THE CONCEPT OF PROPERTY

Why Recognize Propertya. Five Theories of Property –only theories, not necessarily concluded in the rule of law

(Justifications for having property)i. Protect First Possession

ii. Encourage Laboriii. Maximize Social Happinessiv. Ensure Democracyv. Facilitate Personal Development

II. Legal Positivism a. In our legal system, property exists only to the extent that it is recognized by

government. Thus, natural law theory has little impact on property law.

III. Property Rights as a Bundle of Rightsa. Property consists of rights rather than things

i. Implications1. Property rights are relative, not absolute

a. The law resolves conflicts in property by determining the relative scope and extent of each owner’s rights in the particular situation.

IV. Rule of Capture of Wild Animals – a. GR: Possession is obtained with reasonable control and precautions to prevent

escape over captured wild animal. i. Reasonable

1. Ordinary persona. Question of fact for the fact finderb. Based on arguments of the facts

ii. The one who satisfies this test first, is the property owneriii. Personal Property – rule relates to personal propertyiv. Animal is transformed from being wild to being owned by an individualv. Consider how much control is needed based on case authority. Compare

Pierson majority (deprived animal of natural liberty) v. minority views (reasonable prospect of gaining control)

vi. Does not apply to domesticated and wild animals in urban areas

V. Test for Common Law Right to Publicity - White v Samsunga. Factors

i. Defendant’s use of identity ii. Defendant may not appropriate plaintiff's name (celebrity) or likeness to

defendant’s commercial (or otherwise) advantage

iii. lack of consent by celebrity iv. resulting injury to celebrity

b. **Focus of the common law? **i. Common law is not focused on the how but whether the identity of the

celebrity was appropriated

VI. State Law Rulesa. GR: State Law defines property rights

i. What is property is fluid and subject to evolution1. Easier to monitor amongst states

ii. Exception1. Copyrights and Patents

What is Property?

I. Right to Transfera. GR: Property is freely transferrableb. Why is the right to transfer (alienate) an important rights?

i. Encourages conservation of property ii. Supports liberty

iii. Ensure highest and most valuable use of property c. Exceptions

i. Many depending on type of property, state, etc.ii. While the law favors free alienation of property, an owner’s right to

transfer is sometimes limited for public policy reasons.iii. The law regulates what can be transferred, how transfers are made, and

who can transfer or obtain property.d. Johnson v M’Intosh – Native Americans

i. Right to transfer only to the government – makes it hard to make economically satisfactory deal

e. Moore v Regents of UC – cell transferi. Does Moore have the right to transfer (sell) sell body parts after removal

1. Majority concerns about extending conversiona. Consider policy considerationsb. Extension of Strict Liabilityc. Legislative prerogativesd. Impacts on science research

II. Right to Excludea. The law generally protects an owner’s right to exclude others from his property,

subject to privileges such as consent and necessity. Exceptions exist based on jx.b. GR: Property owners have a right to exclude others from their property

i. Right is supported by1. Trespass (Tort/criminal)

a. Right to Exclude Restatement (2nd) of Torts Section 158i. One is subject to liability for trespass, irrespective

of whether he thereby causes any harm to any legally protected interest of thereof, if he intentionally . . .. enters land in the possession of the other, or causes a thing or third person to do so

2. No injury or intent needed to show trespassii. Conversion for personal property

iii. Exceptions:1. Migrant workers visiting w/ social organizations based on

balancing2. Necessity or emergency

c. Jacque v Steenberg Homesd. State v Shack

III. Right to Usea. An owner is normally entitled to use his property as he wishes, as long as she

does not injure the rights of others. The spite fence and nuisance doctrines help define the limits of the right to use.

b. GR: Property owners have absolute right to use their property in any way wishedc. Exceptions

i. uses that injure others –Nuisance - Prah1. Nuisance-Tort Restatement , § 822

a. One is subject to liability for a private nuisance if . . . his conduct [nontrespassory] is a legal cause of an invasion of another's interest in the private use and enjoyment of land, and the invasion is either

i. (a) intentional and unreasonable, or 1. Unreasonableness Of Intentional Invasion

a. An intentional invasion of another's interest in the use and enjoyment of land is unreasonable if

i. (a) the gravity of the harm outweighs the utility of the actor's conduct, or

ii. (b) the harm caused by the conduct is serious and the financial burden of compensating for this and similar harm to others would not make the continuation of the conduct not feasible.

ii. (b) unintentional and otherwise actionable under the rules controlling liability for negligent or reckless conduct . . . .

ii. Spite fences – Sundowner v King1. Common law: Spite fences were permitted under the absolute

ownership theory2. Modern law: Sundowner, Inc v. King (p. 71)

a. Spite fences are prohibited if i. serves no useful purposes injury neighbors and

ii. constructed with malicious intentb. Should state of mind (intent) of fence builder toward

neighbor matter?iii. Nuisance theory v Spite Fence Restrictions – How they differ

1. Nuisance is not limited to fences2. does not require malice3. may restrict useful conduct under balancing

iv. Many other exceptions to follow

IV. Right to Destroya. The scope of an owner’s right to destroy is unclear. In practice, the law rarely

intervenes to prevent destruction. i. But concern arises when an owner seeks to destroy property that has

substantial value to society. b. A well-ordered society cannot tolerate the waste and destruction of resources

when such acts directly affect important interests of other members of societyc. Eyerman – left in will to destroy house upon death

i. How much autonomy does the owner have over her property?1. Majority – concerned with the “waste and destruction of

resources”d. The scope of an owner’s right to destroy is unclear. In practice, the law rarely

intervenes to prevent destruction.i. Concern arises when owner seeks to destroy property that has

substantial value to society, and some courts have limited this right.

OWNING REAL PROPERTY

Adverse Possession - Land ownership based on land (possession) occupancy for a period of time

I. Elements of Adverse Possessiona. Actual

i. Some real use of property given its natureii. This actual possession starts to run against the statutory time limit

b. Exclusivei. No one uses but the possessor without possessor’s consent

ii. Does not share possession with the public or the actual ownerc. Open and notorious

i. Visible possession that would give notice to true owner upon reasonable inspection of adverse title claim.

1. Open and Notorious requires that the adverse possessor must be so visible and obvious that a reasonable owner who inspects the land will receive notice of an adverse title claim. It must be applicable to condition, size, and locality of the land

d. Adverse and hostilei. The majority rule (and modern trend) is that the adverse possessor’s

state of mind is irrelevant.1. This element is satisfied so long as the owner has not authorized

the occupancy. a. However, some jxs require that the adverse possessor

believe in good faith that he is the owner of the land.ii. Actions consistent with ownership; consider intent or mental state of

possessor iii. Adverse/hostile means without the owner’s consent. iv. Claim of right – sometimes an additional element

1. Adverse Possessor is using the land as a reasonable property owner would

2. Must be continuous as that of a reasonable owner would bee. Continuous

i. Activity carried out in a manner of property’s normal use of a reasonable owner

f. For statutory period: Required time period of possession

***Plaintiff has to establish ALL SIX elements by preponderance of the evidence***- Defendant only has to disprove one of the six elements to win- High standard of proof for taking away someone’s title- Defendant tries to pick a vulnerable element to disprove

II. CASESi. Van Valkenburgh – adverse possession of land

1. For the purposes of constituting an adverse possession by a person claiming title not founded upon a written instrument or a judgment or a decree, land is deemed to have been possessed or occupied in either of the following cases, and no others:

a. Where it has been protected by a substantial inclosure.b. Where it has been usually cultivated or improved.

2. A state can write a state to overrule common law- APa. States have the ability to modify adverse position, get rid

of adverse position or make it more difficult to succeed on adverse possession.

ii. Difference between possession and ownership1. Possession

a. Right to possess but not the owner2. Ownership

a. No right to possess, but still the owner ie: landlord

III. Justifications for adverse possessioni. The dominant view is that the adverse possession is a specialized statute

of limitationsii. Encourages Clarification on Title Disputes In Timely Manner

iii. Encourages Development of Propertyiv. Encourages Use of Property

IV. The Adverse Possessor’s State of Minda. Adverse and Hostile

i. Three different theories1. Possessor must believe in good faith she is owner of land2. Possessor must have bad faith-knows she does not own land and

intends to take property anyway3. State of mind is irrelevant—look at objective indications (facts on

the ground) to determine if adverse and hostile – CA – used in most Jurisdictions

a. Hostility is not ill willb. Rejects subjective state mind against true ownerc. Instead hostility appears to be objective conduct (not

subject to adverse possessor’s state of mind)V. Mechanics of Adverse Possession

a. Color of title i. Refers to a written instrument (deed, judgment, etc.) that is invalid but is

used a basis of adverse possession.ii. In some states, it is used to shorten statutory period or allow for claims

on lands that were not used but are described in the documentiii. Isnt a true deed but represents a true deed

b. Quiet Title Actioni. lawsuit to settle competing claims to real property

ii. 2 types of actions1. A (AP) sues B (true owner) to clarify title under AP theory2. B (true owner) sues A (AP) to clarify title, eject A from property if

present as a trespasser, and A raises AP is an affirmative defense

c. Tacking – helps the Adverse Possessori. The addition of two or more adverse possession periods to meet the

statutory period if successive occupants are in privity?

1. Provides benefit to adverse possessors2. Requires the elusive concept of privity—”reasonable connection

between successive occupants”

d. Disabilities – helps the true owneri. Disabilities—can extend statutory AP period when true owner is

“disabled”1. Protect owners with disability and makes it harder to obtain

property by AP2. Disability means (depending on jurisdiction) imprisonment, lack of

mental capacity, minority (under age), living outside of the state, military service

e. Identity of the Partiesi. If party in true possession has less than fee (complete) title (tenant, life

estate), adverse possessor only gets lesser title. ii. If the true owner is the government, the general rule is that it is

impossible to obtain property through adverse possession from the government.

f. Governmenti. If a true owner is the government, the GR is that it is impossible to obtain

property through adverse possession from the government1. Government controls property rights – control statutes governing

this2. If you are adversely possessing against the government, you are

essentially adverse possessing against yourself3. Character of public property – open and available – is different in

nature than private property

The Vertical Dimension of Ownership - The right to make use of the airspace above the land or the subspace below the land, such as through mineral, oil, or gas extraction (Oil & Gas Law)

I. GR: English and American common law—property owner owns from the center of earth to the heavens and may use both the airspace and subsurface (Heaven to hell principle)a. Modern exceptions: numerous and fact sensitive and depends on use in question

II. Airspace Rightsa. Under traditional theory, a landowner’s title extended upward to heavens, but

this view collapsed with the invention of the airplane. Today, most authorities agree that the surface owner’s rights do not extend upward indefinitely. One view is that the owner holds title only up to a fixed height, usually 500 feet.

b. US v Causbyi. Fifth Amendment: “[N]or shall private property be taken for public use,

without just compensation.”

ii. Modern Law: Airspace is divided into two rough categories:iii. Owner has same rights in lower airspace as on the surface land

1. Government intrusions may be a taking if impact is immediate, direct, and substantial

2. Private intrusions could be a trespass or nuisanceiv. Upper airspace is freely navigable and not part of owner’s bundle of

sticks (rights)III. Subsurface Rights

a. The traditional view was that a landowner’s title extended downward to the center of the earth, but modern courts increasingly question this view. Some courts suggest that the surface owner’s rights extend downward only so far as to accommodate a reasonable and foreseeable use of the subsurface.

b. Sprankling – Owning the Center of the Earthc. Mineral, Oil and Gas Rights

i. GR for hard (coal, gold, copper, etc) minerals: absolute ownership as part of bundle of rights to center of the earth

ii. GR for oil and gas: Owner may acquire as much gas and oil (mobile substance) as the owner can produce under common law rule of capture

1. Modern exceptions Correlative rights doctrine: limits rules of capture to non-wasteful production to better share resources

2. Statutory changes: well spacing and other laws further encourage sharing

Water Law - The right to use surface water flowing near land or to extract groundwater under the land

I. Surface Water Allocationsa. The dominant view is the surface owner may withdraw groundwater only for

reasonable uses on his overlying land. Today almost all states have rejected the rule of capture approach to groundwater.

b. 2 Systemsi. Riparian system-landowners with parcels adjacent to fresh waters (river,

streams, lakes, etc) are entitled to divert and make reasonable uses of the water on that parcel only

ii. Appropriative system (TX, CA and other western states) water is allocated on a first-person to divert basis called a “priority system” and parcel location is irrelevant

1. Person who diverts first in the priority system has a stronger right then the 2nd, 3rd etc.

a. Government intervenes and says to person with lowest right, “stop diverting water”

b. Protects the first person in times of drought etc.c. Becomes a property right attached to this parcel

c. Modern exceptions

i. Correlative rights doctrine: limits rules of capture to non-wasteful production to better share resources

ii. Statutory changes: well spacing and other laws further encourage sharingd. Problem

i. if you wait to take a reasonable amount, most likely your neighbor will not have waited

1. Promotes excessivenessII. Groundwater Doctrines

a. Rule of Capture (TX)b. Reasonable Use (pumping is limited to reasonable use on the overlying parcel

(parcel with well)c. Appropriative System (based on first to use principle)

OWNING PERSONAL PROPERTY

Four ways to Acquire Personal Property

I. Rule of Captureg. Taking possession of wild animal

i. Originally the rule of capture governed property rights in wild animals; ownership was acquired only by physical possession of the animal.

1. The rule of capture was later used to determine property rights in other natural resources such as water, oil and natural gas

II. Findersa. Someone who rightfully acquires property that was lost, mislaid, abandoned, or

a treasure troveb. The nature of the item and the location of the find are important in determining

the finder’s rights.i. Mislaid

1. voluntarily and knowingly put item in a certain place with intent to return, then forgets about it

2. GR: Right goes not to the finder, but to property owner where item is found (loqus in quo)

ii. Lost1. owner unintentionally and involuntarily parts with possession of

item and doesn’t know where it is 2. GR: Finder acquires rights of possessions against all except true

owner. Consider context of where property is found, employer-employee relationship, and whether property is affixed to the ground

iii. Abandoned1. owner no longer wants item and relinquishes it2. GR: Finder has a right to possession and ownership of property

iv. Treasure trove: Owner concealed coins or currency long ago1. Items of value like money, gold, silver, etc. 2. Intentionally buried in the earth for later recovery3. GR: Generally goes to land owner (but English common law goes

to crown) v. Employee/employer

1. If an employee finds an item in the course of employment, it belongs to the employer

III. Adverse Possessiona. Title to personal property may be obtained by adverse possession

i. Statutory period begins when possession becomes open and notorious1. Statutory period generally shorter for personal property

IV. Gifta. Transfer of Property without considerationb. Inter vivos gifts – between living people

i. Donative intent1. intent to make an immediate transfer

ii. Delivery1. donor parts with dominion and control (most complicated

element)2. Types of delivery

a. Manuali. physical transfer of possession of gift to donee

b. Constructivei. transfer to donee the means of obtaining

possession and control of giftc. Symbolic

i. something is transferred to donee in place of gift to recognize the gift

iii. Acceptance1. Acceptance generally presumed

iv. GR: inter vivos gifts cannot be revoked v. Law of the Rings

1. GR: Inter vivos gift is not conditional2. Exception: The ring is a conditional inter vivos gift in anticipation

of marriage. If the marriage (condition) does not take place, the ring is returned to donor.

a. Montana—rings stays with women-- treat as an inter vivos gift (not revocable)

b. Ring goes to person who was not at fault for broken engagement

c. CA Civil Code Sec. 1590 - Where either party to a contemplated marriage in this State makes a gift of money or property to the other on the basis or assumption that

the marriage will take place, in the event that the donee refuses to enter into the marriage as contemplated or that it is given up by mutual consent, the donor may recover such gift or such part of its value as may, under all of the circumstances of the case, be found by a court or jury to be just.

c. Gift Causa Mortisi. Elements

1. Donative intent 2. Delivery 3. Acceptance 4. Gift made in imminent contemplation of death

ii. Gift is revocable any time before death!1. Property generally reverts to O if O doesn’t die

Ownership v PossessionI. Both common law actions for personal property; differ on remedy

a. Trover—action to recover damages for wrongful taking of personal propertyb. Replevin—action to recover possession personal propertyc. Both Largely replaced by modern statutes but concepts are similar

II. Possessiona. Possession put short of complete ownership

i. Would need to return to true ownerii. Could transfer, use, etc.

b. Bailmenti. rightful possession of goods by one who is not the owner (property held

in trust)1. Bailor: owner of the goods2. Bailee: holder or receiver of the goods

ii. Examples: valet parking, rented equipment, pet hotelsIII. Distinguish between Possession and Ownership

a. First possessor generally protected other than against true owner for lost property

b. Traditional rules are based on classification of propertyi. Lost, mislaid, abandoned, , treasure trove (some)

ii. Location of property where found—area open to public?iii. employer/employee relationship iv. property affixed or embedded in soil v. BUT: labels often used as justification, not the real reason

INTELLECTUAL PROPERTY

IP Overview

I. Laws governing Ownership of Information or Ideasa. Generally defined by federal law through statute

i. Compare to other property rights defined by state lawII. Policy Considerations Why IP is Protected –

a. Encourage development of new productsb. Allow creator to receive fruit of laborc. Balance between monopoly practicesd. The Constitutional Basis, p. 242

i. Congress has the power to “promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Art. 1, sec. 8

3 major categories of IP

I. Copyrighta. protects literary, musical, pictorial, television, and dramatic worksb. Purpose

i. Encourage creative effort by giving authors an incentive to produce works that will benefit the public

c. Componentsi. Occurs automatically once work is authored

ii. No government designation need to obtain copyright protectioniii. Provides protection for 70 years from the death of the authoriv. Author has exclusive right to use, distribute, license (royalties), or sell

workd. Protected works must be

i. Original1. Original ideas v. facts

a. What is the test for originality?i. Independently created by author

ii. Some degree of creativityb. De minimis quantum of creativity

ii. Work of authorship1. Fall within protected category: literary (includes computer

programs), musical, dramatic, dance, artistic (pictorial, graphic, or sculptural), video recordings, sound recordings, and architectural work

iii. Fixation1. Produced in permanent form

e. Use of Copyrighted material without Permissioni. Infringement - somebody exercise rights reserved exclusively for

copyright owner1. Does not have to be intentional2. Remedies: damages, injunctive relief

3. Important Defense: Fair Use Doctrinea. not infringement if used for criticism, comment, news,

classroom use, scholarship, and research.II. Patent

a. protects process, machines, methods of manufacture, and composition of matterb. Requirements for a valid patent

i. Patentable subject matterii. Utility

iii. Noveltyiv. Non obviousnessv. enablement

c. Components i. Protection occurs when granted by federal government through United

States Patent and Trademark Officeii. 20 years protection from date of application

iii. Sometimes difficult to draw a line between nonpatentable natural process and patentable process transforming nature.

d. Purposei. Encourage creative effort by giving inventors an incentive to produce

inventions that will benefit the public e. 35 U.S.C. § 101, p. 377

i. 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, subject to the conditions and requirements of this title.

1. Interpreted broadly to include living organismsf. Elements of Valid Patents, p. 275

i. Subject Matter: process, machine, manufacture, or composition of matterii. Utility: useful invention

iii. Novelty: new or noveliv. Nonobviousnessv. Enablement : skilled person could make or use

III. Trademarka. protects names or images of a particular company or productb. Requirements

i. Distinctivenessii. Non-functionality

iii. First use in tradec. Components

i. Protects word, name, symbol, or device used to identify a manufacturer or sponsor of goods

ii. Defined by state common law to protect consumersiii. Congress has also regulated under the Commerce Clauseiv. Trademarks may be registered

v. Rights are based on a first in-time approachvi. Must be used to obtain protection

d. Purposei. To protect consumers from being deceived about the source of goods

and servicesii. To give trademark owners an incentive to produce quality goods and

services

ESTATES & FUTURE INTERESTSHistoryTerms

I. Deed a. Owner transfers property through “conveyance”) while alive (inter vivos)

II. Will a. Owner transfers property through written (called “devise”) will at the time of his

or her deathIII. Intestate succession (no will)

a. Property transfers at the time of owners death based on state adopted rules

Modern Freehold EstatesI. Fee Simple Absolute

a. Creating Wordsi. O to A and his heirs

ii. To A in fee simpleiii. To A

b. Limitations in deeds and wills on the transfer of property rightsi. GR: Absolute restraints on fee simple absolute are void

ii. Restraints on Alienation1. A provision in a deed or will that expressly or effectively prohibits

a future transfer of a fee simple is an invalid restraint on alienation

II. Life Estatea. Rights

i. Gives use and enjoyment of propertyii. Period of possession can be measured by person in possession OR

1. another person (life estate pur autre vie)a. O to D for the life of E

iii. O retains reversion if conveyance is silentb. Creating Words

i. To A for lifeii. To A to live in forever

c. Examplesi. O conveys “to B for life” (and upon B’s death, then to O)

1. Present Possession - B has a life estate 2. Future Possession (Future Interest) - O has reversion

ii. O conveys “to B for life and upon B’s death, to C and her heirs”1. Present Possession - B has life estate 2. Future Possession (Future Interest) - C has remainder

d. Waste Rulesi. Modern View

1. Substantial alteration permitted if doesn’t result in decrease in value

III. Fee Taila. Overview

i. Intended to keep property in the family1. Passes on through lineal decedents—a string of life estates2. If no lineal descendants, then back to O as a reversion

ii. Very limited in US and not in CAb. Creating Words

i. To A and the heirs of her bodyc. Right to Transfer

i. Limited ability to convey right to possess during lifetimeii. No ability to transfer by will (devise) or instate succession

IV. Fee Simple Determinable – Not in CAa. Overview

i. Estate ends when certain condition occursii. What are the conditions?

1. O retains a possibility of revertera. Automatic reverter – automatically divests

iii. Transferrable subject to durational conditionb. Creating Words

i. To A as long asii. To A while; To A until

iii. To A during . . . then to Ownerc. When Condition is met

i. Adverse Possession1. AP statute of limitations starts to run when the condition is met

V. Fee Simple Subject to Condition Subsequent ( or a power of termination)a. Overview

i. Estate ends when certain condition occursii. O retains a “right of entry,” which is at O’s discretion, not automatic--

Compare to FSDiii. Transferrable subject to durational condition

b. Creating Wordsi. Words of express condition

1. To A, provided that2. To A, but if3. To A, on the condition . . . then to Owner

c. FSSCS v FSDi. The key difference is how the condition subsequent if it occurs cuts short

1. Reverter option – option to re-entry and reclaim 2. Conditional language

d. 3 Options when Condition is Meti. Can wait forever to exercise right of entry

ii. Rights of entry must be exercised within a reasonable time. 1. AP statute starts after reasonable time

iii. 3. Some states treat like FSDVI. Fee Simple Subject to Executory Limitation

a. Overviewi. Essentially a FSD or FSSCS ends and future interest is held by a third party

(not transferor)1. Uses same magic words for creation as FSD and FSSCS

ii. Termination automatic 1. similar to FSC in that regard

iii. Third party interest (A, B and O)1. Third party has an executory interest

b. Creating Wordsi. To A as long as . . . then to B

ii. To A while, until, during, provided that, but if, . . . then to Biii. To A on condition that, . . . then to B

Modern Future InterestsI. Future interests Retained by Transferor

a. Reversionb. Possibility of Reverterc. Right of Entry (power of termination)

II. Future Interests created in Transferee (third party)a. Remainders

i. All are transferrable1. Vested (indefeasibly) remainder

a. O to B for life, then to C2. Vested remainder subject to divestment

a. O to B for life, then to D, but if D does not play in the NBA, then to E

i. D has vested remainder subject to divestment3. Vested remainder subject to open

a. O to B for life, then to E and to all of his family who play on NBA teams

i. E has vested remainder subject to open

4. Contingent remaindera. O to B for life, then to F if he plays in the NBA

ii. Characteristics of Remainder1. Future interest created in 3rd party, not in grantor, at time of

transfer2. Transferee (3rd party) capable of gaining a present interest

upon natural expiration (death/term of years) of possessor of prior estate

3. Does not cut short prior estate, which ends naturallyb. Executory Interests

i. Characteristics of Executory Interest1. Future interest in 3 party, not grantor2. But Transferee is not capable of gaining a present interest

upon natural expiration of prior estate a. look for FSD/FSSCS language

3. Does cut short prior estate4. Transferrable

ii. Examples1. O to C and her heirs as long as someone from the Jordan

family plays in the NBA, then to E and heirs. a. (E has shifting executory interest (Shifting--E divest C

(not O); C has FSSEL ) i. Dumbledore to Harry and his heirs if he graduates from

Hogwarts a. (Harry has springing executory interest; Dumbledore

has FSSEL ) (Springing-Harry divests Dumbeldore)

Rule Against perpetuities I. Overview

a. Owners desire to tie-up use of property in the future v. desire to promote marketability

b. Difficult to borrow due to title uncertaintyII. The Common Law Rule

a. No interest is good unless it vest or fails within 21 years after some life in being at the creation of the interest

b. Some tips on usingi. Life in being is a person alive (even if not named in transfer) at the time

of creation of the interestii. Validating life: used to test interests

iii. Vesting: removal of title uncertaintyIII. Modern trend—Common Law Rule Going Away!

a. Many states have abolished; Still used in TXb. Some states have modified by statute. Alaska-1000 years!c. Leases are much more common transactional tool than estates

d. Many states permit perpetual trusts (may include real property) for financial reasons and to avoid tax consequences

IV. Interests Subject to the Rulea. contingent remaindersb. executory interestsc. vested remainder subject to open

V. Interests not subject to the rulea. All present interests ( fee simples, fee simple defensible, fee tails, life estates,

leases)b. reversionc. possibility of reverterd. right of entrye. vested remaindersf. remainders subject to divestment