Estates and Future Interests

Proceeds of partition by sale divided according to ownership interests without any credit given to co-owner whose funds were used to buy the property

/ Concurrent or Common Ownership, Estates and Future Interests, Real Estate Transactions

Because the Texas partition statute requires the proceeds of a partition sale to be divided “according to [the owners’] just rights therein,” joint tenants were entitled to 50% of the sale proceeds even though one of the co-owners had used his own funds to purchase the property. Gallagher v. Townsend, 443 P.3d 847 (Wyo. 2019). At the same time, the court would be entitled to adjust the amounts each party received to reflect the fact that one co-owner had paid more of the property taxes.

California limits enforceability of private transfer fees

/ Estates and Future Interests, Real Estate Transactions, Restraints on Alienation, Servitudes

California passed a statute prohibited private transfer fees unless used exclusively to support the encumbered property or cultural, education, charitable, recreational, environmental, conservation, or similar activities. Cal. Civ. Code §1098.6 (2018 Cal. Stat. ch. 306). Note that the Federal Housing Finance Agency and the Federal Housing Administration are prohibited from dealing in mortgages on properties encumbered by private transfer fee covenants that do not provide a “direct benefit” to the real property encumbered by the covenant.12 C.F.R. §1228.1.

“Condition” language creates executory interest, but new executory interests banned unless held by public or charitable entities

/ Estates and Future Interests

n White v. Auger,2019 N.H. LEXIS 4 (N.H. 2019), the grantor conveyed property to a grantee “on condition that” the grantee build on it (or on adjacent land) and live there (within 10 years) created a fee simple subject to executory limitation. State statutes abolished possibilities of reverter, rights of entry, and executory limitations unless the grantee is a public or charitable organization but that law did not apply retroactively. N.H. Rev. Stat. 477:3-b. Older future interests could continue if they were re-recorded as required by the statute.

Discovery rule tolls statute of limitations for enforcing a right of first refusal

/ Estates and Future Interests, Real Estate Transactions, Restraints on Alienation

The Texas Supreme Court held that the owner of a right of first refusal was not too late in asserting it because the statute of limitations did not start running until the owner knew or reasonably could have known that the right had been triggered. Carl M. Archer Trust No. Three v. Tregallas,566 S.W.3d 281 (Tex. 2018). The sellers of a surface estate granted the buyer a right of first refusal to purchase the mineral estate within 60 days after being given notice of an intent to sell those rights. The right of first refusal was recorded. Without giving such notice, the owner of the mineral estate sold that estate to a third party in 2007. Four years later (and outside the statute of limitations), the owner of the right of first refusal found out about the conveyance of the mineral estate and immediately sued to nullify it. The statute of …

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Possibility of reverter or right of entry cut off after 30 years

/ Estates and Future Interests, Real Estate Transactions, Restraints on Alienation, Title Issues

Massachusetts law sets a thirty year limit to possibilities of reverter following a fee simple determinable or rights of entry following a free simple subject to condition subsequent. Mass. Gen. Laws ch. 184A, §7. This contrasts with the 90 year limit for executory interests. Mass. Gen. Laws ch. 190B, § 2-901. The 30 year limitation was recently applied in Town of Winchendon v. Brandywine Farms, Inc.,2018 Mass. LCR LEXIS 91, 2018 WL 2297177, 26 Land Ct. Reporter 253 (Mass. Land Ct. 2018).

Permanent rights of refusal for tenancy in common interests owned by family members held void as unreasonable restraints on alienation

/ Concurrent or Common Ownership, Estates and Future Interests, Restraints on Alienation

A Massachusetts court has held that permanent rights of refusal applying to tenancy-in-common interests were void as unreasonable restraints on alienation. DiSchino v. Delanson Circle Holding, 2018 Mass. Super. LEXIS 67 (Mass. Super. Ct. 2018). The court noted that the state had a strong policy against unreasonably long restrictions on the alienability of land but that reasonable restraints are valid and enforceable. Rights of first refusal are not unreasonable if they are not for a fixed price or a long period. Here, however, the rights of first refusal owned by co-owners existed in perpetuity. That meant that even after an interest was transferred to another owner, it would remain subject to the right of first refusal whenever that new owner decided to sell the owner’s interest. The permanency of the restraint on alienation (it would effectively last forever) doomed it. In contrast, a restraint on partition of tenancy-in-common interests might …

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Is it an unconstitutional taking of property without just compensation to require sex offenders to move away from their home if a school, playground, or daycare center is established near their home after their initial occupation?

/ Consumer Protection, Estates and Future Interests, Homelessness, Takings

In Mann v. Georgia Department of Corrections,653 S.E.2d 740 (Ga. 2007), the Georgia Supreme Court held that a state statute prohibiting registered sex offenders from living or working within 1,000 feet of any facility where minors congregate, see Ga. Code Åò42-1-15, constituted a taking of property as applied to a sex offender who was forced to move after a child care center opened a facility within 1,000 feet of his home. The court noted that “it is apparent that there is no place in Georgia where a registered sex offender can live without being continually at risk of being ejected.” 653 S.E.2d at 755. Moreover, the effect of the statute “is to mandate appellant’s immediate physical removal from his . . . residence.” The court noted “the strong governmental interests that are advanced by the residency restriction” on sex offenders, but also found that the law effectively allowed “private third parties” …

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Can an owner or inhabitant of real property give police the right to search property when a co-owner or coinhabitant objects?

/ Concurrent or Common Ownership, Estates and Future Interests, Fourth Amendment, Leaseholds, Marital Property, Trespass

The Appeals Court of Massachusetts held that the police could search a closed suitcase in a common closet of a bedroom when given permission to do so by the defendant’s coinhabitant. Commonwealth v. Hernandez,93 Mass. App. Ct. 172, 2018 Mass. App. LEXIS 48 (Mass. App. Ct. 2018). This ruling was based on traditional rules of property law that give tenants in common rights of access to the property they both own. The court noted that any coinhabitant had the right to consent to a search of her home, her bedroom, and her closet because these were areas where both inhabitants shared joint access or control. The Supreme Court reached the opposite conclusion in the case of Georgia v. Randolph,547 U.S. 103 (2006) when it held that the police could not enter property owned by a married couple when one (but not the other) objected to entry. The Massachusetts case is consistent with …

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While real property held as tenancy by the entirety cannot be conveyed absent consent of both spouses, funds held in a bank account can be withdrawn by either spouse and, upon withdrawal, cease to be entireties property

/ Concurrent or Common Ownership, Estates and Future Interests, Marital Property, Personal Property

The Supreme Court of Tennessee overruled prior cases and adopted the Arkansas approach that allows spouses that own bank account as tenants by the entirety are free to withdraw funds unilaterally (without consent of their co-owner) and that moneys so withdraw become the individual property of the spouse that withdrew the funds. This contrasts with real property which neither spouse may convey without the consent of the other. In re Estate of Fletcher, 538 S.W.3d 444 (Tenn. 2017). It should be noted as well that Tennessee presumes that a conveyance to a married couple is held as a tenancy by the entirety unless the language provides otherwise.

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