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Property
study guide

Fall 2023 Edition

Image by Cederic Vandenberghe

conquest

Rules for first Possession

  • First Possession: First in time, first in right

  • Conquest: Might makes right

Possession

Possession

  • Intent to possess

  • AND exclusive dominion and control

Actual Possession

  • Direct physical control or custody

Constructive Possession

  • Having a right to custody or control, even absent physical custody or control. (A legal fiction)

chain of title

  • The series of conveyances, or other forms of alienation, affecting a particular parcel of land, arranged consecutively, from the government or original source of title down to the present holder, each of the instruments included being called a “link.” 

relativity of title

  • One's title or ownership over property is only recognized as superior to certain people, rather than being absolute against the whole world.

measuring relativity

  1. Identify the original grantor(s) of title

  2. Identify each grantee asserting title

  3. Trace each chain in title back to the original grantor

  4. Determine the earliest recognized transfer of title

  5. Result:

    • The earliest grantee prevails over the weaker, junior title

    • The junior title prevails over inferior claims

  6. Unless:

    • An exception applies

rules for capture

  1. Ferae naturae

  2. Usages and Customs

  3. Ratione Soil

  4. Local and Federal Regulations

ferae naturae (wild animals)

  • Pursuit: mere pursuit is insufficient

  • Trap or net: constructive possession

  • Mortally Wounded: constructive possession

  • Escape: results in loss of title unless the animal periodically returns, or it is branded and the owner uses all effort to recapture

usages and customs

  • Look to the usages and customs of the locals in trade and their personal dealings

Ratione soil

  • Landowner is in constructive possession of any wild animals on the land

accessions

Was there a mixing of value?

  • Was labor, materials, or both added?

  • Can the addition be separated?

Was the trespass innocent or intentional?

  • Innocent: true owner can sue for conversion or replevin

    • Unless:

      • Complete change or great increase in value

      • Addition can be separated

  • Intentional: true owner can sue for conversion or replevin

    • Amount of change irrelevant

    • Generally, trespassers and thieves acquire nothing

increase

  • The offspring or increase of tame or domestic animals belongs to the owner of the female

  • The increase of the increase belongs to the owner of the original stock

the commons

  • Cultural and natural resources that belong to the public

the tragedy of the commons

  • Resources held in common can incentivize a race to exploit the resources, often leading to social, economic, and environmental externalities​.

  • Negative externalities: pollution, overfishing, littering

  • Positive externalities: free-riders

oil and gas

  • First possession vests title: apply first in time, first in right

  • There are separate rules for determining who gets to capture the resource (more in a later class)

  • Subject to federal and state regulations

watercourses

  • Surface waters: rivers, streams, creeks, lakes, etc.

  • Generally: Natural trumps artificial uses (e.g. Household consumption trumps Industrial)

  • Riparian (Eastern states): water belongs to the landowners adjacent to the water. May not materially dimmish quantity, quality, or velocity.

  • Prior appropriation (Western states): first in time, first in right

ground water

  • Underground water

  • English rule: first possession of water owns it

  • American rule: reasonable use

  • Statutory allocation: e.g., the Colorado Water Compact 

capture

bundle of rights

  • Exclusion

    • Most essential stick in the bundle of rights. Kaiser Aetna

    • "[T]hat sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other." Blackstone

  • Transfer

  • Destroy

  • Control

  • Enjoyment/Exploitation

trespass

  • An unprivileged encroachment on land or a chattel

  • Without the owner’s consent

  • Lack of necessity

  • AND Not otherwise justified by public policy

Trespass & Necessity

  • Balancing test: "“Necessity exonerates one who commits a crime under the pressure of the circumstances if the harm would have resulted from compliance with the law. . . exceeds the harm actually required from defendant’s violation

  • Requires:

    • Clear and imminent danger outweighs other potential harm;

    • Reasonable expectation of abatement;

    • No legal alternatives;

    • AND Legislature has not precluded the defense

Trespass & Public Policy

  • Protect the integrity of the Legal System

  • Maintain owner's confidence in their rights and the law

  • Avoid self help measures (which lead to conflict)

  • The Sovereign cannot criminalize a person's homelessness, but can place reasonable restrictions on and punish invasions of others right to exclude

Trespass Damages

  1. Actual damages

  2. Nominal damages

  3. Punitive damages

    • Note: If the defendant has caused no compensable harm, public policy demands more than a nominal remedy to discourage future trespassing

The Takings Clause

  • U.S. Const. Amend. V: “[N]or shall private property be taken for public use, without just compensation.”

  • Note:

    • All Government regulation results in an adjustment or reallocation of rights.

    • These adjustments curtail use or economic exploitation.

    • Government could not function if it paid value for every adjustment.

    • So the denial of one strand of the bundle of rights is not a destruction of property amounting to Taking. Nor is there an abstract or fixed point at which something becomes a Taking. Factual inquiry. 

Dead-hand control

  • The Common Law has a natural hostility toward dead-hand control of property rights. Dead-hand control occurs when a decedent uses a devisement of property to control their beneficiaries after they are dead. (Why should the living suffer the whims and capriciousness of the dead?)

  • While the Sovereign can permit inheritance rights, it is not required to do so. A Sovereign may abolish the right or otherwise regulate, tax, or place limitations on it.

  • Dead-hand control can lead to waste of property. Nearly all jurisdictions favor putting land to its productive purposes when balancing the wishes of the dead against those of the living.

public trust

  • Certain cultural and natural resources held in the commons belong to the public. Those resources are held from time immemorial in the Public Trust and protect the right of the public to use and enjoy the public commons.

  • The Public Trust doctrine creates an easement for the public’s benefit and enjoyment.

  • Beaches and navigable waters are part of the Public Trust.

    • The land underwater and comprising the foreshore (wet sand) is held in the public trust.

    • Private landowners can (where permitted) own portions of the backshore (dry sand).

    • That ownership is curtailed by the public's right of access to the backshore. Private land owners cannot work together to exclude all access to the Public Trust.

    • Water that is not navigable can be privately owned. If the owner connects the private body of water to navigable water, they forfeit that land to the Public Trust.

  • Erosion & Private Land

    • Private landowners lose title to land that erodes into the ocean or other navigable waters.

    • In most jurisdictions, the Sovereign may but is not required to restore title if the eroded beach is later restored. 

ownership

intangible 
property

Intangibles & public policy

Tangible property: rivalrous and excludable

  • Real property (land)

  • Personal property (chattels)

Intangible property: non-rivalrous and non-excludable

  • The Commons

  • Public goods

  • Intellectual property

Solving externalities

  • Tangible property: property rights exist to police or limit overuse or misuse of property held in the commons (e.g. pollution, resource depletion)

  • Intangible property:  intellectual property rights exist to police or limit free-riding on the efforts of others, which leads to reduced innovation (e.g. piracy) and incentivize the creation of 

Hot news doctrine

(A form of unfair competition)

  • News-gathering or collection process involves significant expenditures;

  • Collected news or information is time-sensitive;

  • Defendant free-rides on the collected material;

  • Free-riding directly competes with original;

  • AND Free-riding is likely to diminish incentives to collect news

Right of publicity

  • One uses another person's name or likeness;

  • Without their consent; 

  • For their own benefit or the benefit of a third party

  • AND Injury

posthumous rights of publicity

  • Many jurisdictions extend the right of publicity after death so that a famous celebrities family can receive an ongoing financial benefit. 

  • The typical term is 20-100 years depending on the state.

  • Florida: 40 years after death

conversion

  1. Wrongful exercise of dominion and control (ownership) over the personal property of another;

  2. Intent to exercise exclusive dominion and control;

  3. AND Damages

market inalienability

  1. Legal proscription from the Sovereign making a market transaction per se unlawful.

  2. Examples: slavery, child labor, human trafficking, prostitution, illicit drugs, or trafficking in endangered species.

patents

Public Policies

  • Patents are a grant of a limited durational monopoly in exchange for public disclosure.

  • The monopoly incentivizes innovation, as without the monopoly:

    • Inventorship would be discouraged by free-riding;

    • The inventor could not exploit the first mover advantage of the idea.

  • This is counterbalanced by:

    • Full disclosure to the public

    • Limitations on the types of ideas that may be taken from the public domain (the commons)

the progress clause

U.S. Const. Art I, §8, cl. 8 – (“the Progress Clause”)

  • The Congress shall have the power. . .

  • To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries

Note: Congress has preempted State Patents.

patentability

  • Patentability: is it protectable patent subject matter? §101

  • Utility: does it offer some benefit to humans? §101

  • Novelty: is it not found in the prior art? §102

  • Nonobviousness: is it enough of an advancement? §103

  • AND Enablement: do the written disclosures allow the person having ordinary skill in the art (the “PHOSITA”) to reduce the patent to practice?

patent subject matter

35 U.S.C. §101 (“the Patent Act”)

  • Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor. . .

    • Manufacture:  “The production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations...”

    • Composition of matter: “All compositions of two or more substances and all composite articles, whether they be the result of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids.”

 

Congress intended patentable subject matter to "include anything under the sun that is made by man." Diamond v. Chakrabarty

copyrights

Public Policies

  • Utilitarian

    • Copyrights are a grant of a limited duration monopoly designed to incentivize the creation and distribution of expressive works. (U.S.)

  • Personality

    • Creation is an extension of the author’s being. Creates moral rights. (E.U.)

  • Labor Theory/"sweat of the brow"

    • An artist mixes their mental labors into their creation, creating a property right. Rejected in Feist Publications, Inc. v. Rural Te. Serv. Co., 499 U.S. 340 (1991) ("the 1976 revisions to the Copyright Act leave no doubt that originality, not "sweat of the brow," is the touchstone of copyright protection. . . .").

the progress clause

U.S. Const. Art I, §8, cl. 8 – (“the Progress Clause”)

  • The Congress shall have the power. . .

  • To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries

Note: Congress has almost entirely preempted State Copyrights. (There are limited exceptions existing outside the scope of this course).

copyrightability

  • Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. 

idea-expression dichotomy

17 U.S.C. 102(b) 

  • In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

orginality

  • Independent creation of a human author;

  • A modicum of creativity sufficient; novelty not required.

works of authorship

17 U.S.C. §102​

  1. literary works;

  2. musical works, including any accompanying words;

  3. dramatic works, including any accompanying music;

  4. pantomimes and choreographic works;

  5. pictorial, graphic, and sculptural works;

  6. motion pictures and other audiovisual works;

  7. sound recordings; 

  8. AND architectural works.

Fixation

17 U.S.C. §101

A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. . . 

copyright infringement

  • Valid copyright

  • Defendant copied the work

  • Copying was an improper appropriation

  • Either:

    • Actual copying

    • OR Access

      • AND Substantial similarity

fair use

•    Purpose and Character;

•    Nature;

•    Substantiality of use in relation to the work as a whole;

•    AND Marketplace displacement

trademarks

Public Policies

  • Brands and branding, which trademark law protects, are an ancient commercial practice.

  • Trademarks protect against a form of fraud called consumer source confusion. This fraud creates economic deadweight losses. So trademarks attempt to stop the fraud from happening. 

  • Trademarks also help enforce standards of fair dealing and commercial morality.

  • Like Copyrights, Trademarks favor protecting the public, over enriching the right holder.

the commerce clause

U.S. Const. Art. I, §8, π3

The Congress shall have the power…

 

To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;

Note: No federal preemption. States maintain statutory trademark protection and common law trademarks exist.

trademark subject-matter

15 U.S.C. §1127

  • The term “trademark” includes any word, name, symbol, or device, or any combination thereof—

    • (1) used by a person, or

    • (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter,

  • to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.

Trademarkability

  • Distinctiveness

  • Non-functionality

  • AND Seniority of Use (first in time, first in right).

Measuring Trademark Strength

Protectable

  • Fanciful: wholly invented word

  • Arbitrary: meaning has no relationship to the thing

  • Suggestive: suggests a feature of the thing

  • Descriptive (w/ distinctiveness/secondary meaning): describes a characteristic, quality, or feature of the thing

 

Not protectable

  • Descriptive (w/o distinctiveness/secondary meaning)

  • Generic: the name of the thing

immoral & scandalous marks

15 U.S.C. 1052(a)

  • No trademark [shall register if it]:

  • (a) Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute. . . 

Held unconstitutional on First Amendment Grounds. Matel v. Tam, 582 U.S. ____ (2017)

finders

finders

Possession

  • Intent to possess

  • AND exclusive dominion and control

Actual Possession

  • Direct physical control or custody

Constructive Possession

  • Having the right of control, even absent physical custody or control. (A legal fiction).

bailments

Bailment: transfer of possession but not title (ownership)

  • Bailor: person who delivers the chattel

  • Bailee: person who receives the chattel

  • Voluntary Bailment: consensual delivery to bailee

  • Involuntary Bailment: nonconsensual delivery to bailee

Remedies for damage to chattel during bailment

  • Gratuitous bailee: bailee is sole beneficiary and liable for gross negligence

    • Example:​ a free valet service

  • Bilateral bailment: bailee is liable for negligence

    • Example: a paid valet service​

  • Bailment favors bailee: bailee liable for ‘slight negligence’

    • Example: A library lends a book to a patron)

finders

Lost Property

  • Owner has accidentally and involuntarily parted with possession;

  • AND Does not know where to find it

 

Mislaid Property

  • Owner has intentionally placed the property aside;

  • AND Forgotten about it

 

Abandoned Property

  • Owner has voluntarily relinquished ownership;

  • AND Had an intent to give up both title and possession

finders - public policy

  • Return the lost item to the true owner

  • Carry out the expectations of the parties

  • Reward honesty

title in lost v. mislaid property

English courts

  • No distinction

American courts

  • Mislaid property: usually goes to the owner of the locus in quo

  • Lost property: usually goes to the finder

    • Embedded in soil: owner of the locus in quo

    • Lying on the surface: finder

title in treasure troves

Treasure troves

  • Gold, silver, or currency that was lost in the distant past

 

English rule

  • Crown owns it (It's good to be the King)

 

American rule

  • Finder or owner of locus in quo takes (if finder is a trespasser)

  • UNLESS, abrogated by statute (e.g. many states have a shipwreck law [Note 6])

example statute: reporting found property

Fla. Stat. §705.102 Reporting lost or abandoned property.—

 

(1) Whenever any person finds any lost or abandoned property, such person shall report the description and location of the property to a law enforcement officer.

 

(2) The law enforcement officer taking the report shall ascertain whether the person reporting the property wishes to make a claim to it if the rightful owner cannot be identified or located. If the person does wish to make such claim, he or she shall deposit with the law enforcement agency a reasonable sum sufficient to cover the agency’s cost for transportation, storage, and publication of notice. This sum shall be reimbursed to the finder by the rightful owner should he or she identify and reclaim the property.

(3) It is unlawful for any person who finds any lost or abandoned property to appropriate the same to his or her own use or to refuse to deliver the same when required.

 

(4) Any person who unlawfully appropriates such lost or abandoned property to his or her own use or refuses to deliver such property when required commits theft. . . 

adverse
possession

adverse possession - public policy

  • Avoid stale claims

  • Quiet titles/correct title errors

  • Protect personal attachments

  • Utilitarian maximization of productive uses of resources

  • Maximization of tax revenues to the Sovereign

adverse possession

  • Open, Visible and Notorious 

  • Actual

  • Exclusive

  • Hostile and Under a Claim of Title or Right

  • AND Continuous for the Statutory Period

hostility

The objective standard

State of mind is irrelevant

 

Good-faith standard

“I thought I owned it”

Aggressive trespasser standard

“I thought I didn’t own it, but I intended to make it mine.”

 Remember: mere possession is insufficent

hostility - invisible possession

Ad coelum (Cuius est solum, eius est usque ad coelum et ad inferos)

Common law: One who own’s land owns “up to the heavens and down to hell”

Modern: curtailed by airspace and mineral rights

 

Examples:

Inaccessible cave system, no hostility Marengo

Low flying aircraft, hostility Causby

Drone regulations

color of title

Color of Title

Claim is based on:

A written instrument (i.e. a will or deed)

OR A judgment or decree that is defective and invalid

 

Approaches

Majority rule: color of title is irrelevant for adverse possession

Minority rule: color of title is required

Minority rule & FL: claims lacking color of title require additional steps, like paying taxes, filing a notice with the county, and/or making improvements to the land

mistaken boundaries

Objective Standard

Possession is hostile so long as the possessor intends to claim the land as her own, even if the possessor is unsure as to the location of the boundary. Connecticut View

 

Subjective Standard

The possessor must actually know that she has crossed over the boundary. Maine View

mistaken improvers

Mistaken Improvers

Common law: anything built on the wrong land becomes property of the true owner

Modern

Expensive improvement: forced conveyance of land from the owner to the improver or allow the true owner to buy out the improvement

De minimus improvement: remedy may be denied

Bad faith Improver

Anything built on the wrong land becomes property of the true owner.

Agreed boundaries, acquiescence, and estoppel

  • If there is uncertainty as to the location of the true boundary lines, if the parties make an oral agreement and then act as if that is the true boundary, the doctrine of estoppel will bar repudiation of the agreement if the other acts in determinantal reliance on that agreement.

continuous - tacking

Tacking

  • Allows the immediate grantee to ‘tack on’ to the period of possession of their predecessors in possession

American Approach

  • Permitted if the initial adverse possessor and successors are in privity of estate.

English Approach

  • Privity of estate not required.

 

Privity of Estate

  • Voluntary transfer of an estate or possession from one occupant to the other.

Seasonal Use

  • Tacking for seasonal use is permitted if that is the best use of the property. (e.g., a summer home need not be occupied year round)

continuous - legal disabilities

Tolling, Tacking & Disability

  • Legal disability includes: childhood, incompetency, and imprisonment.

  • Disability must exist at time of entrance.

  • If the owner has more than one disability, apply the longest lasting one.

Result

  • Majority Approach: extend the time to bring the action after the disability is removed.

adverse possession - government

Common Law/Majority Approach

  • No time runs against the king (nullum tempus occurrit regi)

Minority Approaches

  • Same as private land

  • Longer continuous period required

  • Only applies to proprietary holdings (income rights)

stolen personal property

Approaches to stolen chattels:

  • Conversion Rule

    • Action accrues at the time of the theft or conversion

  • Adverse Possession

  • Discovery Rule

    • Action accrues when the true owner discovers, or by exercise or reasonable due diligence should have discovered, facts which form the cause of action.

  • Demand Rule

    • Action accrues when the true owner demands return.

stolen personal property - void title

  • If a person acquires possession of a good where the true owner did not intend to transfer title to the good, then the possessor acquires no title to that good and cannot transfer good title to it to anyone else.

  • Title that was void in the transferor’s hands is void in the transferee’s hands as well. 

  • Remember: A thief cannot convey good title.

stolen personal property - voidable title

  • Voidable title is a defective title. It is a title that, although the true owner can rescind, becomes good title if transferred to a good-faith purchaser for value.

  • Examples include title received from fraud or fraudulent misrepresentations.

stolen personal property - entrusting

UCC § 2-403. Power to Transfer; Good Faith Purchase of Goods; “Entrusting.”

(1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased. A person with voidable title has power to transfer a good title to a good faith purchaser for value. When goods have been delivered under a transaction of purchase the purchaser has such power even though:

 

(a) the transferor was deceived as to the identity of the purchaser, or

(b) the delivery was in exchange for a check which was later dishonored, or

(c) it was agreed that the transaction was to be a “cash sale,” or

(d) the delivery was procured through fraud punishable as larcenous under the criminal law.

(2) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in the ordinary course of business.

(3) “Entrusting” includes any delivery and any acquiescence in retention of possession regardless of any condition expressed between the parties to the delivery or acquiescence and regardless of whether the procurement of the entrusting or the possessor’s disposition of the goods have been such as to be larcenous under the criminal law.

Gift

gift

  • Intent: present intent to convey property

  • Delivery: transfer of possession

  • AND Acceptance: presumed but can be refused by donee

delivery

Manual/Actual Delivery

  • Donor physically transfers possession to donee

Constructive Delivery

  • Donor physically transfers the means of access or control to donee

Symbolic Delivery

  • Donor physically transfers to the done an object that represents or symbolizes the subject or matter of the gift

delivery - the livery of seisin

  • Livery of Seisin: an ancient ceremony for conveyance of land by the symbolic transfer of a relevant item (as a key, twig, or turf) or by symbolic entry of the grantee

delivery - public policy

  • Feel the “wrench of delivery”

  • Provide unequivocal evidence of the gift

  • Create prima facie evidence in favor of the gift

types of gifts

Gift Inter vivos

  • Made during lifetime

  • Irrevocable

Gift causa mortis

  • Made in contemplation of a specific cause of death

  • If donor doesn’t die of the contemplation, the gift is automatically revoked

    • Note: the donor still needs to enforce their rights within the statutory period

  • Gift remains revocable at anytime

  • If donor dies of the contemplation, the gift becomes irrevocable​

present possessory estates

Present possessory estates

  • Fee simple

  • Fee tail

  • Life estate

  • Leasehold (or term of years)

Words of purchase

Describe the persons (called “purchasers”) who take an interest under a grant or devise.

Words of limitation

Define the scope of or otherwise limit the estate being granted.

Fee simple

Largest possible estate in land, denoting the aggregate of all possible rights that a person may have in that parcel of land.

 

O conveys to A and her heirs

  • Common Law: the words of limitation "her heirs" was required. Other wise the conveyance would create a life estate.

  • Modern: the words of limitation "her heirs" are implied if absent. A conveyance intending to create a life estate must expressly state so.

"heirs"

Heirs

  • Those who stand to inherent a person's property after death.

  • A persons "heirs" are said to hold a mere expectancy, which is not a protectable interest in property and is not reachable by the heirs creditors during their lives.

Intestacy

  • Someone dies without a valid will is said to die intestate.

  • Their estate is distributed per the laws of intestate succession.

 

Devisement

  • Someone dies with a valid will.

  • The will controls if it complies with the formalities, with some exceptions (like the spouses’ elective share).

  • The will does not come into effect until death. Until death (or legal incapacity) a person is free to change their will.

Feudal Intestacy

  • Spouses: the wife’s legal status is merged with her husband at law, and takes nothing

  • Issue & Collateral: Primogeniture is applied, such that the eldest living male issue takes, then eldest collateral, upon payment of incidents to the Crown

  • Ancestor: If all male issue and collateral are dead, a distant male ancestor takes upon payment of incidents, otherwise the property escheats to the Sovereign. (i.e., the Crown)

Modern Intestacy

  • Spouses: Spouse is the intestate successor of some share of the testator's estate as defined under state law.

  • Issue: If spouse is dead, or if spouse has gotten their share, the direct children of both take next, down the line of descent.

  • Ancestors: If no issue or all issue are dead, the parents take.

  • Collaterals: All persons related by blood to the decedent who are neither descendants nor ancestors are collateral kin take next.

  • Escheat: A person who dies intestate with no heirs forfeits their property to the Sovereign.

fee tail

Common Law: A conveyance of all possible rights that a person may have in that parcel of land except the right to alienate the property or devise it to nonfamily member.

O to A and the heirs of her body

Modern: Nearly all States have abolished the fee tail as enshrining and aristocratic land ownership.

  • Majority approach: conveyance is void, A takes in fee simple.

  • Minority approach: A takes in fee simple, if A dies intestate with no issue, the O can gift the property to another party.

  • Minority approach: A takes a life estate.

Life Estate

A grant of property limited to the life of the grantee.

O to A for life, . . .

Life Estate pur autre vie

A can convey her life estate to B, creating a life estate pur autre vie (for the life of another).

Valuing Life Estates

Annuity approach

  • Some courts will use the value of an annuity calculated using the life tenants remaining life on the life expectancy table. 

Apportioned Actuarial approach

  • Some courts will use the life expectancy table and the Dept. of Treasury regulations to calculate the life tenants pro rata share remaining in the property.

Restraints on Alienation

Disabling 

  • Under a disabling restraint, A may not convey.

  • Disabling restraints are always void.

Forfeiture

  • Under a forfeiture restraint, A loses her estate if she attempts to convey.

  • Forfeiture restraints are valid for life estates and future interests, but they are not enforceable for fee simple estates.

Promissory

  • Under a promissory restraint, A promises not to convey.

  • Promissory restraints are valid for life estates and future interests, but they are not enforceable for fee simple estates

Duties of the Life Tenant

Sale/lease 

  • Life tenant cannot sell/lease a greater interest then the one they possess

Mortgage

  • Bank will not mortgage properties on the life estate as a security interest

Waste

  • Exploiting the property and its resources may constitute waste

Insurance 

  • Life tenant has no duty to insurance the property, and is usually entitled to the proceeds from casualty losses

Trusts

A trust divides ownership into legal and equitable interests.

  • Trustee: holds legal title to trust property.

    • ​Trustee has fiduciary duty to manage property for beneficiaries. Trustee cannot self-deal.

  • Beneficiary: holds equitable title to trust property.

    • ​Beneficiaries have right to benefit from property. The benefit is qualified, and not absolute. 

Waste

Affirmative waste

  • Intentional waste leading to substantial decreases in value

Permissive waste

  • A negligent failure to take reasonable care of the property

Ameliorative waste

  • Intentional waste leading to substantial increases in value

  • Modern Majority: rejects liability for ameliorative waste

Leasehold (Term of Years)

  • The leasehold tenancy created under the landlord tenant contract is the second most common estate in the United States today and the most common in Miami.

  • This estate is subject to extensive statutory regulation and contract law (covered in a later class).

Defeasible Fees

Defeasible Fees

  • Fee simple determinable

  • Fee simple subject to condition subsequent

  • Fee simple subject to executory limitation

Note: can also apply to other present possessory estates

Fee Simple determinable

Fee simple that terminates automatically when a defined event (or restriction) occurs.

 

O to the S.B. so long as (or during, while). . .

. . .the premises are used for school purposes

Possibility of Reverter

  • The future interest retained by the transferor to divest a fee simple determinable.

  • Cannot be created in the transferee.

  • Immediate and automatic forfeiture.

Fee Simple subject to condition subsequent

Fee simple that does not automatically terminate but can be cut short or divested at the grantor’s election.

 

O to the SB but if (or provided that). . .

the premises are not used for school purposes, 

the grantor has a right to re-enter and retake the premises.

 

Right of entry

  • The future interest retained by the transferor to divest a fee simple subject to a condition subsequent.

  • Cannot be created in the transferee.

  • Maybe expressly or impliedly created, but best practice is to put it in writing.

  • No forfeiture until right of entry exercised.

Fee Simple subject to executory limitation

Fee simple may be divested by the grantor if a specified event happens.

 

O to the SB but if (or provided that). . .

the premises are not used for school purposes,

to the City Library

 

Executory interest

  • The future interest granted to a third-party transferee to divest a fee simple subject to a condition subsequent.

  • Cannot be created in the transferee.

  • Immediate and automatic forfeiture.

Future Interests

future interests

Interests initially retained by the transferor/grantor

  • Reversion

  • Possibility of reverter

  • Right of entry (also known as “power of termination”)

Interests created in a transferee/grantee

  • Vested remainder

  • Contingent remainder

  • Executory interest

reversion

Reversion

The interest remaining in the transferor, or in the successor in interest of a testator, who transfers a vested estate of a lesser quantum than that of the vested estate which he has.

 

O to A for life

 

Transferability

  • Majority & FL: alienable, devisable, and descendible

Possibility of Reverter

A future interest remaining in the transferor or her heirs when a fee simple (or life estate) determinable is created.

O to S.B. so long as it is used for school purposes

 

Transferability

  • Common law: could descend through intestacy but not devisable or alienable inter vivos. Mahrenholz

  • Majority & FL: alienable, devisable, and descendible.

 

Statute of Limitations

  • Accrues when condition occurs.

Right of Entry

A future interest remaining in a transferor when a fee simple (or life estate) subject to condition subsequent is created.

O to S.B. but if it ceases to use the land for school purposes, O has the right to re-enter and retake the premises.

 

Transferability

  • Common law: could descend through intestacy but not devisable or transferable inter vivos. Mahrenholz

  • Majority: descendible, devisable in some states, but not alienable.

  • FL: alienable, devisable, and descendible.

Statute of Limitations

  • Accrues when the right of reentry is exercised.

  • OR Accrues when the condition occurs.

Remainders

A remainder is a future interest created in and that remains away from the grantor in a third person.

 

Note:

  • A remainder is capable of immediate effect

  • An executory interest must divest (cut short) the prior estate.

 

Remainders can be:

  • Vested;

  • OR Contingent.

Vested Remainders

Vested Remainders

  • Given to an ascertained person;

  • AND not subject to a condition precedent (although may be subject to a condition subsequent).

 

Transferability

  • Alienable, devisable, and descendible.

Types

Indefeasibly vested: not subject to divestment or diminution

 

O to A for life, then to B and her heirs

 

Vested subject to total divestment: subject to a condition subsequent

 

O to A for life, then to B for life, but if B drinks, then to C and her heirs

 

Vested subject to open* (or partial divestment): a class gift

 

O to A’s children

(A has one child, X)

contingent remainders*

  • Given to an unascertained (or unborn) person

  • OR subsequent to a condition precedent

 

O to A for life, then to A’s children and their heirs. 

A has one child, B.

 

Transferability

  • Common Law: Contingent remainders, with a few exceptions, were neither assignable nor attachable by creditors. 

  • Modern: alienable, devisable, and descendible

Executory Interests*

An executory interest is a future interest in a transferee that must, in order to become possessory

Shifting executory interest: divest or cut short some interest in another transferee

 

O to A and his heirs

but if A dies without issue surviving him,

to B and her heirs.

 

Springing executory interest: divest the transferor in the future

 

O to A if A passes the bar exam

Dead hand control

dead hand control

Public Policy

  • Dead hand control refers to the ability of a deceased person to exert control over property long after death through restrictive legal devices like conditional bequests.

  • Property law seeks to balance the freedom of disposition with preventing unreasonable restraints on alienation and use.

  • Thus, a living person, has the right to determine inter vivos who will get their property upon their death, but they cannot control the behavior of those using the land from the grave forever.

rules furthering marketability

  • Prohibition on Abeyance

  • Destructibility of Contingent Remainders 

  • Doctrine of Merger

  • Rule in Shelley’s Case

  • Doctrine of Worthier Title

  • Rule Against Perpetuities

prohibition on abeyance

O to A if A gets married. A is not married.

 

There is a gap in the conveyance. 

  • O retains a fee simple subject to springing executory limitation,

  • A holds an executory interest in fee simple absolute. 

 

Remember: You must account for the entire fee at all times. 

  • Someone must hold a present possessory interest (hold seisin), as there cannot be an abeyance in title (i.e. a gap in seisin). 

  • The Common law developed the next two doctrines (destructibility of contingent remainders and merger) in response. 

destructibility of contingent remainde

O to A for life, then to B and her heirs if B reaches 21.

 

Common law: A legal remainder in land is destroyed if it does not vest at or before the termination of the preceding freehold estate. If at A’s death B is under the age of 21, B’s remainder is destroyed. O now has the right of possession.

 

Why? 

  • The rule of destructibility developed from the feudal concept of seisin. Seisin could never be held in abeyance; all real property required that someone must hold seisin.

  • This prohibition on abeyance is thought to have been created to protect feudal landowner's interests.

Majority: most states have abolished the destructibility of contingent remainders. 

  • These Courts will “wait and see” what happens. Upon A’s death, B holds a springing executory interest. If B reaches the age of 21, B’s springing executory interest will vest in fee simple.

merger

O to A for life, then to B and her heirs if B survives A. A then conveys her life estate to O.

  • If the life estate and the next vested estate (either a reversion or a vested remainder) in fee simple come into the hands of one person, the lesser estate is merged into the larger. 

  • The life estate merges into the reversion, destroying B’s contingent remainder.

the rule in shelly's case

O to A for life, then to A’s heirs.

 

Common Law

  • One instrument

  • Creates a life estate in A

  • AND Purports to create a remainder in persons described as A’s heirs (or the heirs of A’s body)

  • AND The life estate and remainder are both legal or both equitable

Common Law

  • The Rule in Shelley’s Case gives A a vested remainder in fee simple. 

  • A’s life estate then merges into the remainder, leaving A with a fee simple in possession. 

  • The land is immediately alienable by A and not tied up for A’s lifetime.

Majority: abolished in most states

the doctrine of worthier title

O to A for life, then to O’s heirs. 

  • Common Law: Where there is an inter vivos conveyance of land by a grantor to a person, with a limitation over to the grantor’s own heirs either by way of remainder or executory interest, no future interest in the heirs is created; rather, a reversion is retained by the grantor. 

  • Majority: abolished in most states

The Rule against perpetuities

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.

1.  Identify the interest.

  • Is it a future interest subject to the rule?

    • Contingent remainder

    • executory interest

    • OR a class gift?

  • If it is not, RAP does not apply.

2.  Is there any limitation on when the person holding that interest can actually get the property? 

  • If there is no limitation, the interest violates RAP.

3.  Determine the measuring lives. (Also called the validating lives). These are the individuals who are relevant in deciding when the future interest vests.

4.  Determine the perpetuity period.

  • Identify all the possible events that cause the contingency to occur outside the perpetuity period.

  • Is it possible that any interest vests more than 21 years after the deaths of all of the measuring lives who are currently alive and who are relevant to the vesting of the future interest?

all or northing rule

Class Gifts

  • If a gift to one member of a class might vest too remotely, the entire class gift is void.

rap limitations

Majority: RAP does not apply to future interests in the transferor (the reversion, possibility of reverter or the right of reentry)

 

Minority: RAP limits the possibility or reverter or the right of reentry to a specific number of years or upon recording notice or both

reform

Unrealistic Assumptions

  • Minority: unrealistic assumptions do not apply (i.e., the fertile octogenarian; the unborn widow)

 

Wait and See

  • Minority: ”wait and see” if the remainder will vest outside the perpetuity period. If all remainders vest inside the period, then the remainders are valid.

The Uniform Statutory Rule Against Perpetuities

  • Majority: If at the end of a 90 year period an invested has not vested, the court may reform the conveyance.

 

Restatement (Third) 

  • Minority: Abandons the rule all together, adopting a two generation approach. 

  • If any interest would vest outside of two generations of the last living measuring live, it is void.

  • Note: very few states have adopted the USRAP 

 

Qualified Abolition

  • Minority: 25% of states have abolished the rule for trusts if the trustee has a power of sale.

Florida Reform

  • In 2022, Florida amended its RAP statute to provide for a 1,000 year perpetuity period. Under Florida law:

    • An interest in any trust created on or after July 1, 2022 must vest within 1,000 years of that interest’s creation.

    • An interest in any trust created between January 2001 and June 2022 must vest within 360 years.

    • An  interest in any trust created before January 2001 must vest within 90 years.

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