Greg MD Blog

09/01/2024

Module 2 Assignment – Estates and Co-Ownership Case Problems

Purpose

The purpose of this assignment is to review the various types of freehold estates and co-ownerships/tenancies. You will now need to apply what you have learned. For Part C, you may find it helpful to make a diagram.

Instructions

Complete the following:

Part A:

Read each of the hypothetical scenarios and then answer the questions after each.

#1. Owen transfers his estate to Paul “as long as the property is used as an avocado farm.” Paul uses the property for an avocado farm for ten years and then decides to grow tomatoes instead.

a. What type of freehold estate is this known as? (2 points)

            Fee Simple Determinable

b. What happens to the estate when Paul stops using it as an avocado farm? Explain. (Be sure to discuss why this happens and who owns the estate at this point.) (3 points)

Paul has entered into a Free Simple Determinable Estate agreement with the property owner, which grants him the use of the land. However, the ownership of the real property is restricted and will automatically expire based on the occurrence or non-occurrence of an event specified in the deed of conveyance in the will. The deed will include the provision “to have and to hold” as long as Paul uses the land for ten years as an avocado farm. Should Paul neglect or violate the terms of the conveyance, the property will revert back to the original owner or their heirs as outlined in the “reverter” clause. This arrangement provides the property owner with a future interest in the land and the possibility or right of reverter.

#2. George transfers his estate to Harriet “on the condition that the premises are never used for the sale of alcoholic beverages.”

1. What type of freehold estate is this known as? (2 points)

Fee Simple on Condition Subsequent

• What happens when Harriet decides to open a pub serving alcoholic beverages and beer with carry out services? (Be sure to discuss why this happens and who owns the estate at this point.) (3 points)

The conditionally upon George transferring his estate an heir of his body the use of the property under specific conditions. Harriet is his heir “on the express condition that” the premises is never sale alcoholic beverages. Harriet can open a pub by using this property however, she started selling alcoholic beverage.

 is an violation of conveyed fee.

#3. Aaron transfers his house “to Bob for your life and then to Carol.”  Carol dies before Bob.  Bob then dies.

1. What type of estate did Aaron convey to Bob? (2 points)

Life Estate

• Who owns the house when Bob dies? Aaron? Carol’s heirs? Bob’s heirs? (Be sure to explain why this person/these people own the house at this point.) (4 points)

Aaron created a deed for a life estate, stating that Bob would use the property for the rest of his life. However, Bob created a Fee Simple Will granting Carol the vested real property for her lifetime. When Carol passed away before Bob, the property reverted back to Bob until his death. The owner of a life estate is entitled to the full use and enjoyment of the real property so as long as the owner exercises ordinary care and prudence for the preservation and protection of the real property and commits no acts intending to cause permanent injury to the person entitled to own real property after the termination of the life estate. Now that Bob has passed away, Carol’s vested interest goes to her heirs or the devisees under her Will.

Part B:

Find, cite, and copy and paste the Indiana statute found in Title 32 which places a time limit on the length that a condition subsequent (with possibility of reverter or right of entry) can be enforced. (3 points)

IC 32-30-1-5 Statute of limitations; general rule

     Sec. 5. (a) As used in this section, “designer” means a person who:

(1) designs, plans, supervises, or observes the construction of an improvement to real property; or

(2) constructs an improvement to real property.

     (b) As used in this section, “possessor” means a person having ownership, possession, or control of real property at the time an alleged deficiency in an improvement to the real property causes injury or wrongful death.

     (c) As used in this section, “deficiency” does not mean a failure by a possessor to use reasonable care to maintain an improvement to real property following a substantial completion of an improvement.

     (d) An action to recover damages, whether based upon contract, tort, nuisance, or another legal remedy, for:

(1) a deficiency or an alleged deficiency in the design, planning, supervision, construction, or observation of construction of an improvement to real property;

(2) an injury to real or personal property arising out of a deficiency; or

(3) an injury or wrongful death of a person arising out of a deficiency;

may not be brought against a designer or possessor unless the action is commenced within the earlier of ten (10) years after the date of substantial completion of the improvement or twelve (12) years after the completion and submission of plans and specifications to the owner if the action is for a deficiency in the design of the improvement.

Part C:

Read each of the hypothetical scenarios and then answer the questions after each.

#1. Aaron conveys by deed a parcel of real property to John, Jane, and Susan as joint tenants with right of survivorship.  John, during the lifetime of all the joint owners, transfers his interest in the property to Carol. After John’s transfer to Carol, Jane dies and wills her interest in the property to Barbara.  After Jane’s death, Susan dies and wills her interest in the property to Stewart. 

1. Who are the owners of the property? (2 points)

John,Jane and Susan are joint tenants

• What proportion (e.g. sole owner [100%], 1/2, 1/3, 1/6) does each have? (3 points)

Each joint tenants has 1/3 interest in the property.

• How do/does the current owner(s) own the property (e.g. what type of tenant is each with the other(s))? (3 points)

Joint tenants with right of survivorship

• Explain why the current owner(s) own the property the way he/she/they does/do now. (5 points)

The application of two or more person are joint tenants with right of survivorship. Each owner has 1/3 interest in the property and if one of the property owner dies then there 1/3 of property will be equally divided with the remainding property owners giving each one ½ interest in the property. IC 32-17-2-1 Sec. 1. (a) Sec. 1. (c) subsection. c. (1)-(2)

Under Indiana General Assembly

IC 32-17-2-1                                       Application; two or more persons; conveyances and devises

             Sec. 1. (a) This section does not apply to:

(1) mortgages;

(2) conveyances in trust; or

(3) conveyances made to husband and wife.

            (b) Every estate vested in executors or trustees as executors shall be held by them in joint tenancy.

            (c) Except as provided in subsection (b), a conveyance or devise of land or of any interest in land made to two (2) or more persons creates an estate in common and not in joint tenancy unless:

(1) it is expressed in the conveyance or devise that the grantees or devisees hold the land or interest in land in joint tenancy and to the survivor of them; or

(2) the intent to create an estate in joint tenancy manifestly appears from the tenor of the instrument.

#2. Jennifer conveys by deed a parcel of real property to Rob (a single dad), Scott, and Tony and Patty (together as husband and wife). Tony gives his share to Louise, his best friend, because he intends to divorce Patty and does not want her to be entitled to any of his share in the settlement. Rob dies, leaving his two children without a mother or father.

1. Who are the owners of the property now? (2 points)

Rob (estate), Scott ,Tony (give his share to Louis) and Patty

• What proportion does each have (e.g. sole owner [100%], 1/2, 1/3, 1/6) does each have? (3 points)

Each will own ¼ of Real Property Tenant in Common and the two children of Rob will each own 12.5% of there father (Rob) estate ¼ .

• How do/does the current owner(s) own the property (e.g. what type of tenant is each with the other(s))? (3 points)

Jennifer transfers a parcel of real property as a Tenant in Common to four owners, each with a 25% interest. When a tenant in common owner of real property dies, their share will not pass to the other owner but go to the heirs. As a result, when Rob passed away, his 25% share of the real property will be distributed among his heirs. His children will each receive 12.5% of his share of the real property as outlined in Rob’s Will or Estate distribution. When Tony and Patty as married couple IC 32-17-3-4 Sec. 4. (a) (1) (2) (3)became co-owners in real property with Rob and Scott as single individual in conveys best for all owners as Tenant in Common.

IC 32-17-3-4 Husband and wife; joint deed of conveyance

     Sec. 4. (a) A joint deed of conveyance by a husband and wife is sufficient to convey and pass any interest described in the deed of either or both of them in land held by them as:

(1) tenants in common;

(2) joint tenants; or

(3) tenants by the entireties.

• Explain why the current owner(s) own the property the way he/she/they does/do now. (5 points)

In this scenario, Jennifer transferred a piece of real estate to Rob, Scott, Tony, and Patty as Tenants in Common through a deed. Later, Tony gave his share to Louis, and Rob passed away. Despite there being five co-owners of the real estate, Rob’s two children inherit his estate. As a result, the other three co-owners each have a 25% share, while Rob’s children each have a 12.5% share, totaling 25%. This is in accordance with IC 32-17-2-5 Sec. 5. A (1) regarding conveyance by the tenant for life or years. It’s important to note that Jennifer’s conveyance applies to all owners, regardless of whether they are single or married, and also accounts for the possibility of an owner’s death.

IC 32-17-2-5 Conveyance by tenant for life or years

    Sec. 5. A conveyance made by a tenant for life or years that purports to grant or convey a greater estate than the tenant possesses or can lawfully convey:

(1) does not result in a forfeiture of the tenants’s estate; and

(2) passes to the grantee or alienee all the estate that the tenant may lawfully convey. 

Written by: Greg MD