Chapter 2 Land Interests Present and Future Possessing interests in property How can one hold title possess rights to real estate Real estate is enduring time Land and improvements as tangible assets endure Interests intangible associated with the land also endure Actions affecting real property right go on forever Interests today can include both present and future rights different time Interests can be total or partial different type Different interests can be held by different holders at the same time different holder So interests divided by 1 time 2 type 3 holder All controlled by the granting language habendum clause in the instrument of conveyance deed etc Slide 2 Slide 2 Remember Slide 3 Slide 3 Real property interests Slide 4 Slide 4 Time present and future interests Present interests Freehold ownership several forms Non freehold leasehold not this chapter Defining present interests is all about time the duration of the interest defines the interest Future interests Possibility of Reverter Right of Entry Power of Termination Reversion Remainder Executory Interest Certain future interests paired with specific present interests Future doesn t mean it doesn t exist today It means that today it s non possessory Slide 5 Slide 5 Present interest 1 freehold estate Freehold estate Estates include key right of possession exclusion possessory Review 3 key property rights Possession Exclusion Use Enjoyment Convey Dispose Cf non possessory interests easements covenants etc Freehold estate unlimited or uncertain duration Cf non freehold leasehold estates limited certain in duration Freehold ownership as we think of it All freehold estates are present interests What s present about freeholds possession So freehold estate 1 present possessory interest of 2 uncertain or unlimited duration Slide 6 Slide 6 Fee vs non fee freehold estates Fee inheritable upon owner s death Fee freehold both inheritable fee and unlimited or uncertain duration freehold Fee Simple Absolute unlimited Fee Simple Defeasible uncertain possibly limited Fee Tail uncertain possibly limited Non fee freehold estate non inheritable yet still unlimited or uncertain in duration Life Estate uncertain Slide 7 Slide 7 Fee freehold 1 fee simple absolute Highest greatest form of private ownership No higher greater interest holder Doesn t mean the owner has all the bundle of rights Includes the 3 key rights to a greater degree Unlimited duration use and transferability Granting words To A and his heirs and assigns No qualification setting up potential forfeiture unlimited duration no limited type use and to heirs inheritability Assumed intention of Grantor even without and his heirs To A alone FSA i e default grant Slide 8 Slide 8 Fee freehold 2 fee simple defeasible Potential termination uncertain duration Two types that are very similar Fee simple determinable To A so long as the premises are used for school purposes Title instantly automatically back to Grantor or heirs assigns Grantor retains future interest possibility of reverter Fee simple subject to a condition subsequent To A provided liquor is never sold on the premises and if so Grantor can reenter and take back the property Grantor or heirs assigns must take action to regain fee title Grantor retains future interest right of entry power of termination We ve divided the interest by 1 time present and future 2 type FSD and POR ROE POT and 3 holder Slide 9 Slide 9 Distinguishing fee simple defeasible Fee simple determinable automatic until so long as Fee simple subject to condition subsequent requires action but if then on condition that and if provided that in which event If unclear courts prefer subject to condition subsequent why Think chain of title implications Slide 10 Slide 10 Rogers v U S Facts Federal rails to trails law turns abandoned railroad into public trails owners claim taking without compensation 5th Amendment b c easement only for railroad use and reverted to owner if abandoned type of interest owners move for summary judgment Issues Did statutory conversion of railroad easement to recreational easement effect a taking under the 5th Amendment Holding Yes Rationale Trails Act created a recreational easement new burden where none existed taking and also prevented the reversion to the owner under state property laws taking Disposition Owners entitled to just compensation Rule of Law The owner is entitled to compensation when a Federal statute a creates a new easement burden or b prevents a reversion when it Slide 11 would have reverted under state law Slide 11 Consider 2 1 Stumbo v BOE What interests created by the granting language if they fail they will convey back Fee simple subject to condition subsequent present with right of entry power of termination future What happens and who wins Quiet title action lawsuit What if the state required periodic recording of notice by holders of future interests and no notice was recorded Could the 500 payment change the outcome Contract or option to purchase periodic notice requirement Holding FSSCS failed due to no periodic recording and no N A contract option Slide 12 Slide 12