used until 1925.) b. Common Law i. b. Heirs a. Words of Limitation: indicate the duration of the estate being conveyed (“and her heirs”) 3.g. Collaterals a. If person dies intestate w/o any heirs. Modern Approach i. Default Estate a. 3. uncles. his eldest son or other issue represented him ii. nieces. Inheritance of a Fee Simple 1. Must say “to A” (words of purchase) iii. The default estate (when the “magic words” aren’t there) was a life estate ii.. sisters. Exception: 1. Parents take as heirs if the decedent leaves no issue 4. and cousins 5. if decedent leaves one child. Escheat a. aunts. the spouse takes half) 2. The surviving spouse is designated as an intestate successor of some share in the decedent’s land (depending on who else survives) (e.
” Ct held it was a FSA. Either a reversion back to the grantor. and so on until there are no “children” to take the fee tail. An interest under a fee tail is transferrable. devisable. in Johnson v.g. O conveys Blackacre “to A for life remainder to B and his heirs. A has a life estate. a life estate to that child’s children. E. 3... devisability and inheritability depend on whether they are vested or contingent.. E. and inheritable. Numerous Clauses Principle 1. B has a remainder interest in FSA ii. Grantor can limit the eligible heirs of the body of the immediate grantee a. since B doesn’t have heirs. a life estate to his children. becomes a FSA) by an inter vivos conveyance . “To A and the heirs of his body. Words of Limitation: “heirs of his body” means issue 2. Royal Whiton couldn’t devise land “to my granddaughter Sarah and her heirs on her father’s side.b. and upon each child’s death. Remainders’ transferability. and if A dies w/o issue. 2. Future Interest a. E. Life estate to the immediate grantee. iii.e. then to B and her heirs” gives B a Rem| FSA d. The transferee would take a life estate pur autre vie measured by the life of the party who transferred the life estate. Creating a Fee Tail: “to A and the heirs of his body” 1. or b. Reversions are freely transferable. The state escheats the future interest in Blackacre. Nature of the Fee Tail 1. but not devisable or inheritable (b/c it’s a life estate). B dies intestate w/o heirs.” i. A remainder interest (if grantor conveys it to another party) c. The state has a FSA. 3. Fee tail is “disentailed” (i.g. The Fee Tail i. FT special: “to A and the heirs of his body and to wife Katheryn” ii. A dies. b.g. Policy: reduces transaction costs b. Possessory Estate a. “unicorns don’t fit in the zoo”) 2. Prohibits new/customized property interests (“you have to order off the menu”. iv. e. Whiton. FT male: “to A and the male heirs of his body” b. and upon his death.
2. RI) recognize the fee tail a. Ambiguous Language in Wills 1. By definition. Lasts for the duration of the grantee’s life. MA. otherwise. Remainder interest to a 3d party iv. Forfeiture restraint: forfeit property if attempt to convey c. Life estates are transferable (see Life Estate Pur Autre Vie above) 2. Category 1: fee tail language creates a FSA. give effect to the remainder. Alienability 1. remainder gifts are void b. Future Interest a. a restraint as to a certain time/persons) is also void . ME. Validity of Restraints on Alienability (Rest. Promissory restraint: promise not to convey property (legally enforceable K) 4. Donative Transfers. Reversion in the grantor. ch. Two Categories of States that Don’t Recognize the Fee Tail a. Life Estates i. 4) a. Fee Simple i. life estates cannot be inheritable or devisable 3. At CL. it’s interpreted as giving as much as possible (FSA if grantor has it) iii. Creating a LE: “to A for life” ii. Restraints on Alienability a.a. Can still disentail by inter vivos conveyance 2. the LE was the default estate 2. Most courts: A partial restraint (e. So he conveys it to X (creating a FSA) and X conveys it back to A. iii. if a will’s language is ambiguous. If a life tenant transfers his interest. Upon life tenant’s death. the life estate pur autre vie immediately expires v. Only four states (DE.g.. Disabling restraint: withholds a power to convey b. Recognition of the Fee Tail 1. inheritable. While the life tenant is still alive. a LE pur autre vie is transferable. Category 2: one-generation FT: if A doesn’t have any issue. Possessory Estate/Future Interest 1. “Straw Man Transaction”: A (w/ fee tail) wants complete control over Blackacre. FT language creates FSA c. Today. and devisable 3. An absolute restraint of any type is void ii. (2d) Property. the grantee holds a life estate pur autre vie (a LE measured by the life of the original life tenant) 2. OR b. Life Estate Pur Autre Vie 1.
Valuation of Life Estate and Remainder 1. Failure to take reasonable care of the property (a Q of neg) 4. Want to promote the most productive use of land b. Second Restatement: A partial restraint is valid if reasonable iv. But if the mines were not open before the LE was created.g. 2. Also applies to cutting down trees 3. Affirmative Waste a.iii. the life tenant cannot open them. which allows the life tenant to not pay but keep the property. NPV of LE = value today + PV(interest received in life expectancy) vii. whereas a disabling restraint. Permissive Waste a. (3) and the life tenant’s life expectancy. Founders didn’t want there to be a landed aristocracy c. Policies Against Restraining Alienation a. If doesn’t have power to sell the property. Restrictions Concentrate Wealth i. does not 5. The value of a LE depends on: (1) the value of the asset today. 2. Efficiency i. Substantially Increasing the Property’s Value . Restraint in the form of a FSSCS (specified use) usually upheld b. Waste 1. (2) the rate of return. A and B) have rights to possess property at the same time or consecutively. it is presumed that the grantor intended the life tenant to be able to continue mining. If the mines were opened by the grantor before he created the LE. Forfeiture restraint is valid iii. No incentive to improve for resale ii. Creditor might be deceived (house insulated from collection efforts) vi. Absolute disabling restraint is void ii. A should not be able to use the property in a manner that unreasonably interferes w/ the expectations of B. Liability resulting from injurious acts that substantially reduce the value of the property b. no power to mortgage iii. Policy: forfeiture induces the life tenant to pay debts. Restraints discourage improvements on land i. Exception: “Open Mines” Doctrine i. Where two or more persons (e. ii. Life Estate i.
provided the value of the remainder is not diminished by these actions 5. Future Interest a. take out young boy. Today: life tenants can make substantial alterations or even demolish a structure when conditions change. “to A for 99 years” 3. Can have “term of years determinable” (“to A for 99 years. Transaction costs may be high b/c the life tenant and the remaindermen are locked into dealing with each other (i.a. “to A. hit him over the head w/ a stick d.” and “during” also work) 2. Note: the more certain (and less “iffy”) the future interest of the remaindermen is. Problems w/ the Life Estate 1. Words of Limitation a. Durational event (“while. Possession + feudal incidents and services 3. Fee Simple Determinable (FSD) 1. the more cts protect their interest b. if A so long live) e. Harder to lease the land from life tenant (have to negotiate w/ remaindermen too) ix. Duration a. pick up clod of dirt. Method of Transfer a. Freehold estates (FSA. Estate ending on a fixed calendar date 2. hand it to transferee. The conduct in question d. Not much flexibility 2. Seisin 1. Term of Years 1. Possibility of reverter . Harder to mortgage b/c need agreement by remaindermen 3. Defeasible Estates i. Leasehold Estates i. Testator’s Intent c. Factors in Application of the Waste Doctrine a. Lasts as long as the event occurs/doesn’t occur 3. CL: Ameliorative Waste Action – grantor intended the remaindermen to receive the identical thing granted b. Livery of Seisin: go to land. FT.” “until. the life tenant doesn’t consider costs to the remaindermen b. Nature of the property interests of the competing parties i. Externality: in using the property. so long as [an event]” b.e. The remedy sought viii. LE) all had seisin 2. Externality Problem w/ the Waste Doctrine a. a bilateral monopoly) 6.
Exception (some states): Possibility of Reverter and Right of Entry can be “released” to the person holding current possession (i.k. The grantee is still in compliance with a “for ___ purposes” condition if he also uses the land for other things 2. not enforce his right) Where it is ambiguous whether a FSD or a FSSCS is created: 1. the promisee may sue for an injunction or damages. E. the word “whenever” was used in the reverter clause. Words of Limitation a.” . CL Rule: FSD and FSSCS are not transferrable inter vivos or in a will a. v. Held w/ the grantor Covenants Distinguished 1.g. of Sch. b.” and “upon the condition that” also work) 2. Some states: you can transfer possibility of reverter. Conditional language (“provided that. Policy: dislike forfeiture “for ___ purposes” 1.. where an FSD was conveyed conditioning that the land be used “for church purposes. vi. Modern Rule (majority): FSD and FSSCS are transferrable inter vivos or in a will 2. Hutton has the right to re-enter the land and claim possession” c.e. If a condition imposed by the grantor in creating defeasible fee is breached.ii. Skipper.a.g.. the word “only” was in the granting clause. in Davis v. Future Interest a. Transferability 1. whereas in its case. “power of termination”) b. E. 2. Default Rule: courts prefer FSSCS over FSD a. but not a right of entry 3. Right of entry (a. Grantor’s Intent a.. What did the grantor want to happen if the condition was not fulfilled? 3.g. County Bd. the ct noted that in North v. iii. Trs. but if [an event]” b.. Work with the language a. 2. A covenant is a promise by the grantee that a specified act will or will not be performed.. E. “to A. The transferor always maintains the possibility of reverter Fee Simple Subject to a Condition Subsequent (FSSCS) 1. Graham. If a covenant is breached. iv. the land is or may be forfeited to the holder of the future interest. has to be exercised d. “to A. Not automatic (like FSD). but if the land isn’t used for a school. Some states: attempt to transfer a right of entry destroys it 4. in Mahrenholz v.
“So long as” language looks like an FSD c. O has a right to re-enter.. Cts’ preferred construction is a FSSCS e. ix. where testator devised land to his son w/ a provision for forfeiture if the son’s daughter were ever to own. possess. Condemnation of Defeasible Fees 1. the ct struck the provision. “Right to re-enter” language looks like a FSSCS d. Matters for SOL purposes a. b. vii. the testator left a farm to Richard Cast in fee simple on the condition that “Richard or one of his children shall occupy the farm as his or her residence for 25 years. so long as premises aren’t used for sale of alcohol. Casey. striking oil. Transferability (see “Transferability” above) 2.. Trust & Sav. Wrap Up Example a. For FSSCS. The deed says “O to A and her heirs.” w/ forfeiture for breach of condition. E. Since the church building was still being used for a church. FSSCS matter? 1. B wants A’s interest to be a FSD b/c A would win against O under SOL (adverse possession) i. and if they are. Assn. the SOL starts running when Grantor makes a demand to retake the land. the land did not revert to grantor. or be a guest on the land for more than one week a year.g. in Cast v. O could still retake the property b/c SOL doesn’t start running until he makes a demand for the property.The church executes an oil and gas lease and oil wells are drilled. Nat’l Bank of Commerce. For FSD. If it’s a FSSCS. When does FSD vs. Less likely to strike restraints on alienation when dealing w/ giving gifts to charities/nonprofits 2. of Lincoln. B is considering buying A’s interest and wants to set up a bar. c. More likely to strike restraints on alienation when the condition is unreasonable or void b/c capricious and imposed for spite or malice a. Some states: SOL starts running when condition doesn’t occur in either FSD or FSSCS 3. the SOL starts running when the condition is broken b. E. viii. Restraints on Alienability 1. Ct held condition void. using alcohol in cooking and serving champagne for no extra cost at brunch. Condemnation proceeding: gov’t’al agency makes forced sale (eminent domain) .g. b. in Casey v.” A has operated the restaurant for 11 yrs.
the fee owner should have the entire award 4. if in will) i. Refer to hierarchy of estates above 2. conveys “To A for life” 4. the wife can elect to follow the will c. Characteristics a. comment b: if the defeasible fee would prob. Policy: against restraints on marriage 3.. Today. so long as she remains unmarried. Turns on Grantor’s intent: a. If the will allows for more than 50% to wife. owning FSA conveys “To A for life.2. Definition a. If the will allows for less than 50% to wife. The interest of the Transferor after transferring a vested estate of a smaller quantum that the vested estate he owns (and the transfer does not specify the ownership of the future interest) b. Restraint against marriage is construed as narrowly as possible. the wife can elect to take up to 50% of the estate b. does not automatically include w/in it a restraint against cohabitation w/o marriage 5.1. Rest (2d) Property § 53. Transferrable inter vivos 3.The System of Estates: Future Interests a. Always vested b. Durational (“so long as”) – good motive b. the holder of the reversionary interest takes nothing 3. if”) – bad motive 4. May/May Not be Certain to Become Possessory a. E. Certain . then to revert to O” b. Both LEDs and LESCSs are possible VII. The holder of the possessory estate takes the entire condemnation award. Conditional (“but. owning FSA. Descendible (heirs) c. if inter vivos. Reversion 1. comment f a. Policy: any future interest would be speculative x. there’s a forced elective share that a surviving spouse can take a. Expressly: O. Devisable (will) d. then to X” 2.g. testator. “O to W for life. consistent with the language employed in describing the restraint and. not end w/in a reasonably short period of time (not taking into account the condemnation). Defeasible Life Estates 1. How are they created? a. By default: O. Rest (2d) Property §6. hence. Future Interests in the Transferor (grantor.
” If A dies before B. then to B and her heirs. A has a possibility of reverter e. O’s future interest (Rev | FSA) is certain to become possessory. either in O or his heirs/devisees b. E. Executory Interests cut off (“divest”) the preceding Estate before its natural expiration ii. Board has FSSCS c. AND b. Vested Remainder (VR) 1. if O conveys Blackacre “to A for life”.g.g. O conveys Greenacre “to A for life” b. the life tenant dies) 2. B has a LED iii. O conveys “to A for life. so long as no tavern is operated on the property” c. O has Possibility of Reverter 3. Remainders vs. Future Interests in the Transferee i. Vested Subject to Open (or Partial Divestment) . E.g. A conveys Greenacre “to B for life. B’s future interest goes his heirs/devisees/escheats. A Rem becomes possessory immediately at the natural end of the preceding Estate (e. Executory Interests 1. Example a. Power of Termination) 1. A has conveyed a determinable estate of the same duration as his (LE) d.” A: LE.. Definition a. Example 2 a. If B dies before A. but if it ceases to use the land for library purposes. O conveys Whiteacre “to Town Library Board.a. Given to an ascertained (born) person. Example 1 a. O has the right to re-enter and retake the premises” b. O has a Right of Entry b. Transferor conveys a determinable estate of the same quantum that he has 2. 3. Right of Entry (a. Uncertain i. then to B and her heirs if B survives A. B gets FSA and the reversion fails to become possessory (i.. “Indefeasible” (plain old) Vested Remainder a. O conveys Whiteacre “to Town Library Board.i. Future interest that follows a FSSCS 2. Not subject to a condition precedent 2. cannot be divested b. it is “divested”).e. so long as used for library purposes” b. E. O conveys Blackacre “to A for life.g.k. Two years later. Possibility of Reverter 1. ii. A remainder is vested if: a. Certain of becoming possessory. B: VR | FSA.
If first future interest is a Contingent Remainder in fee simple 1. using above example. O: Rev | FSA.g. B: VR subject to open | FSA. B’s interest is Vested Subject to Open b/c A could have more kids. Vested Subject to Divestment a. A: LE. A didn’t have kids.g.. then to B and her heirs. A: LE. Contingent Remainder if Recipient is Unascertained a. Heirs of B: CR | FSA. Read left to right. if at time of grant. If a LE followed by future interests i. Contingent Remainder 1. b. then to the heirs of B. Recipient unascertained. O conveys “to A for life. 4. A remainder is contingent if: a. Compare. Rule of Thumb a. i. Is subject to a condition precedent 2.” B is A’s child at time of grant. O conveys “to A for life. to C and his heirs” – a Contingent Remainder b. OR b.. E. current members of the class may have their interest partially divested because of additional class members in the future. and if B does not survive A. If the first future interest is a Vested Remainder in fee simple 1. The following future interest in a Transferee will be a Contingent Remainder ii.. but if B does not survive A to C and his heirs. If has kids. E. O conveys “to A for life. Remainder can begin as contingent and become vested based on later events ii. comma to comma 2. The following future interest in a Transferee will be an Executory Interest iii. Classify interests as you go (vested or contingent).a. A: LE.g. THEN move to next interest 5. 3. Order of language 1.. Contingent Remainder if Subject to Condition Precedent .” i. then the remainder becomes vested. A’s potential kids: CR | FSA. Vested Subject to Open occurs w/ class gifts. E.” B’s heirs are unascertainable until he dies. O conveys “to A for life. then to B and her heirs if B survives A.g. O: Rev | FSA. Keys to distinguish Contingent Remainders from Vested Remainders Subject to Divestment i. Here. then to A’s children and their heirs. E.
g. This DOES NOT apply to Vested Remainders.g. Acceleration: a. CL: B’s CR is destroyed b/c not ready for possession. C: CR | FSA. B: CR | FSA. A: LE. possession goes to the future interest holder (acceleration). 5. B: CR | FSA.” A has a 17 yr old child. early CL forfeiture for treason. Modern: O holds by reversion. contingent remainders can become vested based on later events a. B: CR | FSA. A and B die simultaneously. Note: these are alternative contingent remainders iii. Note: when it’s ambiguous. b. A: CR | FSA. and if B does not survive A. E. to C and his heirs” i. 1.. If LE is forfeited or ends early. the name stays. O holds it iv. Again. Note: O retains a reversion. If a Remainder-holder transfers to O. B: VR | FS subject to open c. Reverts to O ii.” A and B Jointly: LE. This is because A’s LE can end before he dies. A: LE. iv. Why the Vested/Contingent Distinction Matters 1. then to B and her heirs if B survives A. VR preferred over CR 2. and (2) their future interests have an express condition precedent. O conveys “to A for life. throw on a Reversion to O. even thought it seems like the future interest would either go to B or C. Vested.. Not a Condition Precedent if Mere Surplusage i. E. then goes to B when he turns 21. O: Rev | FSA.g. When B turns 21. O conveys “to A for life. B. E.” A and B have CR | FSA b/c (1) the survivor is unascertained. and in the event of A’s death to B and her heirs. but not Contingent Remainders..” B has VR | FSA.g. It does not become a reversion (although it has the same effect).g.. then to the survivor in fee simple. O conveys “to A for life. O: Rev | FSA. 4. ii. If A dies when B is only 17: i. General Rule: when alternative Contingent Remainders follow a LE.. become possessory however and whenever the preceding estate ends .a. c. if B dies before he turns 21. E. O conveys “to A and B for their joint lives. then to A’s children who shall reach age 21. E. O: Rem | FSA. b.
Contingent Remainders are assignable in most JRDs 4.. however b. O: Rev | FSA 2. O conveys to “A for life. C: Shifting Executory Interest | FSA 2. still contingent b. B doesn’t get possession. an Executory Interest divests another interest to become possessory a. Contingent Remainders were not transferrable inter vivos a. A: LE.g. Destructibility of contingent.g. it is a Shifting Executory Interest b. E. but not vested remainders 5.. B: Contingent Remainder | FSA. TODAY. No future interest could be created in favor of a transferee if it cuts short a freehold estate 1. E. O owns Blackacre 3. Executory Interests 1. Origins in Equity a. then to B and his heirs. If A dies when B is age 17: a. Restrictive CL rules and the response in equity i. O conveys Whiteacre “to my eldest son A and his heirs. ii. but not Vested Remainders are subject to the rule against perpetuities v. b.g. but if B dies under age 21 to C and his heirs” 1. CL: contingent remainder is destroyed. B: Vested Remainder Subject to Divestment | FSA. Acceleration. Vested Remainders were assignable and creditors could reach them c. E. If it divests the transferor. No freehold Estate can be created to spring up in the future. A: LE.i. B gets possession. then to B and his heirs if B reaches age 21” 1. Contingent. They were inheritable.” A: FSA. it is a Springing Executory Interest 2. B: nothing. C: Executory Interest | FSA ii. O conveys to “A for life. If A dies when B is age 17: a. In general. then Whiteacre is to go to my second son B and his heirs.. At early CL. but if A inherits Blackacre. Creditors of remaindermen couldn’t reach them i. B: FSA Subject to Executory Limitation. If it divests a transferee. .
E. Enfoeff “X and his heirs to the use of O and then to such persons as O shall appoint by will” ii.” i. Feudal incidents due upon descent to heir b/c of O’s death 2. avoided if O grants to “A. O conveys “to A and her heirs when A marries B. O enfeoffs “X and his heirs to hold to the use of A and his heirs. E. appoint more ppl) . But. O covenants to stand seised for the benefit of Daughter ii. then for the use and benefit of A” i. B. giving a written deed granting “to A and his heirs” ii. E. O enfeoffs “X and his heirs to hold to the use of O and his heirs. “to A for life. Compare Covenant to Stand Seised i.…Z as joint tenants for the use of O and his heirs” a. then to the use of O’s second son B and his heirs. X is subject to a duty enforceable in Equity to hold for the benefit first of A. Gave rise to the bargain and sale deed i. E. Did not prevent the creation of a remainder to commence in the future. then to B and her heirs. But equity req’s O to hold legal title for the benefit of A d.. O holds legal title iii. Could effectively deivse property 1. and then later perhaps to the benefit of B ii.g.g. Love and affection for relatives sufficed as good consideration to raise a use e.g. No livery of seisin.1. The Rise of the Use a. O: FSA 2.. X has legal title.” A: nothing. E. Note: Shifting Use b. E. if number grows thin.g. Note: Springing Use c. grantor has to pay taxes (so you appoint a large number of people... Add ppl b/c once grantees die.g.. 3. provided there was a freehold estate in a transferee to support it.g. Other Benefits i.. O sells Blackacre to A for $50.” Livery of seisin to A was sufficient to create A’s freehold LE and also to sustain B’s remainder. but if A marries B. but if A inherits the family manor. C. Tax Avoidance 1.
Modern Executory Interests a. 14: O conveys “to A and his heirs.g. A had only an equitable interest 2. After the statute. A: Fee Simple Subject to an Executory Limitation (FSSEL) c. A holds legal title iii. Note: A and B hold LEGAL title ii. NOTE: the FSSEL here is a present possessory estate c. Incidents due b. A: FSSEL ii. then to B and his heirs. A: Springing Executory Interest | FSA b.3. to C and her heirs. Similar to a Defeasible Fee. After the Statute of Uses a. Before the Statute of Uses a.” i. B: Shifting Executory Interest | FSA iii. Ex. O retained legal title (no livery of seisin). A fee simple that upon an event occurring is divested in favor of an Executory Interest held by a transferee ii. Ex. Statute of Uses a.” 1. If a person seised for benefit of another. 12: O bargains and sells “to A and his heirs. to B and her heirs” i. A: LE . O retained legal title. Ex. 13: O covenants to stand seised for the benefit “of A and her heirs when A marries B. Ex. Before the Statute of Uses a. Created the Fee Simple Subject to Executory Limitation (FSSEL) i. but if B returns from Rome. O: FSSEL 5.. then seisin (legal title) deemed transferred to beneficiary of the Use i. Seisin never passes on 4. A Use (equitable) was thereby converted to a legal interest i. except the future interest is held by a transferee.” 1. but if A dies w/o issue surviving him. “to X and his heirs for the benefits of A” ii. A and B had only equitable interests (a Use) 2. 15: O conveys “to A for life. then to B and her heirs. E. B: Shifting Executory Interest | FSA b. but if B dies under the age of 21. After the Statute of Uses a. not O b.
“It’s a Unicorn in the Zoo” 1. the FI is FSA b/c it cannot be divested after becoming possessory (B survives A) 6. Distinguishing FSSCS 1. Ex. but if the premises are not used for school purposes during the next 20 yrs. FI in FSSEL (executory interest) held by 3d party 3. but if B does not survive A to C and his heirs. Ex. here the future interest goes to a 3d party ii. A: LE 2. “So long as” language looks like FSD 2. to B and her heirs. B: Shifting Executory Interest | FSA b. Compare. Title 1. C: Shifting Executory Interest | FSA 4. Executory Interests and Defeasible Fees a. School Board: FSSEL 2.” i. 17: O conveys “to Town Library Board so long as the premises are used for library purposes. Children’s Hospital: Shifting Executory Interest | FSA a.ii. Ex. 8: O conveys “to A for life. then to Children’s Hospital. Primer: FSSEL c. C: Shifting Executory Interest | FSA iv. Logically. Distinguishing FSD 1. possibility of reverter goes back to O.” 1. FI in FSSCS (right of entry) held by O 2. In FSD. Subject to loss before it becomes possessory AND after it becomes possessory (if B isn’t 21) iii. Casebook: FSD b. NOTE: the FSSEL here is a future interest v. Library Board: FSD 2.” i. its successors and assigns. not an optional right of entry ii. 16: O conveys “to Hartford School Board. B: Vested Rem Subject to Divestment | FSA 3. Either is acceptable iii. Title 1. B: Vested Remainder Subject to Divestment | FSSEL 1. AUTOMATIC divesting if the condition happens. then to B and her heirs. Shouldn’t be an executory interest b/c it doesn’t divest the FSD . Here.
(a) O conveys “to A for life. A: LE b. 238) a. A: LE 2. comes to you to draft an instrument of gift. are born to A. survived by his child (D) and B. O tells you he wants to convey Blackacre to his son A for life. O. but FI is in 3d party: FSSEL followed by an Executory Interest ii. then to A’s children and their heirs. C’s Heirs: FSA (divesting condition never occurred) ii. to B and her heirs. A’s kids: Contingent Remainder | FSA c. A: LE ENDED b. B: Contingent Remainder | FSA d. A: LE b. C. then to such of A’s children as survive him. O: Reversion | FSA 2. and upon A’s death O wants Blackacre to go to A’s children if any are alive or. but if none of A’s children survives him. but if at A’s death he is not survived by any children. a. B: Shifting Executory Interest | FSA 3. Problem 1. i. D: Contingent Remainder | FSA 3. twins.” 1. if none are then alive. D: FSA c. O: Reversion | FSA . to O’s daughter B.” At the time of the conveyance. Shouldn’t be a remainder b/c a remainder can’t follow a vested fee simple c. owner of Blackacre. Rules of Thumb i. If grant looks like FSD. Suppose A is alive and has no children a. D: Vested Remainder Subject to Divestment and Open | FSA c. C and D. B: Contingent Remainder | FSA 4. Suppose that A’s child (C) dies during A’s lifetime and that A later dies.2. (b) O conveys “to A for life. but FI is in 3d party: FSD or FSSEL followed by an Executory Interest 7. If grant looks like FSSCS. 1. More Problems (p. A is alive and has two children. C and D. then to B and her heirs. C. a. Two years after the conveyance.
A: LE 2. Upon A’s death X conveys the trust property to A’s children if any are alive or O if A has no surviving children. ii.000 and reinvests the $200. 1. A: equitable LE iii. Generally 1. if and when he survives his wife. Trust Basics 1. C. If X sells Blackacre for $200. A’s children: equitable contingent remainder | FSA iv. Trustee must act for the exclusive benefit of the beneficiaries and is not permitted to benefit personally b. X: legal FSA ii. Problem 2. Beneficiary has Equitable interest a. then to such surviving children and their heirs. Equitable Future Interests track Legal Future Interests i.” At the time of the conveyance. B: Vested Rem Subject to Divestment | FSA 3. and then to pay the principal to A’s children who survive A.” a. 18: O conveys Blackacre “to X in trust to pay the income to A for life. Acreage accounts . but not to his cousin’s wife ii. Principal (remainder): Distribution of assets at end of the period 3. Ex. Trustee is a fiduciary a. Trustee has Legal Title 2. (c) O conveys “to A for life. Trustee is subject to personal liability to the beneficiaries for breach of fiduciary duties 2. No self-dealing. C and D. T devises $10. Don Little.” i. A is alive and has two children. Don Little has a Springing Executory Interest iii. T’s intent: T wants the money to go to his cousin. Keep Trust assets separate from own 4. but if A is survived at his death by any children. D: Shifting Executory Interest | FSA b.000 in Whiteacre and General Motors stock. then to B and her heirs.iii. Trusts i. Trustee cannot sell assets to himself as an individual 3. Income for specified period b. the trust property then consists of these latter items c.000 “to my cousin. O: equitable reversion | FSA b. Testator’s legatees are divested c.
conveyancers began creating increasingly complex arrays of Estates and Future Interests 4. 19: O conveys Blackacre “to A for life. merges into FSA 5.Impartial treatment of Income and Remainder Beneficiaries Exercise prudent management judgment Subject to personal liability for breach Trusts are not subject to CL rules against restraints on alienation a. Rule: A remainder in land is destroyed if it does not vest at or before the termination of the preceding freehold estate.. Destructability of Contingent Remainders (241-42) 1. A: LE ii. Trusts drafted such that trust beneficiaries have no power to transfer or borrow against their trust interests ii. B: Contingent Remainder | FSA iii. E. Trusts that can continue to control the disposition of wealth forever into the future d. B has LE PLUS Vested Rem | FSA. 8. Creditors have no power to reach those interests to satisfy beneficiaries’ debts iii.” A conveys his LE to B. At time of conveyance: i. then to B and her heirs. Rules Furthering Marketability i. B’s Contingent Rem is destroyed b/c it didn’t vest before A died. After the Statute of Uses. .g. Ex. i. Judicial Response: create rules that curb uncertain Future Interests in order to enhance alienability ii. 7. O conveys Blackacre “to A for life. Rule of Merger: If the LE and the next vested estate in fee simple come into the hands of the same person. People have always wanted to try to control the ownership of their property not just at death but into the future 2. the lesser estate is merged into the greater Estate b. Destruction by MERGER a. 3. O: Reversion | FSA b. Some state statutes make the settlor’s own equitable interest immune from creditor claims b. Also sought to prevent future generations from making foolish decisions and squandering wealth 3. 2. Destruction by Staying Contingent at End of LE a. then to B and her heirs if B reaches 21. “Perpetual” or “Dynasty” Trusts i. 6. Spendthrift Trusts i.” A dies when B is age 15. Background 1.
Destructibility doesn’t apply to Equitable Interests 5. leaving a child. Suppose A dies during B’s life and B has one child C at the time. Transferor’s intent. Limitations a. The Rem was still Contingent at the end of A’s LE (b/c not held by an ascertained person). Then A dies. b. A conveys his LE to O. C owns Blackacre. B: LE per autrie vie ii. Suppose that A conveys his LE to B i. 11: Merger doesn’t apply when the LE and the next vested Estate are created simultaneously in the same person.” a. Suppose that B dies during A’s life. C’s Contingent Rem became Vested at B’s death (during A’s life). A: LE ii. T’s heirs: Reversion | FSA iv. B’s children: Contingent Remainder | FSA iii. Suppose A conveys his LE to T’s sole heir. 20: O conveys Whiteacre “to A for life. The Contingent Rem is destroyed d. C. f. The Contingent Rem is destroyed. Example Problem: Suppose Testator devises “to A for life. T’s heirs: Reversion b. i. then in fee simple to B’s children who survive B. P. X: LE per autrie vie ii. Ex.c. Suppose A dies during B’s life and B has no children. A: LE 2. X: Reversion | FSA iv. O: Rev | FSA ii. c. B’s contingent remainder is destroyed 4. At time of conveyance: 1. B: Contingent Remainder | FSA 3. 1. O has FSA!!! 3. LE and next vested estate are NOT held by same person. No merger.” i. Destructibility doesn’t apply to Executory Interests c. The condition precedent (to survive B) isn’t yet satisfied. e. n. Title at time of devise: i. B’s children: contingent remainder | FSA iii. then to B and her heirs if B survives A. i. B’s children: Contingent Remainder | FSA iii. T’s heirs own blackacre. X’s LE merges into his Rev | FSAbecomes FSA . X i. O has the LE and the next vested Estate 2. i. 242.
(3) purports to create a remainder in persons described as A’s heirs (or the heirs of A’s body). has the remainder in FSA (or fee fail) f. C: Vested Rem Subject to Open | FSA c. a. A: LE ii. Current Status of Destructibility of Contingent Remainders (242-43) a. D: Springing Executory Interest | FSA 3. A dies.. Simplified Rule. Cannot in same instrument create a LE in a person and a Reminder in the heirs of that person 2. C. Under The Rule in Shelley’s Case: i. After Abolition: 1. C turns 21. THEN A. Ex. A is alive. O conveys Whiteacre “to A for life.” Two years later. Then later. Does Merger apply? i. C. (4) the life estate and remainder are both legal or both equitable. At CL: 1. IF (1) one instrument (will or deed) b. A: Vested Rem | FSA b. The Rule a. then to such of A’s children who reach age 21. O: FSA ii. The Rule in Shelley’s Case 1. a. A: LE b. i. O: FSSEL 2. D is 17. E. e. not his heirs. Abolished in ¾ states b. C: FSSEL (C divested O’s FSSEL) b. then to A’s heirs. Suppose A dies. Whenever you see a Shelley’s Case issue. Suppose C is 21 and D is 17. always check for merger after applying the Rule in Shelley’s Case .g. D: Shifting Executory Interest | FSA iii.” a. 21: O conveys Blackacre “to A for life. D: Contingent Remainder | FSA 4. LE and next vested estate in the hands of AA: FSA ii. (2) creates a life estate in land in A. leaving children C and D ages 8 and 4. they’re destroyed 3. D: Contingent Remainder (to reach 21) 2.6. Since they’re still contingent at the end of A’s LE. and d. and c.
E. Under the Worthier Title Doctrine i. Abolished in all but three or four states b. O: Reversion | FSA iii. O: Rev | FSA b. THEN no future interest is created in the heirs of Grantor. then to A heirs” a. What if the grant instead left the remainder in “A’s children?” i. Under The Rule in Shelley’s Case: i. his heirs have the vested remainder. Also important to know the Rule b/c it will apply to land situated in a state that sill has it i. The Doctrine of Worthier Title 1. Applicability a. then to B for life. Cts have applied the rule as late as the 1990s as they construe wills and deeds that predate the abolition c. B: Vested Remainder | LE iii. A: LE ii. A: LE ii. IF: i. O conveys “to A for life.c. Status of the Doctrine of Worthier Title . Inter vivos conveyance of land ii. A: Vested Remainder | FSA b. rather. drafting a will for a TX couple who owns land in AR iv. Grantor holds a Reversion 2. Rule a. Ex. 4.. The Rule in Shelley’s Case applies to Contingent Remainders as well as Vested Remainders in “A’s heirs” b. Rule in Shelley’s Case does NOT apply (“children” ≠ “heirs” or “heirs of A’s body”) 3. The Rule in Shelley’s Case does NOT apply to executory interests 5. A: LE ii. If B dies during A’s life. merger still doesn’t apply. But abolition sometimes not retroactive i. Status of The Rule in Shelley’s Case a. 22: O conveys Blackacre “to A for life then to O’s heirs. c..g.” a. E. O’s unascertained heirs: Contingent Remainder | FSA iii.g. A future interest in Grantor’s heirs (either a Remainder or an Executory Interest) b. In the absence of the Worthier Title Doctrine: i. Note: merger does not apply here b/c A does NOT have the next vested estate after her LE. O’s heirs take nothing 3.
a. Abolished in many states b. Sometimes survives as a rule of construction i. E.g., in a grant from O “to A for life, then to O’s heirs” the ct assumes that O intended to retain a Reversion as opposed to making a grant to his heirs ii. But not a binding rule in those circumstances. Depends upon intent. v. The Rule Against Perpetuities 1. The Rule: No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest 2. General Observations a. Interests subject to the Rule: Contingent Remainders, Executory Interests, Class Gifts (Vested Rem Subject to Open) b. The interest must EITHER vest OR fail w/in a life in being plus 21 years c. Life in Being i. When does the clock start running? 1. For a will, the death of the testator (not the date of the will) 2. Inter vivos: Date of delivery of the deed ii. Whose lifetime to use? 1. Generally, someone whose life is causally connected to vesting or failing of the interest 2. E.g., a life tenant for the future interests that follow 3. Ex. 23: O transfers a sum in trust “for A for life, then to A’s first child to reach 21.” a. Future interest subject to the Rule: A’s first child: Contingent Rem | FSA b. Contingency: A having a child that attains age 21 c. A’s interest is valid: 21 years after A’s life, we will know whether A’s first child’s interest vests or not. A cannot have kids after he dies. d. A child is considered “in being” from the date of conception (if later born alive) 4. Ex. 24: O transfers a sum in trust “for A for life, then to A’s first child to reach 25.” a. Assume A has NO children at all at the time of the grant i. Future interest subject to the Rule: A’s first child to reach 25: Contingent Remainder | FSA ii. Contingency: A having a child that attains age 25
iii. A’s interest is invalid: We don’t know if A will have a kid that reaches 25 years old 21 years after A’s death. iv. Strike out invalid clause: Grant becomes: “for A for life”; A: LE; O: Rev | FSA b. What if at the time of grant A has a 24 year old child? i. A’s interest is invalid: A’s kid could die before reaching 25. Then, the analysis follows the example above. 5. Ex. 25: T devises property “to my grandchildren who reach 21.” T leaves 2 children and 3 grandchildren under 21. a. Future interest subject to the Rule: T’s grandchildren: Contingent Remainder | FSA b. Contingency: T’s grandchildren reach 21 c. Validating Lives: T (dead), T’s kids, T’s grandchildren d. Grandchildren’s interest is valid: 21 years after T’s children’s lives, we will know if their grandchildren reach 21. e. What if the same grant occurred in a deed? i. Can’t use T’s children as validating lives b/c T can have grandchildren other than through his currently living children. ii. Current children of T could die. T has third child, Z. T and his children other than Z all die. Z has a child, who is a grandchild to T. Z may turn 21 after T dies. 6. The Fertile Octogenarian and Precocious Toddler (P. 247, FN 22) a. All persons are deemed capable of producing children regardless of age b. Cannot defeat by evidence that the particular person is medically incapable of producing children c. Ex. 26: T devises a sum in trust “for A for life, then to A’s children for the life of the survivor of them, then upon the death of the last surviving child of A, to A’s grandchildren.” At the time of T’s death, A is an 80-year old woman w/ two living children, B and C. i. Title 1. A: LE 2. B, C: Vested Remainder Subject to Open | LE 3. A’s grandchildren: Contingent Remainder | FSA a. Or Vested Subject to Open if 1 born 4. T’s Estate: Reversion | FSA
ii. B and C’s interest is valid. At A’s death, the class (of A’s children) closes. iii. A’s Grandchildren’s interest is invalid. 1. Contingency: A’s grandchildren who survive the last surviving child of A. 2. Validating lives: A, B, C 3. A can have another child, X. It is possible for X to have a child (A’s grandchild) more than 21 years after the end of the validating lives. 4. No vesting (class closing) until death of last child of A – here X – which may be more than 21 years after the end of the lives of A, B and C. 7. Frozen Sperm a. If considered the possibility, then many more future interests would violate the Rule b. See, Ex. 23: O transfers a sum in trust “for A for life, then to A’s first child to reach 21” i. Valid b/c A’s first child to reach 21 will do so w/in 21 years of his death ii. But what if a woman is inseminated 5 years after A’s death that would turn 22 (or fail to do so) 2 years after A’s life? c. Courts disregard the possibility of posthumous parentage for purpose of Rule Against Perpetuities. 8. Class Gifts (248) a. All or Nothing Rule. Gift to a class must stand or fall as a unity. That is, if any class member fails the Rule, then all fail. b. In other words: i. The rule applies to Vested Rem Subject to Open ii. They are not “vested” for purposes of the Rule Against Perpetuities c. See Problem 4 below. 9. Problems (248-29) a. Problem 1: O conveys “to A for life, then to B if B attains the age of 30.” B is now 2 years old. i. Contingency: B attaining the age of 30. ii. Validating lives: A, B iii. B’s interest is valid. Use B for the validating life. At the end of B’s life, we’ll know whether or not he reached 30. 1. If we used A for the validating life and A died tomorrow, it would be 28 years before we’d know whether B reached 30. iv. Note: The rule doesn’t req the interest to vest in a certain time. It only req’d that we
d. E. B iii.” i. Use B as a validating life. A: LE 2. a teacher of property law. A dies.. to B’s heirs. Use B as a validating life.000 “for all members of my present property class who are admitted to the bar. i. Validating life: all the members of the property class iii. A’s potential children: Contingent Rem | LE (b/c they’re unascertainable) 3. Possible Validating Lives: A.g. c. Title 1. ii. and the new child is admitted to the bar > 21 years after the death of A and his current child. A has another. and the kid passes the bar when he’s 25. It is possible for the contingency to remain open 21 years after A’s death. B: Contingent Rem | FSA (b/c of the condition) 4. Even if A now has a 22 year old child in law school. A’s children’s interest is valid. b. . Problem 3: O. E. B’s interest is valid. and if B is not then alive. Members of the property class who are admitted to the bar: Springing Executory Interest ii.will know whether it vests or fails to vest w/in a certain time. B’s heirs: Contingent Rem | FSA ii. then to A’s children for their lives. The grant is invalid. Problem 2: O conveys “to A for life. A’s children will be ascertained at the end of A’s life. Title 1. A has his only kid right before he dies.” i. We will know at the end of B’s life if he survived A’s children. declares that she holds in trust $1.g. When all the members of the property class have died. iv.. O holds in trust $1000 “for the first child of A who is admitted to the bar. then to B if B is then alive. O: FSSEL 2. that child may die. The class (B’s heirs) will close at the end of B’s life. v. we will know whether or not they were admitted to the bar.” Assume that A has no children at the time of conveyance. B’s heirs’ interest is valid. The class members’ interest is valid.
for life.” 1. . C’s interest would not vest w/in 21 years of A and B’s life. Title 1. to [the person or persons indicated in the bracketed examples below]. Therefore.” A and B survive T i. “After Born Widow Issue”: when a grant refers to a widow.” A has a child. A: LE ii. B: CR (condition of A dying childless) 2. A’s Widow: Contingent Remainder | LE 3. Widow will be ascertainable at A’s death. Z: VR subject to open | FSA ii. B. If A has a kid. A’s unascertained kids: CR | LE 3. then to A’s children who reach 25. B’s interest is invalid. Vested Remainders Subject to Open must close w/in 21 years of a life in being. Can’t use Widow as validating life b/c she may not be born at time of grant. living at the time of the conveyance. Is the remainder valid? i. Widow’s interest is valid. if any. we won’t know 21 years after A’s death who A’s issue will be “then living” at Widow’s death. Class Gift Problem – Problem 5: T devises property “to A for life. Using A’s life for a validating life. then to A’s issue then living. it’s possible that she isn’t alive at the time of the grant. age 26. A: LE 2. she can’t be used as a validating life. and A and B die next year. C. A’s issue’s interest is invalid. (a) [B if A dies childless] 1. A’s issue “then living”: Contingent Remainder | FSA 4.e. and upon the death of A and A’s children. and on A’s death to A’s children for their lives. using A’s life. f. Using A’s life for a validating life. g. We will know whether A dies childless by the end of A’s life. 6. Class gift – all or nothing. O: Reversion | FSA 5. Valid. Problem 5: O conveys “to A for life. iv. B: Vested Remainder Subject to Open iii. i. A: LE 2. Widow may live > 21 years after A’s death. Problem 4: O conveys “to A for life. then to A’s widow. 3. A could have another child. Thus.
(c) [B’s children] 1. Same as (b). “Then” is at the death of the lives of A’s children 2. 3. A’s life doesn’t validate b/c A could have a child alive more than 21 years after he dies. B’s kids: CR (unascertainable) or VR subject to open (if has kids at time of grant) 2. The lives of currently living children of A do not validate b/c A could have an afterborn (new) child who outlives the earlier children by > 21 years. 3. 3. 4. vi. 5. B’s life validates. 4. The lives of any currently living children of A don’t validate b/c A could have an afterborn (new) child who . Invalid. B’s kids then living: CR (condition of B having children then living) a. B’s life doesn’t validate b/c A could have a child alive more than 21 years after B dies. 3. We will know who B’s children are at the end of B’s life. A’s grandchildren: CR (unascertained) or VR subject to open 2. 4. (b) [B if A has no grandchildren then living] 1. v. iv. A’s life does not validate b/c A could have a child alive more than 21 years after he dies. 5. (d) [B’s children then living] 1. (e) [A’s grandchildren] 1. Valid. B: CR condition of A having no grandchildren then living a.iii. B’s life does not validate b/c A could have a child alive more than 21 years after B dies. A’s life doesn’t validate b/c he could have a child who is still alive > 21 years after A dies. We will we know who A’s grandchildren are at end of A’s children’s lives. The lives of A’s currently living children don’t validate b/c A could have an afterborn (new) child who outlives the earlier children by > 21 years. “Then” is the end of the lives of A’s children 2. Invalid.
but grandchildren had been born.Savings Clause (note 7. It provides for termination of Trust (if not already terminated) upon the end of 21 years after a specified life in being c. 27: O conveys Blackacre “to the School Board so long as it is used for a school. If T has at least one child alive.g. then no grandchildren were added ever (fails to vest immediately) 5. Solution: Terminate 21 years after the death of the survivor of A and A’s issue living at T’s death. If T never had any children. If T had all predeceased children. Ex. Invalid vii.outlives the earlier children by > 21 years. T’s children are validating lives 4. RAP problem: A has an afterborn child.. To avoid a Perpetuities problem.RAP and Future Interests in Transferors (250) a. The afterborn child lives more than 21 years after the deaths of A and his other children and any previously born grandchildren ii. At the death of the last of them. they are lives in being. then the income to A’s children to their lives.g. The Restatement says that a savings clause is ineffective if the group of persons is too large to be feasible 11.. 249) a. E. the grandchildren’s interests are immediately vested (class closed).” . We will we know who T’s grandchildren are at end of T’s children’s lives 3. we will know who T’s grandkids are. E. Testator: “Income to A for life. d. Can use an extraneous life in a savings clause. Possibility of reverter. T’s grandkids: CR (unascertainable) or VR subject to open 2.” This is rarely done b/c of administrative burden of keeping track i. reversion b. right of entry. (f) [T’s grandchildren] 1. terminates at “the last person to die who is alive in China at the time of my death. then the principal to A’s grandchildren” i. 6. 5. 7. Valid 10. sophisticated Trust instruments include a savings clause b. Future interests held by transferors are regarded as vested and therefore not subject to RAP i.
then to A and her heirs. Ex. market-price rights of first refusal created in commercial or gov’t (but not family) transactions. 29: O conveys Blackacre “to the School Board so long as it is used for a school. School Board: FSSCS ii. VALID under RAP 12. are not subject to RAP. But remember.” i. How to draft around this? i. O has a right to re-enter.” i.Executory Interests Following Defeasible Fees a. in some states these interests are not transferable inter vivos ii. “preemptive rights”) are subject to RAP and are void if they are exercisable beyond the perpetuities period. First convey FSA to A 1.a. O gets Possibility of Reverter b. Invalid under RAP iii. VALID under RAP c.Options (The Symphony Space. O: Right of Entry | FSA iii.” i. Then A conveys FSD or FSSCS to the School Board 13. rights of first refusal (a. Effect: Strike the clause. In NY. i. Then O conveys the Possibility of Reverter or the Right of Entry to A 2. b. In many states. but if it ceases to use Blackacre for school purposes.k. If FSD/FSSCS terminates in O’s lifetime. Invalid under RAP iii. Draft as in Ex 27 or 28 (FSD or FSSCS) 1. Ex. Board gets FSA!!! c. 28: O conveys Blackacre “to the School Board. School Board: FSD ii. Effect: Strike the clause. Draft as in Ex 27 or 28 (FSD or FSSCS) 1. Pergola Properties. O: Possibility of Reverter | FSA iii. A: Executory Interest | FSA ii. Inc. Options are subject to RAP and are void if exercisable beyond lives in being plus 21 years. then he conveys (or devises) FSA to A iii. but if it ceases to use Blackacre for school purposes to A and her heirs. A: Executory Interest | FSA ii.) a. Ex. v. but are subject to the CL rule against unreasonable restraints on alienation . Then O devises the Possibility of Reverter or the Right of Entry to A 2. 30: O conveys Blackacre “to the School Board.i. Inc.
Second Stage: specific statutory repairs designed to avoid purely technical violations by altering the CL conventions in certain specific circumstances 1. Avoid “unborn widow” by presuming that a gift to the surviving “spouse” of a living person is a gift to a person in being 3. Reformation may be made at any time iv. If yes.c. Cy pres: reform a disposition so that it avoids any perpetuity violation while effectuating the transferor’s intent as nearly as possible 3. Like age contingencies. (3d) Property (minority view): RAP doesn’t apply to options 14.. Uniform Statutory Rule Against Perpetuities (USRAP) and Rest. if O grants “to A. Early Reforms i. If it is still in existence and not vested at the end of that period. 2. then it is invalid. Two step process: a. the statute changes 25 to 21. but more general 2. E. Valid under CL RAP? i. we wait and see whether a contingent interest actually vests w/in some permissible vesting period. Third Stage: “immediate reformation” 1. First Stage: focus on the actual rather than possible facts existing at the end of the estate preceding the FI ii.Perpetuity Reform Movement a. . Reform of age contingencies. Wait-and-see approach 1. Avoid “fertile octogenarian” and “precocious toddler” problems by providing that anyone 65+ or < 13 is deemed incapable of having a child 2.g. there is no waiting ii. iii. If no: b. then to A’s first child to reach 25”. The interest is valid if in fact it vests or terminates w/in the permissible vesting period. Rather than invalidating an interest at the time of its creation on the basis of the what-might-happen test.
The tax was avoided creating trusts w/ successive LEs. b. then to pay income to A’s kids for their lives. Federal Estate Tax 1. Trustee has power to sell”) iii. the income to go to my Descendants.g. E. wait to see if it vests 3. then to distribute the principal to A’s grandchildren. 2.. c. intestacy or survivorship to another person. Under USRAP: don’t immediately invalidate. 20 states have abolished RAP in the case of trusts and replaced them w/ a rule against suspension of the power of alienation. Perpetual Trusts i.g. . The trust could continue until RAP called for the assets to be distributed. then to A’s first child to reach age 25” 1. Uniform Statutory Rule Against Perpetuities (USRAP) i. wait 23 yrs iv. Federal estate tax levies a tax on any property interest transferred by will. At the death of the life tenant. If it remains contingent after the 90 years. T devises property in trust to pay income to daughter A for life. dead when the interest is deemed invalid. CL RAP: At time of grant. but w/ the 90 day waitand-see approach.. “to A for life.i. determine if it’s possible for the contingent interest to remain contingent 21 years after a life in being. as long as the trustee has the power to sell the property ii. except for transfers to spouses and charities. E. the lawyer who drafted the grant is prob. ii. “to X in trust. Violates CL RAP 2.. the interest is invalid. iii. If A dies w/ 2 yr old. a. as long as the trustee has the power to sell (e. leaving no transfer to be taxed. Not clear what the permissible vesting period is.g. USRAP: Wait-and-see if the contingent interest remains contingent 90 years after the grant. These trusts potentially last forever. The USRAP tried to create incentives to not to create RAP problems. the tenancy ends.
$1. . . a GST tax is due at the child’s death if the property passes to the next generation. Problems Arising from a Persistent Dead Hand 1. donative freedom b. doesn’t allow others to buy it and put it to better use c. If property is tied up in trust. Upon the death of A’s children. At A’s death. An estate tax will be levied at the death of A’s grandchildren. 3. descendants may prefer the property be in trust . Perpetual trusts don’t give rise to a problem of inalienability b/c the trustee almost always has the power to sell 2. $3. Property should remain alienable so it can go to the highest/best use b.1M in 2002.. In 1986.g. in the above example. estate tax is levied on the property. 4.5M in 2004. The Problem of Inalienability a. no federal estate tax is payable at A’s death b/c A doesn’t have a transmissible interest. provided a $1M exemption from the GST tax for each transferor (doubled for married couples).b. Generation-Skipping Transfer (GST) Tax (1986): if transferor creates a LE in a child that avoids (“skips”) the federal estate tax at the child’s death. The Problem of First-Generation Monopoly a. Equality btwn ancestors and descendants vs. Inflation adjustments: $1. . a. from T to his grandchildren. At T’s death. But. iv.5M in 2009. another GST tax is levied. E. a generation-skipping transfer occurs. but no estate tax is levied at the death of A or at the death of A’s kids b/c they don’t have interests transferrable on death. so at A’s death the GST tax is levied on the value of the nonexempt corpus of the trust.
devisable. Ppl shouldn’t be protected from falling c. Conveying an interest in JT destroys the “unity” of time and title. B and X are tenants in common. Common Law Concurrent Interests INTEREST TRANSFERRAB DEVISABLE INHERITABLE LE T in C Yes Yes Yes JT No.g. . Time. A has 60% and B has 40%) iv. where tenants can have unequal interests (e. E.. Transferrable inter vivos. JTs must acquire title at the same time ii. Tenancy in Common (T in C) a. Certainty of receiving trust income makes beneficiaries lazy and unproductive b. ii. JTs must acquire title by the same instrument iii. Severing a Joint Tenancy i. Types. each tenant has a separate undivided interest b. Founding fathers didn’t want us to have a “leisure class” a. divorces) 3. 2. C. JTs must have equal interests. Four “Unities” must be met: i. Effect on indiv: ppl are better off if they’re able to fall Co-ownership and Marital Interests a. JTs have a Right of Survivorship c. Like T in C..g.. (spendthrifts. By Conveyance 1. T in C. only btwn H No. undivided interest in the land b. 1. destroys No. Joint Tenancy (JT) a.g. Characteristics. A sells his interest to X. Action for partition 1. A can bring action against B to partition property. A and B are JTs. Interest. Title. Each tenant has a separate. Creation 1. A and B are JTs. JTs must have equal right to possession of the whole (at the time of creation) d. rt of unities survivorship survivorship T by E Not unilaterally No. E.VIII. only btwn H and W and W i.. incompetants. inheritable 2. Possession.f. rt of No.
Problems and Note (p. they buy a house . and C as joint tenants. There’s no difference b/c interests in JTs are not devisable either. Subsequently A conveys his interest to D. Title: 1. 278) a. Two weeks before the ceremony. E. “to H and W” 1. in JT. X would be a (T in C) w/ B. or divide proceeds from sale btwn JTs. Today. remainder to the survivor. Can do physical partition. iv. A & B: Contingent remainder | FSA 3. Presumptions a. B. Policy: cts want property to be in fewer hands ii. b. What if B had died leaving a will devising his interest to H? 1. Each tenant is seized as to the whole c. O conveys Blackacre to A. Neither H nor W can convey their interest on their own w/o the other’s consent 4. But. Problem 1. D (T in C) w/ [B & C] (JT) ii. Note: this has virtually the same effect as JT. tenancies in common are favored. A & B: LE 2. C has 2/3 interest in (T in C) iii. Problem 3. “To A and B jointly” might not be a JT at CL. Title: 1. At CL. Tenancy by the Entirety (more on this later) a. “to A and B” 1. A and B are planning to be married. CL presumed an intention to create a T by E 5. if A conveyed to X. H gets nothing b/c an interest in JT is not inheritable (right of survivorship) 2. D has 1/3 interest in (T in C). B dies intestate. 3.2.g. T: Rev | FSA ii.. destroying the right of survivorship c. joint tenancies are favored. leaving H as his heir. 1.” or “To A and B as JTs w/ no right of survivorship” would be better. Four “unities” of joint tenancy + marriage b. i. Problem 2. in the case of ambiguity. “To A and B as JTs and not as T in C. T devises Blackacre “to A and B as joint tenants for their joint lives. Today: tenancy in common iii. i.” i. CL: joint tenancy 2.
Probate is costly. When a joint tenant dies. lawyers and ct costs must be paid. Tenancy in common (default) is also reasonable ii. A JT avoids probate b/c no interest passes on the joint tenant’s death. If A and B take title as joint tenants and A furnishes $5k and B $10k. 7.and take title in “A and B as tenants by the entirety. c. and to the survivor thereof. E. Deed to grantees “jointly. d. b. The unity of “interest” req’s joint tenants to have equal shares. equally. w/ equal rights and interest in said land. jointly. . severing the JT. as tenants in common. Title: 1. administrators. b. the creditor can seize and sell the joint tenant’s interest in property. A moves out of the house and conveys his interest in the house to his brother C. Ct: deed created JT b/c it provided for survivorship 6. JTs are the practical equivalent of a will but at the joint tenant’s death probate of the property is avoided. . even though “nothing passes” at the tenant’s death. Several years after the marriage. as (T in C). C and A are (T in C).” i.. and there is nothing to seize. and the parties intend the proceeds from sale of the joint tenancy property to be divided 1/3 and 2/3 if sold during their joint lives. . his share of the jointly held property is subject to federal estate taxation. Avoidance of Probate a. At the joint tenant’s death. w/ equal rights and interest for the period or term of their lives. d. If a creditor acts during a joint tenant’s life. To Have and to Hold the same unto the said parties hereto. It is increasingly ignored by courts in situations where it counts. and to the survivor thereof at the death of the other. his interest disappears. 1. The conveyance converts the JT into a (T in C). . Unequal Shares a. in fee simple. Joint tenancy was created b/c it better approximated their intent (right of survivorship) 3.” i. Probate is the judicical supervision of the administration of the decedent’s property that passes to others at the decedent’s death. No tenancy by the entirety b/c not married yet 2.g. Note 4.
Create a fee simple to take effect in possession in the future 3. (Must meet the four “unities”) 2. Riddle v. Minneapolis Federal Sav. Suppose W writes a deed in her own handwriting: “I convey my interest in Blackacre to myself. to terminate the JT w/ H. H dies and W destroys the deed. Sprague. b. but this might not work b/c the severance may lower the property value .. Straw Man Transactions (SMT) i. Atty conveys back to A and B as joint tenants.” She shows her daughter and puts it in her desk. destroying the JT. a. Create a joint LE w/ Contingent Rem | FSA to the survivor b. the ct will divide the proceeds according to their intent ii. ii. 4. the norm). one-half of the property is distributed as if A survived and one-half as if B survived. Invitation for Fraud. MN allows a joint tenant to create a (J in C) by signing a “Declaration of Election to Sever Survivorship of Joint Tenancy” (a deed is usu. Harmon.a JT is created. Ass’n. & L. and if the property is sold. Hendrickson v. Gen’lly mortgages do not sever JTs (they’re considered liens on the property.g. E. a. This gives lendees/mortgagees incentive to join all joint tenants in the loan b. Then. Creating an Indestructible Right of Survivorship a.. The mortgagee could tell the joint tenant to sever the JT (by partition action or straw man transaction). Before this rule. H and W are joint tenants. Uniform Simultaneous Death Act § 3: if joint tenants die in a common disaster and there is “no sufficient evidence” of the order of death. E. Atty conveys back to W. not conveyances). the murder severs the JT and converts it into a (T in C) 5. W conveys to Atty. joint tenants needed a SMT to destroy the JT. a. Death of Joint Tenants. b. Harms v. A owns FSA.g. Uniform Probate Code § 2-803(c)(2): If one joint tenant murders the other. conveys to Atty. SMTs can also create a JT. Create a (T in C) in FSSEL w/ an executory interest in the survivor c. Severance of Joint Tenancies 1. A joint tenant can destroy the JT and convert it into a (T in C) by transferring the interest from herself to herself as tenancy in common.
J takes out a mortgage of $5k. J succeeds Wm in ownership. Wm dies. Some JRDs: D takes from A b/c A had (T in C) (lease affected severance). b. Some JRDs: No severance. If A dies after the lease expires. What are B’s rights? i. Suppose Wm and J are JTs of Blackacre. need clearer intent to destroy right of survivorship. the parties can make agreements like this. 288-89) a. Types of JT Bank Accounts . Before Blackacre is sold. Boswell iii. Problem 3. severing a JT 6. Question 2a. A and B own Blackacre in JT. ii. Problem 1. d. Does the agreement destroy the unity of possession? Upon A’s subsequent death. iii. B gets ½ ii. A dies. Under the “title theory”. Problem 2b. the JT re-emerges c. lessee is left w/ nothing. After the JT’s created. B would have right of survivorship upon A’s death. Joint Tenancy Bank Accounts 1. D gets ½. The property is worth $5k. Some JRDs: May partition the property in divorce decree. i. H and W. devising all of his property to D. Questions and Problems (pp.c. The mortgage expands to the whole property. W dies. some JRDs hold that the lease affects a temporary severance during the lease. A conveys a 10 yr term of years in Blackacre to C. Since the JT isn’t severed. are getting a divorce. They sign a divorce agreement providing that Blackacre will be sold and the proceeds divided equally btwn H and W. The lease expires when landlord dies. W’s estate can sue for specific performance of the K to sell the land and have the proceeds divided. the mortgage is considered a conveyance. who owns the land? i. Some JRDs: divorce automatically converts a JT btwn the former H and W into a tenancy in common ii. Suppose that A and B sign a written agreement giving B the rentals from and possession of the land for her life. owners of Blackacre in JT. After five years. Tenhet v. Does H have survivorship rights in Blackacre? i. after the lease. 4 unities must be present at the creation of the JT. The intention to sell does not sever the JT.
Is A entitled to the bonds and cash? i. 3. opens a joint bank account with his niece. the lease agreement signed w/ the bank provides that the contents of the box are owned in JT w/ right of survivorship. The money deposited in the savings account comes from savings from H’s salary that H formerly had in a separate savings account. Need more info. open a joint savings account. O deposits $5k in a joint and survivor bank account w/ A as JTs. “True Joint Tenancy. What other family members did he have? How rich was he? What did she do for him? c. Since there is no expression of intent. a widower. Problems (pp. “I’ll want your name on this account so that in case I am sick you can go and get the money for me. presume right of survivorship. no survivorship rights. Problem 2. H dies. Don’t pay attention to the bank K. 290-91) a. H and W are in their sixties. Assume survivorship rights were intended unless there’s evidence to the contrary. A is not entitled to the money. Is A entitled to the money in the bank account? i. O intended to create a convenience account (no survivorship rights). Problem 1a. claiming that the entire amount in the savings account is hers. No. d.” O intends to make a present gift to A of one-half the sum deposited in addition to survivorship rights to the whole sum on deposit. “Payable-on-Death” Account. 4. Problem 1b. ii. the fact that it’s a large sum of money is evidence that he didn’t want to bestow a right of survivorship. cts assume the joint account belongs to the parties in proportion to the net contribution of each party. “Convenience” Account. it doesn’t reflect O’s intent. c. S. The box contains $328k in bonds and cash. A. O tells A. Determine what kind of acct it is from O’s intent. O. .a.” O dies. But. b. iii. Suppose that O also gives A a right of access to O’s safe deposit box by adding A’s name to the signature card giving access. Example. 2. W. H and W and their son. b. During the lifetime of the parties. O intends that A only have power to draw on the account to pay O’s bills. O intends to give only survivorship rights.
2. HELD: A gets possession for 6 mo. divide proceeds (more common) c. Partition in Kind: physically split up property (preferred) d.. then B gets possession for 6 mo.. Economic Efficiency a. HELD: partition sale if physical partition “cannot be made w/o great prejudice to the owners” (sale may be ordered if the value of the share of each cotenant is less than his share of money equivalent that could be obtained for the whole” c. A and B have a joint savings account of $40k. A’s creditor would be able to reach what B contributed. Generally i.g. Does S have any rights to the money? i. Problem 3. Hendrickson. If B contributed all $40k. then A. Maybe supposed to be True Joint Tenancy btwn H and W. How much of the account can A’s creditor reach? i. Relations among Concurrent Owners 1. Best interests of the parties 1. Partition a. Factors i. Widow: wants partition in kind. Gray v. Applies to JT and T in C (not T by E) ii. b.. In re McDowell. A and B are heirs to an old rocking chair. Johnson v..g. Cotenants: want partition by sale b. Numerous fractional small interests ii. E. Impractible/inequitable 1.g. Partition by Sale: sell the property. E. and a convenience account for S d. Creditors can reach the proportion in net contribution of each party ii. E.withdraws the balance. intending to be given to A (if true joint tenancy) iv. etc. Can agree on partition or bring an action to partition b.. Crotts. Possible to have different types of account for the same account ii. One cotenant arg: upon physical . Difficult to make physical partition a.
UNLESS the tenant has ousted the cotenant. v. Ct ordered partition in kind b/c heirs’ emotional attachment to the land. draw lots 2. Fairness a. he should be awarded the part of property adjacent to his home.. c. Delfino v. If can’t agree on use of property. Occupying cotenant refuses a demand of the other cotenants to be allowed into use and enjoyment of the land iii. b. ii. Ark Land Co. even though it was more efficient to partition by sale.g. A tenant in possession has no liability to a cotenant not in possession for rental value. Sampson) i. but other heirs refused to sell. d. ii. Set up a competing use and cotenant objects iv. Liability of Cotenant for Rent/Occupancy (Spiller v. A bought 2/3 of family farm. Ct ordered partition in kind where D resided and ran family bus. Leasing an Interest in Tenancy (Swartzbaugh v. E. a cotenant’s lease of his interest in tenancy does not affect a severance. a tenant does not have the power to do anything to prejudice the joint tenant’s interest. Methods of Ouster 1. Ask cotenant for access and be denied 2. The fact that the econ value of the prop as a whole would be less if it were partitioned is not dispositive. Sharing the Benefits and Burdens of Co-ownership a.partiion. Rents and Profits . Harper. An agreement never to bring an action to partition the land is unenforceable as a restraint on alienation.. Ouster. on prop. Accounting for Benefits. Whether in (T in C) or JT. HELD: divide prop by 4. Owelty: compensation for adverse impact on ex-cotenant’s land e.g. Recovering Costs i. 2. Vealencis. E. Mackereth) i. partition b. c. In JT.
Absent agreement. Taxes. 2. and other carrying charges. In a partition by sale action. But.g. 3. Each cotenant is entitled to a pro-rata share of rents received from 3d parties. or may use excess pmt as a credit in an accounting or partition action. iii. paying cotenant receives a credit for reasonable cost of repairs in a partition or accounting action. Accounting is based on actual receipts. timber).. may recover excess in a contribution action. Mortgage Pmts. If tenant refuses to pay. each cotenant entitled to pro rata share of profits if tenant exploits natural resources on the property (e. In an accounting. Improvements 1. Also. and Other Carrying Charges 1. But. iv. minerals. the improver is allowed all increments in value attributable to the improvements . where cotenant is in sole possession of the property. Repairs 1. All cotenants are obligated to pay proportionate share of mortgage. If one cotenant pays more than his share. improved portion is awarded to improving cotenant a. Or divide the property but order pmt (owelty) from noncontributing tenants to the improver 3. In a partition in kind action.1. proceeds distributed to award the improver the added value 4. no rt to contribution from cotenants as to pmt for necessary repairs. cotenants can bring an accounting action against him to force pmt. cannot recover these pmts unless they exceed the reasonable rental value of the property. 3. tax. 2. 2. not FMV ii. No right to contribution from other cotenants for expenditures for improvements 2.
Curtesy – H took LE in all W’s FSAs and FTs if they had kids Modern CL System Forced elective share: spouse can elect to take ½ of ALL spouse’s prop COMMUNITY PROPERTY SYSTEM Creditors can reach debtor spouse’s share of CP Rights upon divorce H and W take their own separate property Community property split in half Rights upon death Surviving spouse takes ½ of community property Deceased spouse can do what he wants w/ separate property and ½ of community property *exception for FT special held w/ other W .Dower – W took LE in 1/3 H’s FSAs and FTs* .H took all W’s PERS prop REAL prop: . Marital Interests During marriage – what can creditors reach? COMMON LAW SYSTEM Before MWPA H’s creditors could reach H’s prop (W had none) After MWPA Group 1: creditor stands in H’s shoes. W got alimony After No-Fault Divorces H and W take their own separate property “Marital property” subject to equitable distribution Traditional CL System PERS prop: .W took ½ H’s prop if no issue. but not W’s Group 2: creditor stands in debtor spouse’s shoes Group 3: creditor can’t reach T by E property Group 4: creditor can reach either spouse’s ROS Before No-Fault Divorces Each took separate property.b. 1/3 if had issue .
that wasn’t used for crim activity. a woman ceased to be a legal person b. T by E tenant doesn’t have a separate interest for creditor to reach ii. not subject to H’s debts) e. H had jure uxoris: right of possession to all W’s lands. H’s creditors can reach H’s share of the T by E. HELD: H’s right of survivorship is forfeited. During Marriage a. gov’t brought civil forfeiture proceeding against H b/c illegally sold drugs out of his pharmacy (held in T by E). Common Law Marital Property System 1. Policy for Group 3 i. 1500 Lincoln Avenue. Federal Forfeiture Law i. gov’t sought to execute forfeiture judgment against H’s home (held in T by E). 2. a homestead exemption precludes creditors from reaching tools of the trade and a tenant’s homestead (capped at a certain amount) iv. Lee. ii. Family wealth protection: T by E prop is a financial nest egg that’s immune to creditors iii. W’s creditors cannot reach W’s share of T by E w/out H’s consent. Group 4: creditor can get either spouse’s right of survivorship only f. HELD: house unavailable for forfeiture. ii. Group 1 (empty group) 1. this right was alienable by H and reachable by H’s creditors d. In United States v. Effect of MWPA i. For T in C and JT. subject to the W’s right of survivorship. At marriage. Except for the W’s paraphernalia (clothes. Exception: T by E is not exempt from execution if the creditor is the IRS g. In United States v. Group 2: Creditor “steps in the shoes of the debtor” (gets present possession + right of survivorship) iii. Married Women’s Property Acts (MWPA) gave women legal control over her property (H couldn’t sell. . No cap for T by E v. ornaments). all personal property owned by the wife at the time of the marriage or acquired thereafter became the property of H. Group 3: creditor can’t reach any of the T by E property iv.i. c.
NY: career/celebrity status is marital property . ins.. H abandoned W. Termination of Marriage by Divorce a. levied on H’s interest in the dwelling and purchased it at execution sale. Spiller v. JD) are not marital property ii. unless ouster i. inheritance) 2. At common law. different from reimbursement alimony b/c gets share of value of the license d. MIN: reimbursement alimony: get pmts from educated spouse for cost of contribution to education (not value) iii. MAJ: professional degrees (e. pay? iii. a creditor of H. When house burned. Who does ins. Personal Property in T by E (p. ii. Some states: all prop acquired during marriage by whatever means (incl. Group 2 Example (p. Machareth rule: W doesn’t owe X rent. W generally doesn’t get alimony iv. earnings.h. H and W own their home as T by E. Example: Suppose that a JRD recognizes T by E only in real property. Equitable distribution of marital property (more like community property) b. co. X demanded from W onehalf the reasonable rental value. lifetime obligation by support. Some states: all property of both spouses ii. MBA. X. gift. “Property” subject to division i. 320. W would get alimony. 320. H and W owned home in NY as T by E. split up property. W refused. Some states allow T by E in personal property ii. n. 4) i. ii.g. and H dies five days later. No fault divorce was introduced iii. W loses right of survivorship 2. 3) i. Reduced if W’s at fault. n. Some states: only earnings during marriage iii. Others: Marital Property 1. Generally i. money becomes T in C. each owned separate property. Career and Celebrity Status i. upon divorce. Rehabilitative alimony: if W needs support for limited time to enter the job market and become self-sufficient c. Professional Degrees i. House burns down. Group 2: X “steps into H’s shoes” (gets present possession + right of survivorship) iii. NY: medical license is marital property.
Yes.” O dies. 2. Translation: H gets LE in all W’s FSAs and FTs as long as H and W have kids. but only if H & W had issue born alive and capable of inheriting. Goodwill i.ii. H is not protected from purchasers & creditors like W c. Translation: W gets LE in 1/3 of H’s FSAs and FTs (except FT special held w/ another W) b. husband had control so it’s his fault if he did anything bad to property. Dower – W gets LE in 1/3 of each parcel in which H was seised during marriage and which could be inheritable by W’s issue a. Common Law i. ½ if none 2. Problems (p. Counterarg: this double counts earnings if the ee remarries e. b. c. 336) 1. Termination of Marriage by Death of One Spouse a. survived by wife W. a. O conveys: “to A & B as JT w/ rt. of survivorship. Professional goodwill is marital property (even w/o contribution by other spouse) 3. W – takes 1/3 if there’s surviving issue. of survivorship. H – takes all W’s personal property ii. Professional goodwill: reputation that will probably generate future business ii. Real property 1. A . W wasn’t allowed to do anything w/her land. Attached at moment of marriage. Note: H can escape giving W land by holding it in JT w/ another (not inheritable) 2. NY Domestic Relations Law: contribution to career/potential career is considered iii. Purchasers/creditors take subject to W’s rights. Is W entitled to dower? a. W is entitled to LE in 1/3 prop.” A is married to W. O conveys to “A & B as JT w/ rt. iii. Personal Property (traditional view): 1. Curtesy – H gets LE in all of W’s land seized during marriage and inheritable by issue.
W doesn’t get dower. The Community Property System 1. profits. payable to W. iii. Is land subject to X’s dower rts? Yes. H could set up a corp. X has LE 1/3 prop (dower). H gets LE in all prop (curtesy). $60k personal prop 3. Separate Property – property that is not CP (prop acquired before marriage or during marriage by gift. descent) . policy. W gets: $60k life ins. Jurisdiction = ½ elective forced share of prop passing by will or intestacy. How is H’s estate distributed? 2. b. Spouses can take a share (usually ½ or 1/3) of all real & PERS property that decedent spouse owned at death. H & W buy house worth $60k as JT. but can elect to take through the will. to own Brownacre. Take the prop as LE w/ remainder to someone else. ii. b. C is married to X. if available. A dies. c. If B is married to H (husband) then B dies. Problem (p.conveys to C. (shares = personal property). JT that A & B held was converted to T in C btwn C & B. H owns stock in a corp. H takes out $60K life ins. of survivorship. devise. 3. Is land subject to W’s dower rts? No. 337) 1. He wants to be able to deal w/ the property after the purchase w/o any interference from W. & fruits of earnings. b/c T in C has no rt. D gets $60k personal property ii. Not inheritable. Spouse does not have to take forced share. then C dies. $60k JT in house. Introduction a. Devises everything to D. (d/n exist in marital property states) b. H desires to purchase Brownacre. b. H dies owning $120K in personalty.. so no dower. Community Property – earnings during marriage and the rents. The Modern Elective Share i. a. a.
Who owns the lot? 1. Problem (p. Transmutation – (MAJ) can change community prop to separate prop by mutual agreement 2. you have to sue trustee of estate. income earned from separate prop during marriage is CP (differs by JRD) d. Inception of Right: The character of property is determined at the time of acquisition. Time of Vesting: The character of property is determined when title vests. JT has right of survivorship c. When buys the lot. Three Approaches i. CP. Creditors can reach whoever is manager. 340) i. H withdraws the $5k and buys a lot. devising all his separate and CP to S. taking title in H and W as JT. H & W have equal managing powers. . it’s still CP 2. JT can be unilaterally severed into T in C iii. E. E. ii. The lot is CP. Spouses in CP state can sue each other. married to W saves $5k of his earnings and deposits in a savings acct in his name. H. After death. b.g. Community Property Compared with Common Law Concurrent Interests a. When H puts $5k in savings acct. JTs: any 2 ppl ii.g. if you paid off installment K after marriage. Duty of good faith.. JT is invalid b/c can’t convey CP unilaterally. Manager’s duty is that you are fiduciary for spouse. She got it. Management of Community Property a. that something else = community property i. W gets ½ and S gets ½ 3. In TX. Distinguish JTs and CP i. H dies. In CP you are joint managers & each spouse can handle the disposition. When H dies. Must hold T in C or JT as separate property b. Spouse is entitled to reimbursements of ½ pmts made by CP. 4. 3. Mixing Community Property with Separate Property a. Can agree to hold property as JT or T in C (CP JRDs don’t recognize T by E) i.c.. CP: for H and W only. Some states say you can make valid gift during lifetime of spouse but she can set them aside. H makes a lot of gift to all these women so W sues his estate for her share that he gave that was hers. Tracing principle – community property exchange for something else.
how much of 250k is due to appreciation in value? (e.. W entitled to reimbursement for ½ of $7k. b.5k). Five years after marriage the jewelry store is sold for $250k. 2. and he was paying out of CP. Therefore.5k. Time of Vesting: Ins. Suppose H took out the policy before marriage and $3k in premiums were paid before marriage and $7k in premiums were paid after marriage from community funds. W gets ½. Inception of Right: Acquired policy when unmarried. W gets $3. H purchases land for $20k. Pro Rata Sharing: 30% of policy was paid w/ separate property. S. using $5k of his separate funds as a down pmt and CP for the rest. S gets the rest ($32. Who is entitled to the proceeds? 1. Approach #1: whole thing is CP b/c $5k is considered a gift to the community. H sells the land for $40k. get reimbursed to extent person was compensated by taking out a paycheck . Title was taken in the name of H and W. At marriage to H it is worth $100k. policy vested when H died. S gets $25k. iii. 342-43) i. 2. S gets ½ ii. Problems (p. so it’s separate property. ¾ is CP iv.iii.5k). Approach #2: pro rata based on pmts: ¼ of it is separate property. what are other similar lands selling for?) The amount after appreciation is CP. Suppose W owns and operates a jewelry store before marriage. so it’s CP. Named beneficiary is H’s son. $15k is separate property. Who is entitled to the proceeds? 1.g. policy is CP. During marriage. W gets $25k. who is entitled to the $50k? 1. Appraoch 2: reimbursement model. S gets the rest ($46. $35k is CP. At H’s death who is entitled to the $50k? 1. At H’s death. paying premiums out of his earnings. 70% paid w/ CP. 2. 3. policy on his life. Ins. Pro Rata Sharing: Community payments “buy in” a pro rata share of title. W gets ½ of CP ($17.5k). During marriage H takes out $50k life ins. Approach 1: Look to it as a real prop asset.
TX doesn’t have an elective share statute. Once characterized.5. i. W doesn’t get anything. subsequent moves btwn CL and CP states are disregarded c. American Law Institute proposal: rights arise from conduct. After retirement. No notice req to end lease 4. a CP state. Real property: at death. Since there’s no elective share statute. Most states that recognize CL marriage req express K 4. Fixed period of time.. an elective share of one-half of H’s property.. W has. Leaseholds: The Law of Landlord and Tenant a. Can be terminable earlier (e. it’s separate property. Year-to-year or longer – six months notice. If the states were switched. terminates if credit score drops) 3. the character of property does not change character unless both parties consent.e. CL notice required for termination: i. Continues until notice to terminate a. e. w/ event that terminates the tenancy ii. to continue for successive periods (e. At death. year-to-year) 2. ii. at H’s death. not to exceed six months .g. law where land is located governs disposition. I. not from express promises per se IX. Period of less than a year – notice equal to the period of the lease. Term of Years 1. Under OH law. Note: Term of Years Determinable: term of years.. Rights of Domestic Partners 1. H dies leaving a will devising all his property to D. Marvin v. d. H accumulates personal property worth $500k. H and W move to TX. Marvin (CA): imply K from conduct 3. Personal property: at death. the prop is CP. Any fixed. Example: H and W live in OH (CL). Periodic Tenancy 1. law of decedent’s domicile governs disposition. The Leasehold Estates i. Migrating Couples a.g. What are W’s rights? i. ii. calculable amount of time 2. W gets ½ of CP + ½ of H’s share b/c of the forced elective share. CL marriage req’s: (1) intent to be H and W. month-to-month. iii. Property’s character is determined by spouses’ domicile when acquired b. Stays separate when move to TX. B/c prop acquired in OH. and (2) hold yourselves out to be H and W 2. Solution: promise to devise to W in will iii.
on hook for December iv. If lease was made w/ no fixed term “at annual rent of $24k payable $2k/mo. i. Generally . Problems (p. L relet the premises beginning 4/1/02. Tenancy is a term of years. Where a lease is for unspecified duration. 2. Statutory notice – thirty days notice. Tenancy at Sufferance 1. 5. If the lease had been “to T from year to year.g. Not month’s notice. a. imply that it is also terminable by the other. if no notice. Exists for an unspecified duration. What result? a. b. beginning October 1. liable for rent. This resembles a Life Estate Determinable. notice. What are LL’s rights? a.iii. Note: if we rejected the CL rule. notified L on 11/16/01 that she would vacate as of 11/30/01.”) v. 2. (e. Period = month tomonth or year to year.” the tenancy is a periodic tenancy. can’t terminate in mid-period. CL rule: If it’s terminable by only one. b. Most states req 30 days notice 4. 364) 1. L leases “to T for the duration of the war.. LL leases Whiteacre “to T for one year. Lease terminates on the last day of a period. T. but can be terminated at any time by either the landlord or tenant. T subsequently vacated on that date and paid no further rent to L. Numerous Clauses Principle a. c. but tenant alone has the right to terminate. no notice req’d. T moves out w/o giving L any notice. Where the landlord alone has the right to terminate. 3. beginning October 1. it’s a life tenancy terminable. Tenancy at Will 1. a month-to-month tenant. on the 1st of each mo. iii. Terminates at the death of either of the parties. the tenant would have a lease resembling a LE pur autrie vie c. the tenancy is a periodic tenancy. Req’s 6 mo. Sometimes where a tenancy isn’t a Term of Years or a Periodic Tenancy.” The following September 30. Rule is no longer valid b/c it’s based on livery of seisin and it goes against the weight of the parties. cts bring back the CL rule and imply a right to terminate in the tenant (making it a Tenancy at Will). b. it arbitrarily defaults to a Tenancy at Will.
The Lease i. Absent evidence to the contrary. he in effect agrees to an extension of the lease on a month-to-month basis.. ii. Smith d. you can’t change your mind. Inc. ct held no holdover b/c didn’t interfere w/ LL’s use of the premises. Tenancy at sufferance arises when a tenant remains in possession (holds over) after termination of the tenancy. i. E. or (2) length of the original term or period. When tenant holds over. in Crechale & Polles. same terms from original lease apply b. Other than length of period. the degree of control retained by granting party. Conveyance vs. c. Contract 1. a LL who accepts rent from his holdover tenant will be held to have consented to a renewal or extension of the leasing. ii. HELD: once LL elects eviction. but fails to pursue his remedy of ejecting the tenant. Generally. MAX length is 1 yr. b. presence/absence of incidental services. c. might excuse performance b. Most JRDs. Policy: compensate LL. Factors to determine if a lease exists: parties’ intention. then accepted rent pmt.g. and accepts monthly checks for rent due. Some JRDs convert holdover tenancy into a tenancy at will. where tenant vacated in timely fashion but left office equip. holding over gives rise to a periodic tenancy i. 2. tenant liable for the reasonable value of use and occupation. Inc. Holdover Terms a. # of restrictions on use. Historically. exclusivity of possession. If one side breaches. b. e. In Caserta v. Action for Bridgeport Community. Consent to the creation of a new tenancy. Some statutes provide that LLs may demand double rent from holdover tenants. or ii. Seek eviction. Leaving equipment. granting lease was conveyance of term of years 2. deter holdover tenants. protect the prospective new tenant. Crechale & Polles. Modern trend to treat as K .a. Once you make an election. LL first sought eviction. LL can: i. v. Length of the period based on (1) how rent is computed in the original lease. K law – agreement to provide space for rent a..
the burden shifts back to the P to show the proffered reason was pretextual. Note: if no facial discrimination. 42 USC § 1982 1.iii. FHA applies to private individuals who are selling/leasing property. Agreements to transfer interests in land subject to SOF (applies to leases for more than 1 yr) c. 2. color. . familial status. (c) Unlawful to publish ads that indicate preference/limitation/discrim based on protected class.” Black couple is denied b/c of race. sex. (b)(1) – FHA doesn’t apply to a seller/owner of single family house IF: i. and does not advertise c. this violation is exempted b/c Murphy falls under §3603(b)(2) exemption (owner lives in house). P need only prove discriminatory impact. 3631 1. Statute of Frauds. Applicability. Burden shifting. Race/Nat’l Origin Examples 1. Mrs. 42 USC § 3601-19. religion. as is enjoyed by white citizens thereof to inherit. When P shows D unlawfully discriminated. handicap 2. not discriminatory intent 6. Note: applies only to race and nat’l origin discrimination 3. Exemptions don’t apply to 3604(c) –discrim in advertising b. Seller doesn’t own more than 3 single family houses ii. All citizens of the US shall have the same right . and convey real and personal property. hold. Seller doesn’t hire a broker. (a) Unlawful to refuse to sell/rent on account of protected class. Fair Housing Act of 1968. a. 3. lease sell. She puts the following ad in a local newspaper: “For rent: Furnished basement apartment in private white home. Note: §3604(c) applies to sellers/owners and newspapers. P needs to prove discriminatory intent iii. . Under § 3604(a). nat’l origin. purchase. Exemptions (§3603(b)) a. If D does so. (b)(2) – FHA doesn’t apply to renting rooms/units if owner maintains/occupies one of such living quarters as his residence 5. . Seller occupies house before sale iii. Protected Classes (§3604). Nondiscrimination (§ 3604). FHA Analysis i. violates FHA (refusing to rent b/c of race). Leases and Discrimination i. ii. Note: besides showing discrimination. Murphy has an apt to rent. 4. the burden shifts to D to show a legitimate business purpose. Civil Rights Act of 1866. But. Race.
Handicap doesn’t incl. illegal use/addiction of controlled substance . Discrimination in terms/conditions.g. but denies family of one adult and 3 kids. Handicap = (1) physical or mental impairment which substantially limits one or more major life activities. No violation b/c Murphy falls under exemption in § 3603(b)(2). b.. a. No FHA violation where Owner limited occupancy to 4 ppl and denied family of H. Under § 3604(c). situation where Owner rents a 2-bedroom apartment to a family w/ H. b. FHA Analysis. iv. (2) record of having such an impairment. violates FHA (discrim in advertising). prohibits discrim based on sexual orientation. W.” a. HELD: FHA violation b/c discriminates against person in terms/conditions of rental (3604(b)) vi. §1982 Analysis i. it has discriminatory effect. Unmarried homosexual cohabitants. Several weeks into the tenancy. occupancy. Mrs. Murphy doesn’t place an ad. 3. German or Swedish. W and 3 kids. or (3) regarded as having such an impairment. FHA Analysis. not family discrimination b/c not a family b. b. and 2 kids. available only speakers of Polish. Discrimination Based on Handicap 1. §3603(b) exemptions don’t apply to §3604(c) violations. Murphy places ad: “furnished apartment basement in private home. Some state legislation – coverage is broader. 2. but refuses to rent to a German b/c of his race. may also give right to unmarried heterosexual cohabitants v. Violates §1982 b/c discrimination on basis of race 2. Seller/Owner can discriminate on basis of family status if he shows a legitimate business purpose. Family Status 1. Refusal to rent to 2 heterosexual cohabitants. Although not facially discriminatory (b/c anybody can speak those languages). Mrs. 2. Discrimination Based on Sex 1. a. Compare. E. LL started harassing Tenant demanding sexual favors. §1982 Analysis. Violation b/c discrim in leasing on basis of nat’l origin. Nat’l origin discrimination. Cohabitants a. discrim based on sexual orientation – not covered by statute i.ii.
Tenant has mental condition that is lessened by companion dog. Rationale a. Remedies a. LL makes an implied covenant that tenant will be able to take physical possession. that is. LL is much more likely to know the relevant facts (is there a tenant in the space now. How to you make reasonable accommodations? Hold classes to educate fearful tenants? c. LL would probably be a trial witness) c. Discrim on basis of handicap (“regarded as” handicapped) b. there is an implied covenant that the LL assures the tenant the legal right of possession. 2. pro-rate rent . etc. LL approached by gay couple. Where the lease is silent. If possible to allow pets in building.). ii. The rule is most likely in accord w/ parties’ intent/expectations 3. 2. Discrimination incl. Efficiency. LL refuses tenant to have dog. Examples a. The tenant could demand or the LL could provide that the LL has the duty to ouster holdovers. tenant can’t win against LL if can’t access a land-locked parcel. not making reasonable accommodations to afford handicapped persons equal opportunity to use/enjoy a dwelling 4. Therefore. likelihood he will holdover. Delivery of Possession i.3. If holdover is partially occupying: i. he’s probably a frequent player in ouster suits b. Note: in all JRDs. Who has the duty to deliver physical possession by ousting a holdover tenant? 1. Evicts mentally ill tenant b/c threatening i. LL’s Knowledge. Take possession of the remainder. LL can most cheaply litigate the case b/c of his knowledge (if tenant sued. English Rule 1. not access. Express Covenant Available. Where LL breached the implied covenant. doesn’t rent for fear of AIDS i. i. at the beginning of the term there shall be no legal obstacle to the tenant’s right of possession. Note: the Q is whether the LL has a duty to provide physical possession. Delay occupancy until holdover is evicted. new tenant can terminate the lease and sue for out-ofpocket damages b. pay rent pro-rata ii. have to accommodate d.
Words such as “sublet” and “assign” are not dispositive in determining the nature of the lease. T2 – no privity Sublettor (T2) is not liable to LL Assignee (T2) is liable to LL 1. Tenant is most interested in ouster. 2. iii. E. If breach by original tenant. T1 – privity of K. If the instrument purports to transfer the lessee’s estate for less than the entire term. LL generally not responsible for a wrong to a 3d party e. then rts of sublesee/assignee remains intact b. American Rule 1. b. T1 – privity of K estate LL v. If the instrument purports to transfer the lessee’s estate for the entire remainder of his term it is an assignment. This is a partial assignment. T2 – privity of estate LL v. 3. If surrendered by tenant. Rationale a. ii. (MIN: sublease) 2. Subleases and Assignments i.. CL Distinction. Determining Sublease or Assignment 1. Proceed against holdover tenant iii. In sublease or assignment.g. i. not the amount of land.g. LL entitled to possession (can evict T2) ii.c. T1 transfers 5 of 20 acres for the rest of the term. 2. Where the lease is silent. there is no implied covenant that tenant will be able to take physical possession. “Entire term” goes to the length of the lease. privity of LL v. Still partial assignment. New tenant must proceed against the holdover. if the primary lease btwn LL and T1 is prematurely terminated: a. Nature of Subleases and Assignments SUBLEASE ASSIGNMENT LL LL | | T1 T1T2 (“fills the shoes of T1”) | T2 T1 grants part of his estate T1 conveys his entire estate LL v. Modern Rule. regardless of its form or the parties’ intention. Ascertain the intention of the parties. E. it is a sublease. Liability to LL . T1 transfers 5 of 20 acres. Assignments a. but reserves the power of termination. regardless of its form or of the parties’ intention.. Language not dispositive.
who agrees in the instrument of assignment to “assume all the covenants in the lease” btwn L and T. iv. E. T1 subleases to T2 for 1 yr. a. LL is a 3PB to the K and can sue T2 on a 3PB theory. T1 assigns his entire interest to T2. T2 is liable to LL if: a. E.. T1: yes – LL is 3PB LL v. 2. ii. Minority Rule: Lessor may not refuse to approve a proposed assignee unless he has a commercially reasonable objection to the assignment i. T2 defaults.1. T3 defaults on rent and fails to keep the premises in good repair. In the instrument of transfer there was a promise where T2 “agreed to pay the rents” reserved in the head lease. Arbitrary Disapproval a. T2 has an assignment. Approval Clause.g. T1 transfers to T2 for the balance of the term. T covenants to pay rent and keep the premises in good repair. Liability? DIAGRAM LIABILITY LL LL v. The rule can be K’ed out of. Majority Rule: Lessor may arbitrarily refuse to approve proposed assignee b. 1. b. Provision that states T1 may not sublease/assign to T2 w/o LL’s consent. Example. This only serves as a default rule where the lease/assignment is silent. LL leases to T1 a term of 3 years. K btwn T2 and T1 results in LL being a 3d party beneficiary. T2 assigns his entire interest to T3. “Commercially Reasonable” 1. The obligations and liabilities of a lessee to a lessor under the express covenants of a lease. T assigns her entire interest to T1. T2: no TT1*T2T3 *T1 assumes all covenants in LL v. T: yes – privity of K | LL v. iii. are not in anywise affected by an assignment or a subletting to a 3d party. Approval clauses are for the protection of LL in ownership and operation of a particular property. LL lease to T for a term of 3 yrs. in the absence of an agreement/action that amounts to a waiver. LL can sue T1 for the rent due. i. LL leases to T1 for 3 yrs. This rule only applies to commercial leases.g. T1 Still “On the Hook”. not for its general economic protection . Although privity of K is btwn T1 and T2.. T3: yes – privity of estate lease v. T2 is liable to LL b/c he has privity of estate.
This is a default rule and can be K’ed out of f. convenience or sensibility is not commercially reasonable 2. it’s a mandatory rule. Narrow construction of “peaceable. b. The Tenant in Possession 1. 2. Modern rule (MAJ): LL has a duty to mitigate damages when tenant abandons possession of the premises i. In a series of assignments. a. Extent of Duty to Mitigate . Policy: efficiency.” LL’s means of reentry are non-peaceable when possession is adversely held. Summary eviction procedures. Defaulting Tenants i. LL would then have the option to terminate the lease w/ T1 and enter into a new lease w/ T2. Denying consent solely on the basis of personal taste. ii. Terminate and Recapture Clause. CL Rule: LL may rightfully use self-help to retake leased premises from a tenant in possession w/o incurring liability for wrongful eviction provided: (1) the LL is legally entitled to possession. efficient means to recover possession after termination of a tenancy. he waives any objection to future assignments. 3. Duty to Mitigate a. range of issues subject to litigation is kept narrow. CL rule (MIN): LL has no duty to mitigate damages when tenant abandons possession of the premises. 3. Rule in Dumpor’s Case. In some JRDs. Otherwise. Where JRD bans self-help. Reqs only few days’ notice to the tenant. Provision where T1 would give notice to LL before subleasing/assigning to T2. a. The Tenant Who has Abandoned Possession 1. more likely equal bargaining power in commercial lease. Quick. if LL consents to the first assignment. the prohibition on self-help applies only to residential leases. a. Modern trend: Self-help is never available to dispossess a tenant in possession who hasn’t abandoned or voluntarily surrendered the premises. and can’t be K’ed out of b.2. LL has to resort to the cts in an action for eviction. and (2) the LL’s means of reentry are peaceable. Put the duty of filling the premises on the LL b/c it’s cheaper for him and he’s more experienced in filling spaces. c. Residential tenant suffers a greater psychological impact.
can’t evict tenant and then demand FMV c. Terminate lease. Assumptions: This assumed leases for agricultural purposes (care more about farmland than housing). tenant liable for excess. Security Deposits i. d. doesn’t terminate lease. Action for breach: not keeping in good repair iii. can’t comingle deposit w/ personal monies g. that ends the lease and no further rent is due iii. If tenant remains in possession and K rate < FMV. Pay upfront an amount (1-2 mo. Landlord’s Duties. offering to show the space. Treat LL as a trustee. Must make reasonable efforts to fill the space. Tenant’s Rights and Remedies 1. If tenant abandons. no liab for rent. he’s liable for unpaid rent ii. Abandonment i. 2. LL has to pay interest on amount 3. Limit the amount 2.i. If tenant abandons and LL relets: Go by intent of LL. if LL accepts. If there are several vacancies. and Remedies (Esp. LL’s Remedies i. ii. Duties. T liable for unpaid rent subject to duty to mitigate ii. Surrender: tenant offers to terminate the lease. If LL wanted to terminate the lease agreement. If LL doesn’t mitigate: i. incl. etc. One way to surrender is to abandon the property. LL accepts 1. Sue for unpaid rent ii. Surrender vs. Regarding the Condition of Leased Premises) i. Abandonment: tenant vacates w/ no intention of paying. If LL was just mitigating. T takes prop as is a. Recovering Diff btwn Stated Rent and FMV i. evict tenant b. MAJ: LL gets what the tenant owes minus damages he could have mitigated ii. MIN: absolves tenant of all rent e. Statutory reforms: 1. advertising in local newspapers. Rights. rent) as against damages that may occur ii. . CL: LL had limited obligations (caveat lessee). the LL has to treat the abandoned premises as part of the vacant stock. Subject to abuse iii. LL’s Remedies and Security Devices a.
Actual eviction of part of premises relieves the obligation to pay any/all rent 2. Exception: an implied covenant of quiet enjoyment that the LL will not wrongfully interfere w/ the tenant’s possession of the premises was interdependent w/ the promise to pay rent 1. regular rain causing flooding was substantial interference. most ppl living on the farm would be able make repairs to the house. Abatement of nuisance on property 5. Partial Eviction 1. Constructive Eviction i. lease covenants were independent of each other. In short term lease of furnished dwellings. 429-30) i. Common Law i. Covenant expanded to incl. ii.Also. iv. Tenant Remedies i. Exceptions: Implied Duties 1. Duty to disclose latent (hidden) defects 3. Duty to maintain common areas 4. duty to make repairs b. Quiet Enjoyment and Constructive Eviction a. L fails to control excessive noise made by neighboring tenants of T who commonly party . implied duty to make and keep premises habitable 2. Act/omission = breach of ICQE or of CL implied duties iii. At CL. Renders premises unsuitable for rental purpose 2. Cooper. Any act or omission of LL which renders the premises substantially unsuitable for the purpose for which they are leased or which seriously interferes w/ the beneficial enjoyment of the premises ii. Tenant can abandon premises ii. 2. Tenant can stay in possession and sue for damages equal to the difference btwn the value of the property w/ and w/o the breach d. Problems (p. If makes promise to make repairs. Constructive partial eviction results in a pro-rata rent reduction c. Substantial Interference 1. beneficial use/enjoyment of property iii. In Reste Realty Corp v.
clean and fit for human habitation i. reformation) ii. Limited to residential leases iv. ii. L installs deadbolt locks on all entrance doors and hires private security. Not important today b/c of implied warranty of habitability 3. LL has burden to show premises don’t breach warranty of habitability iii. iii. Remain in Possession and “Repair and Deduct” 1. Repair defects and deduct from rent pmts iv. Refer to housing codes 2. Hilder rule: damages = FMV as warranted – FMV as exists . for rent ii.long and loud into the night. If at time lease is entered into. lease is voidable b/c illegal. harassing customers. If partial breach. Remain in Possession and Sue for Damages 1. T performs abortions. Basic K remedies (damages. HELD: breach of covenant of quiet enjoyment e. Illegal Leases i. Remain in Possession and Withhold Rent 1. Apt building is site of criminal activity (burglary and vandalism by 3d parties). LL does nothing about protestors outside the building and in the lobby. Is the defect in “essential facilities”? 3. may withhold all rent and ct will determine partial back rent owed iii. HELD: constructive eviction. but problems continue. Does the defect impact T’s health/safety? ii. can’t be waived by lease provision b. T can’t assume the risk. Remedies i. Standard: premises must be safe. but discharged it by making reasonable efforts. HELD: LL had duty. Objective test: reasonable person find premises uninhabitable? 1. Breach of IWOH is defense to summary eviction and action to collect back rent 2. Non-waivable: covers latent and patent defects. rescission. T can escape liab. The Implied Warranty of Habitability a. housing code violations.
despite the statute. T holds over. swimming pool. Kline formula: a. FMV as warranted? 2. Problems (p. Agreed rent: $50 b. e. T’s lease in fancy apt building provides for: door attendant. FMV as exists: $50? If so. elevator. Trash piles up to the height of the buildings first-floor windows. iii. L’s janitorial staff goes on strike for 2 wks. HELD: no breach of habitability. narrow riding trail and falls on her. safe and health. MAJ: no LL liability for tenant/3d party unless falls under CL implied duties. knowing T intends to use the land to board and rent horses and to operate a riding trail. and T’s customer is injured when her horse slips on a soft. L offers run-down house for $100/mo. no damages Retaliatory Eviction i.” L agrees to lease for $50/mo. gym. Most states prohibit eviction for good faith complaint by tenant ii. Kline rule: damages = agreed rent – FMV as exists v. etc. Terminate Lease and Sue for Damages Discomforture/annoyance damages are available. Problems 1. If termination w/in X mo. HELD: no waiver of implied warranty of habitability (nonwaivable). T doesn’t pay rent. and in accord w/ “the uses reasonably intended by the parties. Hilder formula: FMV as exists = $50. T finds a lot of defects and says “it’s worth $50/mo. HELD: L breached implied warranty of habitability (strict liability) ii. . T still can sue for damages. Defense to eviction suit is to reduce rent by appropriate amount: 1. If 3d party’s injured on premises: 1. f. d.c. MIN – duty under neg ii. or expressly warranted 2. burden shifts to LL to show legit purpose LL’s Tort Liability i. Statute req’s that dwellings be fit for habitation.. presumed to be w/in retaliation. 2.” The pool breaks. 439) i. L leases land to T for one yr.
as is its permanence. wrong result.) 2. Exculpatory clauses invalid in most JRDs ii. 3. HELD: LL liable – implied duty to keep safe common areas.HELD: LL liable b/c implied duty to repair conditions at the outset of the term. T knows more about farms. Degree of effect on the use and value of the leased premises is relevant. Some JRDs: no duty to prevent 3d party activity. may be liability if notice iii. Affirmative waste (e. T’s son gets injured from an auger. bad remodeling) i. a. Duty of repair: on tenant as to routine things ii. Tenant’s Duties. Landlord’s Rights and Remedies 1. T’s daughter injured on the street. 5. so too should be the length of the term remaining at the time the tenant makes the changes in Q b. (Prob. HELD: LL not liable b/c of inherent danger of being on a farm. T’s daughter badly injured when struck by boys racing their bikes on a parking lot owned by LL and used by tenants.g. Law of Waste a. Permissive waste i. 4. HELD: duty to keep common areas safe. L lease farm. Tenants attacked/injured in parking lot owned by LL. Limited b/c implied warranty of habitability . HELD: LL not liable.. off LL’s property.
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