PastPaperHero | Ownership of real property - Rules affecting these interests (including survivorship, class gifts, waste, and cy pres)

Learning Outcomes

After reading this article, you will be able to identify and apply the rules affecting ownership interests in real property, including survivorship in co-ownership, the treatment of class gifts, the doctrine of waste, and the cy pres principle for charitable trusts. You will be able to distinguish how these rules impact present and future interests, and answer MBE-style questions on these topics with confidence.

MBE Syllabus

For MBE, you are required to understand the rules that affect ownership interests in real property, especially as they relate to co-ownership, gifts to classes, and the preservation or modification of interests. In your revision, focus on:

Survivorship rights in joint tenancies and tenancies by the entirety
The treatment of class gifts and the rule of convenience
The doctrine of waste and its application to life estates and other limited interests
The cy pres doctrine as it applies to charitable trusts
The impact of these rules on present and future interests, including remainders and executory interests

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

Which of the following is a key feature of a joint tenancy?
1. Right of survivorship
2. Right to partition only by agreement
3. Automatic transfer to heirs on death
4. Requirement of a written will
Under the rule of convenience, when does a class gift to "children" typically close?
1. When the last child is born
2. When the first child reaches age 21
3. When any class member is entitled to possession
4. When the grantor dies
Which of the following best describes ameliorative waste?
1. Destruction of property by a tenant
2. Failure to pay taxes on the property
3. Improvements that increase property value
4. Leasing property without permission
The cy pres doctrine allows a court to:
1. Terminate a trust for impossibility
2. Reform a charitable trust to a similar purpose
3. Convert a joint tenancy to a tenancy in common
4. Accelerate a future interest

Introduction

Ownership of real property is subject to several rules that affect the nature, duration, and transfer of interests. These rules address what happens when property is owned by more than one person, when gifts are made to groups, how property must be maintained, and how charitable purposes are preserved. Understanding these rules is critical for analyzing MBE questions on present and future interests.

Types of Co-Ownership and Survivorship

Co-ownership of real property can take several forms, each with different consequences for survivorship and transferability.

Key Term: Joint Tenancy
A form of co-ownership where two or more persons hold equal interests with a right of survivorship, meaning that upon the death of one joint tenant, the surviving joint tenants automatically take the deceased’s share.

Key Term: Tenancy by the Entirety
A form of co-ownership available only to married couples, featuring a right of survivorship and restrictions on unilateral transfer or partition.

Key Term: Tenancy in Common
A form of co-ownership where each owner has an undivided share, with no right of survivorship; each share passes to the owner’s heirs or devisees upon death.

Survivorship Rights

In a joint tenancy or tenancy by the entirety, the right of survivorship means that the deceased owner's interest passes automatically to the surviving co-owner(s), not to the deceased's heirs. Severance of a joint tenancy (e.g., by sale or partition) destroys the right of survivorship and converts the interest to a tenancy in common.

Class Gifts and the Rule of Convenience

Gifts to a class, such as "children" or "issue," raise special issues about when the class closes and who takes. The rule of convenience is used to determine when a class gift closes for purposes of distribution.

Key Term: Class Gift
A gift made to a group of persons described by relationship or status (e.g., "children," "grandchildren") rather than by name.

Key Term: Rule of Convenience
A rule providing that a class closes when at least one member is entitled to immediate possession or enjoyment, unless the grantor clearly indicates otherwise.

Waste: Duties of Life Tenants and Limited Owners

The doctrine of waste protects the interests of future interest holders by limiting what current possessors can do with the property.

Key Term: Waste
Any act or omission by a person in possession of property (such as a life tenant) that damages or fails to preserve the property, to the detriment of future interest holders.

There are three types of waste:

Voluntary (affirmative) waste: intentional acts that reduce property value (e.g., destruction, removal of resources).
Permissive waste: failure to maintain or pay necessary expenses (e.g., taxes, repairs).
Ameliorative waste: changes that improve the property but alter its character.

Cy Pres Doctrine for Charitable Trusts

When a charitable trust's purpose becomes impossible or impracticable, the cy pres doctrine allows a court to modify the trust to achieve a similar charitable purpose.

Key Term: Cy Pres Doctrine
A principle allowing a court to modify a charitable trust to fulfill the settlor's general charitable intent as closely as possible when the original purpose cannot be carried out.

Worked Example 1.1

A and B own Blackacre as joint tenants. A sells her interest to C. What is the result?

Answer: The sale by A severs the joint tenancy as to A's share. C and B now own Blackacre as tenants in common, and B's right of survivorship is lost as to C's share.

Worked Example 1.2

O conveys "to A for life, then to A's children who reach age 25." At O's death, A has one child, B, age 27, and one child, C, age 22. Who takes the remainder when A dies?

Answer: Under the rule of convenience, the class closes at A's death. B, being over 25, takes immediately. C can join the class if C reaches 25 before A dies; otherwise, C is excluded.

Worked Example 1.3

T creates a charitable trust "to build a hospital in Town X." Years later, Town X no longer exists. What can the court do?

Answer: The court may apply the cy pres doctrine to redirect the trust funds to a similar charitable purpose, such as building a hospital in a nearby town, if T's general charitable intent is clear.

Exam Warning

On the MBE, be careful to distinguish between a joint tenancy (with survivorship) and a tenancy in common (no survivorship). Watch for facts indicating severance, such as sale or partition, which destroy the right of survivorship.

Revision Tip

For class gifts, always check whether the class closes by the rule of convenience or by the express terms of the grant. If in doubt, apply the rule of convenience.

Summary

Ownership of real property is shaped by rules on survivorship, class gifts, waste, and the cy pres doctrine. These rules determine who takes property on death, how gifts to groups are distributed, what duties possessors owe to future interest holders, and how charitable purposes are preserved when circumstances change.

Key Point Checklist

This article has covered the following key knowledge points:

Joint tenancy and tenancy by the entirety include a right of survivorship; tenancy in common does not.
Severance of a joint tenancy destroys the right of survivorship.
Class gifts close under the rule of convenience when a member is entitled to possession, unless otherwise stated.
The doctrine of waste limits what life tenants and other limited owners can do with property.
The cy pres doctrine allows modification of charitable trusts to achieve similar purposes when the original purpose fails.

Key Terms and Concepts

Joint Tenancy
Tenancy by the Entirety
Tenancy in Common
Class Gift
Rule of Convenience
Waste
Cy Pres Doctrine

Ownership of real property - Rules affecting these interests (including survivorship, class gifts, waste, and cy pres)