tutorial 11/21

• The bartender's son and the chef own the restaurant in undivided half interests as tenants in common, with the bartender's interest subject to the judgment credit's mortgage.

• The bartender's son and the chef own the restaurant in undivided half interests as tenants in common, with the entire interest subject to the judgment creditor's mortgage.

• The chef owns the restaurant in fee simple, subject to the judgment credit's mortgage.

• The chef owns the restaurant in fee simple.

Answer explanation

• Vested remainders subject to open

• Shifting executory interests

• Contingent remainders subject to express condition

• Contingent remainders

Answer explanation

• The estate created in Larry and Dahlia by Tom's will was a joint tenancy.

• The estate created in Larry and Dahlia by Tom's will was a tenancy by entirety.

• The estate created in Larry and Dahlia by Tom's will included the right of survivorship.

• The estate created in Larry and Dahlia by Tom's will was a fee rather than a life estate.

Answer explanation

• A contingent remainder

• A shifting executory interest

• A springing executory interest

• They have no interest in the ranch

Answer explanation

In which of the following situations is a claim that the document contains an unlawful restraint on alienation most likely to fail?

• A provision in a commercial lease for twenty years

          bars the tenant from assigning or subleasing the

          premises without the landlord’s consent.

• A provision in the by-laws of a condominium

     requires owners who desire to sell their units to

     offer them to the homeowners association at the

     lower of the original purchase prices or the

     current fair market value.

• A condition on a life estate provides that the life estate shall terminate if the life tenant sells the

      interest.

• The claim is likely to fail in all three situations.

Answer explanation

A is correct.  The test is whether the restraint is reasonable.  As long as a landlord acts reasonably in giving or withholding consent to the transfer of the tenant’s leasehold interest, a landlord has a legitimate concern in assuring that a tenant does not assign or sublease to an irresponsible person who might default on paying or trash the property.  B is wrong because a first refusal right that allows a homeowners association but an owner’s unit at less than its current market value is unreasonable because it deprives the owner of the equity in the unit and confers a windfall profit on the association.  C is wrong because a total ban on the sale of property is a classic example of an unreasonable restraint, even as applied to a life estate.

A and B owned Greenacre as tenants in common.  The following events then occurred in the following order: 

    1.  A died leaving a will devising all A’s property to C and D as joint tenants with rights of survivorship. 

    2.  C died intestate leaving E as C’s sole heir at law. 

    3.  D died leaving a will devising all D’s property to F.

        

Who owns what share of Greenacre now?

• B 100%

• B 50%; F 50%

• B:50%; E:25%; F:25%

• B:33.35; E:33.3%; F:33.3%

Answer explanation

B is correct.  A and B were tenants in common, and each owned 50% of the property.  When A died, A’s 50% passed per A’s will to C and D as joint tenants.  When C died, C’s 25% passed to D per the right of survivorship, giving D 50% of the property.  When D died, D’s 50% passed to F.  Answer A is wrong because there was no right of survivorship between A and B, such that when A died A’s interest passed to A’s heirs.  Answer C is wrong because E didn’t inherit anything when C died because C’s interest passed to D per the right of survivorship.  Answer D is wrong for the same reason and because B originally had and still has a 50% interest.

Alpha and Beta are joint tenants with rights of survivorship of Greenacre.  Alpha deeds all Alpha’s interest in Greenacre to Gamma and Delta as joint tenants with rights of survivorship.  Gamma then dies leaving a will that bequeaths all Gamma’s property to Omega.  Delta then dies intestate.  Delta’s sole heir at law is Epsilon.  Who owns Greenacre now?

• Beta

• Beta owns a one-half interest and Epsilon owns a

           one-half interest

• Beta owns a one-half interest and Omega and

  Epsilon each own a one-quarter interest

• Beta, Omega, and Epsilon each own a one-third

           interest 

Answer explanation

B is correct.  When Alpha deeded Alpha’s half interest to Gamma and Delta, that severed Alpha’s joint tenancy with Beta who became a tenant in common with Gamma and Delta.  When Gamma died, Gamma’s one-quarter interest passed to Delta per the right of survivorship.  When Delta died intestate, Delta’s one-half interest passed to Epsilon per the law of intestate succession.  Answer A is wrong because the right of survivorship between Alpha and Beta was severed when Alpha conveyed to Gamma and Delta.  C is wrong because: Omega has no interest in the property, since upon Gamma’s death the right of survivorship with Delta trumps Gamma’s will.  D is wrong because Beta had a half interest in the property, and Beta’s half interest can’t be diminished by Alpha’s conveyance of Alpha’s half interest. 

Following their marriage, Smith conveyed to Jones as a gift a half interest as a tenant in common in an office building Smith had purchased and managed prior to the marriage.  Thereafter, Smith continued to manage the property full time, while Jones pursued a career as a doctor.  After operating expenses such as mortgage payments, taxes, insurance and maintenance, the office building’s leases produced a substantial profit.  This profit was contributed to the family budget, along with Jones' earnings as a doctor.  Unfortunately the marriage ran into problems, and Smith and Jones divorced.  Following the divorce Smith continued to manage the office building and pocketed the profits from it, while Jones continued her medical practice and pocketed the earnings from it.  Jones has sued Smith for one-half the profits from the office building following the divorce.  This jurisdiction follows the equal rights rule regarding the rights of cotenants to use the property.  What is the most likely result?

• • Jones wins because Smith failed to get Jones’ consent to Smith’s management of the office building.

• 2. Jones wins because the profits of risk free ventures must be shared with cotenants.

• 3. Smith wins because Jones did not contribute to the cost of the building.

• • Smith wins because the profits from one cotenant’s use of the property need not be shared with the other cotenants.

Answer explanation

D is correct.  Under the equal rights rule, when one cotenant conducts a business on the property, the other cotenant who did not participate in running the business is not entitled to share in the profits from the first cotenant’s efforts and does not have to share in the losses if the business in unsuccessful.  Answer A is wrong because under the equal rights rule either cotenant is entitled to use the property without the other cotenant’s consent as long as they do not impede the other cotenant’s right to use the property.  B is wrong because the operation of a rental office building is not a risk free venture and could produce either a profit or a loss.  C is wrong because the building belonged to both Smith and Jones, and who contributed to its cost is irrelevant to the issue of profit and loss sharing.  

Jack and Jill, who were husband and wife, acquired Greenacre, a parcel of vacant land, as joint tenants with rights of survivorship.  Five years later they separated.  After discussing the matter, they agreed that Jill would build a house on Greenacre at her own expense and live there.  Two years later Jill divorced Jack and married Spouse.  While on their honeymoon Jill was accidentally killed, leaving Spouse as her sole heir at law by intestate succession.  One month later City took Greenacre by eminent domain.  The condemnation award is $300,000, $100,000 of which is attributable to the land and $200,000 to the house Jill built.  In this jurisdiction a divorce automatically severs a joint tenancy, and a cotenant who improves the property is entitled upon dissolution of the cotenancy to reimbursement for the amount by which the improvements enhance the property’s value.  How will the $300,000 be split among Jack and Spouse?

• 1. Jack will receive $50,000, and Spouse will receive $250,000.

• 2. Jack will receive $100,000, and Spouse will receive $200,000.

• 3. Jack and Spouse will each receive $150,000.

• 4. Jack will receive the entire $300,000.

Answer explanation

A is correct.  Since Jill built the building, she was entitled upon the sale of the property to contribution for the amount by which the building enhanced the property’s value.  The condemnation of the property is a type of sale.  When Jill and Jack divorced, their joint tenancy was severed by law and they became tenants in common.  When Jill died, her husband inherited her half of the property and her right to contribution.  The contribution is $200,000.  Jack and Spouse each own 50% of the land, so each gets $50,000 of the land value.  B is wrong because awarding Jack $100,000 would in effect give him 100% of the land value.  C is wrong because awarding Jack $150,000  would in effect award him half the value of the building without requiring him contribute to its construction.  D is wrong because the divorced severed the joint tenancy between Jill and Jack.