> ## Documentation Index
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# Session 05 - Present Possessory Interests & Defeasible Estates

> Organized outline notes on present possessory interests, defeasible estates, restraints on alienation, and doctrine of waste

## I. Overview of Present vs. Future Interests

### A. Basic Framework

* **O** = Owner/Grantor (presumed fee simple absolute holder)
* **A** = Present possessory interest holder (who has it NOW)
* **B, C, D, etc.** = Future interest holders

### B. Key Concept

* Present possessory interests focus on who has the property **right now**
* Future interests concern who gets it later (covered in subsequent sessions)

## II. Fee Simple Estates

### A. Fee Simple Absolute (FSA)

#### 1. Common Law Conveyance

* **Formula**: "O to A and his/her heirs"
* **MUST** contain the word "heirs" under common law
* Without "heirs" = problem under common law

#### 2. Modern Law Conveyance

* **Formula**: "O to A" (that's it!)
* **Presumption**: O transfers everything
* No need for additional language ("heirs" not required)
* Maximum ownership interest possible
* A can freely assign, sell, or do whatever A wants

### B. Fee Tail

* **Common Law Only** - does NOT exist modernly
* **Formula**: "O to A and the heirs of her body"
* **Limits interest** to lineal descendants of grantee (DNA/blood)
* Only \~3 states still follow it
* **Modern Treatment**: Creates a fee simple absolute instead

### C. Defeasible Fees

Three types of defeasible fees - all can potentially last forever and ever until breach:

#### 1. Fee Simple Determinable (FSD)

**Characteristics**:

* Uses **words of duration**: "so long as," "while," "until," "during"
* **Automatic forfeiture** upon breach
* O doesn't have to do anything - property automatically reverts

**Formula**: "O to A so long as Blackacre is used for residential purposes only"

**Breakdown**:

* O: Retains **possibility of reverter** (future interest, by operation of law)
* A: Has **fee simple determinable**
* **If breach occurs**: Property automatically forfeits from A and goes back to O (or O's heirs)
* **If no breach**: Goes to A's heirs, then their heirs, forever (all subject to same restriction)

**Key Rule**: Anytime a fee simple determinable is conveyed, O will ALWAYS, by operation of law, hold a **possibility of reverter**

#### 2. Fee Simple Subject to Condition Subsequent (FSSCS)

**Characteristics**:

* Uses **restrictional/contractual language**: "on condition that," "provided that," "but if"
* **NO automatic forfeiture**
* **Discretionary** - O (or O's heirs) may elect to re-enter and take back

**Formula**: "O to A on condition that Blackacre is used for residential purposes, otherwise O reserves the right to re-enter and retake Blackacre"

**Breakdown**:

* O: Retains **right of entry** (also called "power of termination")
* A: Has **fee simple subject to condition subsequent**
* **If breach occurs**: O has the right to re-enter (but must exercise it)
* **Right of entry must be expressly reserved** in the conveyance

**Adverse Possession Timing**:

* Clock does NOT start ticking until O exercises right of re-entry
* Continuous use, even if in breach, is presumed valid until O acts
* Once O tries to re-enter and divest A, adverse possession clock begins

**Why Use FSSCS vs. FSD?**:

* Sometimes the conveyance is complicated
* Grantor may not want to automatically punish someone for breach
* Allows flexibility when conditions may be ambiguous

#### 3. Fee Simple Subject to Executory Limitation (FSSEL)

**Characteristics**:

* Can use either duration OR conditional language ("so long as" OR "on condition that")
* **Key difference**: Upon breach, property goes to **B** (third party), NOT back to O
* Language typically includes "then to B" or "otherwise to B"

**Formula**: "O to A so long as Blackacre is used for residential purposes, otherwise to B"

**Breakdown**:

* O: Conveys and has no future interest (unless specified)
* A: Has **fee simple subject to executory limitation**
* B: Has **executory interest** (future interest that divests A)
* **Upon breach**: Property goes to B (not O)
* **B gets property**: In fee simple absolute (NO restrictions carry over to B unless explicitly stated)

**Important Distinction**:

* First two defeasible fees go back to O upon breach
* FSSEL goes to B (third party) upon breach

## III. Life Estates

### A. Basic Life Estate

#### 1. Common Law

* **Formula**: "O to A for life"
* Still creates a life estate

#### 2. Modern Law

* **Formula**: "O to A for life"
* **MUST contain "for life"** - that's how we know it's a life estate
* A has present possessory interest in a life estate with **A being the measuring life**

#### 3. Future Interest

* When life estate conveyed, O retains a **reversion**
* **Reversion**: Property automatically goes back to O (or O's heirs) when A dies

#### 4. Three Types of Life Estates

* Life estate (regular)
* Life estate **pur autre vie** (measured by another's life)
* Defeasible life estates (3 types - see below)

### B. Defeasible Life Estates

Similar structure to defeasible fees, but maximum duration = grantee's life

#### 1. Determinable Life Estate

**Formula**: "O to A for life, so long as Blackacre is used for residential purposes"

**Breakdown**:

* A: Has **determinable life estate**
* O: Retains TWO future interests:
  * **(1) Reversion** (gets it back when A dies)
  * **(2) Possibility of reverter** (gets it back if A breaches)
* **Maximum duration**: A's lifetime
* **Automatic forfeiture** upon breach (goes back to O)

#### 2. Life Estate Subject to Condition Subsequent

**Formula**: "O to A for life, on condition that Blackacre is used for residential purposes, otherwise O reserves the right to re-enter"

**Breakdown**:

* A: Has **life estate subject to condition subsequent**
* O: Retains TWO future interests:
  * **(1) Reversion** (when A dies)
  * **(2) Right of entry** (discretionary if A breaches)
* **No automatic forfeiture** - O must exercise right to re-enter

#### 3. Life Estate Subject to Executory Limitation

**Formula Ambiguity Issue**:

* "O to A for life, so long as used for residential purposes, then to B" = **PROBLEMATIC**
  * Unclear if B gets it (a) upon A's death, OR (b) upon breach
  * Should specify: "But if not used for residential purposes, then to B" (breach trigger)
  * OR: Different conveyance for death vs. breach scenarios

**Key Distinction**:

* If B gets property upon **A's death** = NOT executory interest (it's a **vested remainder**)
* If B gets property upon **breach** = Executory interest

**Maximum Duration**: A's life only

* If A dies without breach → goes back to O (via reversion)
* If A breaches → goes to B (via executory interest)

## IV. Restraints on Alienation

### A. Overview

* **NOT** a type of estate
* A provision that withholds the power to sell, transfer, gift, or mortgage property
* Land is freely alienable (law favors free transfer for tax revenue)
* Commonly tested on exams and bar

### B. Spotting Restraints

**Example**: "O to A so long as Blackacre is used for residential purposes and that A and A's heirs never sell Blackacre"

* The "never sell" provision = restraint on alienation

### C. Analysis Framework

#### 1. **Identify** the restraint provision

* Look for language restricting sale, transfer, gift, or mortgage

#### 2. **Determine validity** (case-by-case, no formal rule)

**Factors to Consider**:

* **Duration**: How long does restraint last?
  * Forever = likely invalid
  * Limited term (e.g., 30 years) = possibly valid
* **Intent/Purpose**: What are grantor's intentions?
  * Good faith purpose (e.g., preserve wildlife) = possibly valid
  * No explanation/arbitrary = likely invalid
  * Discriminatory (race, gender, national origin) = invalid
* **Reasonableness**: Is it reasonable overall?
  * Blanket restraint with no explanation = invalid
  * Limited duration + legitimate purpose = possibly valid

#### 3. **Remedy if Invalid**

* **Strike/void the restraint provision**
* Read conveyance as if restraint doesn't exist
* Use a pencil and cross it out

### D. Effect on Estates

**Example**: "O to A so long as used for residential purposes, and that Blackacre is never sold, otherwise to B"

**Analysis**:

* Initial classification: A has FSSEL (or FSSCS)
* Restraint = "never sold"
* Restraint is **indefinite** (forever), no stated purpose, not reasonable
* **Remedy**: Cross out "and that Blackacre is never sold, otherwise to B"
* **Result**: A has **fee simple absolute**

**Key Point**: Restraint based on **use** = different from restraint on **alienation**

* "Used for residential purposes" = valid limitation on USE
* "Never sell Blackacre" = restraint on ALIENATION (likely invalid if indefinite)

### E. Exam Tips

* 25-30% of essay questions contain restraints
* Always check validity of interests created
* Look for "validity" language in interrogatories
* Discuss even if not explicitly asked

### F. Three Types of Restraints

1. **Disabling restraint** - (see rule statement materials)
2. **Forfeiture restraint** - (see rule statement materials)
3. **Promissory restraint** - (see rule statement materials)

## V. Doctrine of Waste

### A. Overview

* **NOT** an estate type
* A **remedy** that future interest holders can assert
* Primarily applicable to **life estates** (not fees)
* Future interest holder must be nearly guaranteed to get property

### B. When It Applies

**Scenario**: "O to A for life, then to B"

* A = present possessory interest holder (life estate)
* B = future interest holder (will get property when A dies)
* If A harms the property, B's future interest is prejudiced

### C. Three Types of Waste

#### 1. Affirmative Waste

* **Intentionally** damaging the land permanently
* **Example**: A is present interest holder, land has oil
  * A cannot extract all oil, reap all profits, and leave B with nothing

#### 2. Negligent Waste (Permissive Waste)

* **Omissions** in upkeeping the property
* Failure to maintain property
* **Example**: Not fixing foundation, allowing property to become dilapidated, weeds everywhere

#### 3. Ameliorative Waste

* **Changing the character** of the property
* Even if it increases value, it may burden future interest holder
* **Example**: Converting residential Newport Beach home into commercial clown circus
  * Property value may increase
  * BUT: Changes nature from residential to commercial
  * Future interest holder now burdened with managing business, taxes, etc.
  * Goes beyond what grantor contemplated

**Not Ameliorative Waste**:

* Cosmetic changes (e.g., remodeling bathroom)
* Changes that don't alter fundamental character (residential to residential)
* Must change from residential → commercial, or commercial → industrial

### D. Remedies for Future Interest Holder

Three potential remedies:

1. **Sue for damages**
2. **Seek an injunction** to stop the activity
3. **Possibly divest** present interest holder (unclear - research question)

### E. Important Limitations

* Must act **before** A dies
* After A dies, may only be able to sue A's estate for damages
* Most applicable when future interest is nearly certain (life estates)
* Less applicable to fees (A could have fee forever, may never go to B)

## VI. Key Exam Strategies

### A. Systematic Approach

1. **Is it fee or life?** (First question always)
2. **What kind?** (Absolute? Tail? Defeasible?)
3. **If defeasible, which type?** (Look at language)
4. **Check for restraints** (Spot "never sell/transfer" language)
5. **Assess validity** (Duration, intent, reasonableness)

### B. Language Cues

* **Words of duration** → Determinable ("so long as," "while," "until")
* **Conditional words** → Condition Subsequent ("on condition that," "provided that")
* **"Then to B"/"otherwise to B"** → Executory limitation
* **"Never sell/transfer/convey"** → Restraint on alienation (analyze validity)

### C. Remember

* This material is heavily tested
* Know your rule statements (see materials provided)
* Practice multiple examples (explanations are always the same)
* This is "another language" - requires repetition
* Material gets harder in coming weeks
* Use charts/tables provided in emails

## VII. Additional Concepts

### A. Heirs

* **Determined at death** (NOT before)
* You don't know who your heirs are while alive
* Common mistake: calling living children "heirs"
* Heirs of B are unascertainable until B dies

### B. Modern Law vs. Common Law

* Professor uses "iPhone law" = modern law
* O to A = fee simple absolute (modern)
* O to A and his heirs = fee simple absolute (common law)
* Most examples use modern law unless specified

### C. Conveyance Can Pass Through Generations

* Fee simple: Can pass to A's heirs, then their heirs, forever
* Life estate: Stops at A's death (or measuring life's death)
* Restrictions travel with property through successive owners (unless struck down)