Rights in real property - Termination

Learning Outcomes

After reading this article, you will be able to identify and explain the main ways rights in real property terminate for MBE purposes. You will understand the legal rules governing forfeiture, merger, abandonment, and release, and apply these principles to estates, easements, covenants, leaseholds, and co-ownership. You will be able to analyze and answer MBE-style questions involving the extinguishment of property rights.

MBE Syllabus

For the MBE, you are required to understand the mechanisms by which rights in real property may be terminated. This article focuses on the following syllabus points:

• Distinguish between the main types of termination: forfeiture, merger, abandonment, and release.
• Recognize how defeasible fees, life estates, leaseholds, easements, covenants, and joint tenancies can end.
• Apply the doctrine of merger and the rules for abandonment and release to real property interests.
• Identify the effect of partition and surrender in terminating co-ownership and leasehold interests.
• Analyze exam questions involving the extinguishment of property rights.

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.

1. Which event will automatically terminate a fee simple determinable?
   1. The grantor’s express revocation
   2. The occurrence of the stated condition
   3. The grantee’s abandonment of the property
   4. The grantor’s death
2. Which doctrine terminates an easement when the dominant and servient estates come into common ownership?
   1. Abandonment
   2. Release
   3. Merger
   4. Prescription
3. Which of the following is required to terminate a real covenant by release?
   1. Oral agreement
   2. Written instrument
   3. Nonuse for the statutory period
   4. Partition
4. A tenant vacates leased premises before the end of the lease term and the landlord accepts the keys. What is this called?
   1. Surrender
   2. Merger
   3. Partition
   4. Abandonment

Introduction

Termination of rights in real property is a frequent subject on the MBE. Property rights may end by operation of law, by the parties’ actions, or by the occurrence of certain events. Understanding the main methods of termination—such as forfeiture, merger, abandonment, release, partition, and surrender—is essential for answering exam questions involving estates, leaseholds, easements, covenants, and co-ownership.

Termination of Estates

Defeasible Fees

A defeasible fee (such as a fee simple determinable or a fee simple subject to condition subsequent) may terminate upon the occurrence of a specified event or condition.

Key Term: Defeasible Fee
An estate in land that may be terminated upon the happening of a stated event or condition.

• Fee Simple Determinable: Ends automatically when the condition occurs; the property reverts to the grantor.
• Fee Simple Subject to Condition Subsequent: Ends only if the grantor exercises the right of entry after the condition occurs.

Key Term: Possibility of Reverter
The future interest retained by a grantor after conveying a fee simple determinable, allowing automatic reversion upon breach of the condition.

Key Term: Right of Entry (Power of Termination)
The future interest retained by a grantor after conveying a fee simple subject to condition subsequent, allowing the grantor to re-enter and reclaim the property if the condition is breached.

Life Estates

A life estate ends automatically upon the death of the measuring life. If the life tenant commits waste, a court may order forfeiture.

Key Term: Life Estate
An estate in land limited to the duration of a specified person’s life.

Leaseholds

A leasehold estate may terminate by expiration of the term, by forfeiture for breach, or by surrender (when the tenant and landlord agree to end the lease early).

Key Term: Surrender (Leaseholds)
The early termination of a lease by mutual agreement of the landlord and tenant.

Termination by Merger

When two successive interests in the same property come into the hands of the same person, the lesser interest may merge into the greater, extinguishing the lesser.

Key Term: Merger (Doctrine of Merger)
The termination of a lesser estate or interest when it and a greater estate become vested in the same person at the same time and in the same right.

Example: If a life tenant acquires the reversion, the life estate merges into the fee simple and is extinguished

Termination of Easements

Easements may end by several methods:

• Merger: If the dominant and servient estates come into common ownership, the easement is extinguished.
• Release: The holder of the easement executes a written release in favor of the servient owner.
• Abandonment: The easement holder demonstrates by physical action an intent to permanently abandon the easement.
• Prescription: The servient owner interferes with the easement openly and continuously for the statutory period.

Key Term: Easement
A nonpossessory right to use another’s land for a specific purpose.

Key Term: Abandonment (Easements)
The termination of an easement when the holder, by physical act, clearly indicates intent to relinquish the right permanently.

Key Term: Release (Easements/Covenants)
The termination of an easement or covenant by a written instrument executed by the holder in favor of the burdened party.

Termination of Covenants and Equitable Servitudes

A real covenant or equitable servitude may be terminated by:

• Release: A written agreement by the benefited and burdened parties.
• Merger: If the benefit and burden come into common ownership.
• Abandonment: If the benefited party acts in a way that shows intent to relinquish the right.
• Changed Conditions: If the neighborhood has changed so much that enforcement is no longer equitable.

Key Term: Covenant (Real Covenant)
A written promise concerning the use of land that runs with the land at law.

Key Term: Equitable Servitude
A nonpossessory interest in land, enforceable in equity, restricting the use of land.

Termination of Joint Tenancy

A joint tenancy may be terminated by:

• Severance: Any act that destroys one of the four unities (time, title, interest, possession), such as sale or partition.
• Partition: A court-ordered division or sale of the property.

Key Term: Severance (Joint Tenancy)
The termination of a joint tenancy, converting it into a tenancy in common, by destroying one of the four unities.

Key Term: Partition
The division of co-owned property into separate shares, or sale with division of proceeds, terminating the co-ownership.

Termination by Partition

Co-owners may terminate their concurrent interests by partition, either voluntarily or by court order.

Termination of Leaseholds

A leasehold may end by:

• Expiration: The natural end of the lease term.
• Forfeiture: Breach of a condition or covenant.
• Surrender: Mutual agreement to end the lease early.
• Merger: Tenant acquires the landlord’s interest.
• Abandonment: Tenant vacates and landlord accepts the abandonment as a surrender.

Termination by Abandonment

Abandonment requires more than nonuse; the holder must show intent to relinquish the right permanently, usually by physical act.

Termination by Release

A release must be in writing and signed by the party holding the right to be terminated.

Worked Example 1.1

A conveys land "to B so long as it is used for residential purposes." B builds a factory on the land. What happens to B's interest?

Answer: B's fee simple determinable ends automatically when the land is no longer used for residential purposes. The property reverts to A (or A's heirs) by operation of law.

Worked Example 1.2

C owns Blackacre and grants D an easement to use a path across Blackacre. Later, D buys Blackacre. What is the result?

Answer: The easement is terminated by merger because D now owns both the dominant and servient estates. The easement cannot be revived if D later sells the dominant estate.

Worked Example 1.3

E and F own land as joint tenants. E sells her interest to G. What is the effect?

Answer: The sale severs the joint tenancy as to E's share, converting it into a tenancy in common between G and F. F's remaining share with G is a tenancy in common, not a joint tenancy.

Exam Warning

Nonuse alone does not terminate an easement or covenant. There must be clear evidence of intent to abandon, usually by physical act or written release.

Revision Tip

Always check for the required formality: Releases and surrenders must be in writing and signed by the party giving up the right.

Key Point Checklist

This article has covered the following key knowledge points:

• Rights in real property may terminate by forfeiture, merger, abandonment, release, partition, severance, or surrender.
• Defeasible fees terminate automatically or upon exercise of right of entry.
• Easements end by merger, release, abandonment, or prescription.
• Real covenants and equitable servitudes terminate by release, merger, abandonment, or changed conditions.
• Joint tenancies terminate by severance or partition.
• Leaseholds terminate by expiration, forfeiture, surrender, merger, or abandonment.
• Written instruments are required for release and surrender.
• Abandonment requires clear intent and usually a physical act.

Key Terms and Concepts

• Defeasible Fee
• Possibility of Reverter
• Right of Entry (Power of Termination)
• Life Estate
• Surrender (Leaseholds)
• Merger (Doctrine of Merger)
• Easement
• Abandonment (Easements)
• Release (Easements/Covenants)
• Covenant (Real Covenant)
• Equitable Servitude
• Severance (Joint Tenancy)
• Partition