North Dakota Law Review and Tenants in Common and Waste Upon Property

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To understand the concept of property as "the rights one has in the property," nosotros need to hash out specific property rights.�To assist in this give-and-take and agreement, holding rights are sometimes described as a "bundle of sticks" with each stick in the bundle representing a property right.�Using this illustration, the question becomes "which sticks in the package (which rights) practice I have with respect to this item and which sticks (which rights) do y'all have with respect to this item?"� Nosotros will use this analogy oftentimes.

We will primarily apply real belongings examples to illustrate these legal principles.

Estates in Holding

Fee Simple Absolute -- considered the highest form of ownership; to be considered as having a fee simple accented, the owner(s) must accept these 3 rights in the property.

• Fee -- potentially infinite duration (could own it forever if the owner(s) could live that long)
• Unproblematic -- no limits on inheritability (the owner(s), upon their decease, tin can bequeath (volition) the holding to whomever they wish)
• Absolute -- not subject area to a condition that will finish the possessor's interest (there is no limitation or qualification that will have away the possessor(s)' interest -- this concept is discussed later on and will be clearer at that fourth dimension)

Northward Dakota statute -- "Every manor of inheritance is a fee, and every such manor, when non defeasible or conditional, is a fee simple or an absolute fee."�North.D.C.C. �47-04-04

At that place are situations where an owner does not have a fee simple absolute.�The next three examples illustrate a few of these situations.

See illustration of the idea that the package of rights is divided between two "onwers."

Fee Simple Determinable -- annotation that this type of ownership is not "accented"

• A fee simple determinable can be described as a qualification on the owner's interest; that is, the owner's involvement volition terminate if the qualification or status is met; encounter N.D.C.C. � 47-02-03.
• Equally part of the sale of property, a landowner has the right to impose restrictions on its future use as long every bit the restrictions are not contrary to public policy. 263 N.W. 721
• Example based on a Missouri instance; 1998 courtroom case interpreting a 1925 deed.
  • The "qualification" in this case was that the buyer of the land would sell electricity to the seller of the state.
• Too run across a Minnesota case
  • The "qualification" in this case was that the country must be used for a railroad.
• A fee simple determinable is followed by Possibility of Reverter; that is, someone has to have the right (a "stick in the bundle") to take this propery (e.k., country) if the current possessor violates or fails to fulfill the qualification or condition. The right to seize the holding if the qualification or condition is non met (that "stick in the bundle") is chosen a possibility of reverter.

Fee Simple Subject to Condition Subsequent -- some other type of ownership that is not "absolute;" similar to (but non identical to) a fee simple determinable

• Again, a qualification on the possessor'southward interest; see Due north.D.C.C. �47-02-03.
• Followed by a Right of Entry for Condition Cleaved or a Power of Termination; remainderperson must deed to terminate the owner's interest.

Although these two types of estates ( Fee Simple Determinable and Fee Simple Field of study to Condition Subsequent ) may not be mutual, they practise be, they are legal, and they can lead to unexpected results if the possessor is unaware that such a limitation had been imposed by a previous possessor.�As discussed in afterward sections, these estates are examples of why it is critical that anyone who owns land (or is in the process of acquiring ownership) accept steps to determine which "sticks in the parcel" (what holding rights) they own or are acquiring.

A belongings owner cannot impose unreasonable limits that would prohibit future owners from transferring property rights to others. For example, the Rule Against Unreasonable Restraints on Breach illustrates this concept. As a Missouri court explained, this rule "is designed, 'to prevent the inalienability of present or future vested interests.' ... Although not every restraint is declared a violation, this dominion is based, amongst other reasons, upon the desirability of keeping real property responsive to the current exigencies of its current benign owner and the 'desirability of fugitive the retardation of the natural development of a community past removing property from the ordinary channels of trade and commerce.' extract from Cole v. Peters, Missouri Courtroom of Appeals Western District, case number 56013 (search for 56013). Also see N.D.C.C. §47-02-26.

Life Estate -- type of ownership that does not include the "simple" right; that is, the current "owner" (life tenant) is not able to specify who will receive the property at the time of his or her death.

• Buying of the property, when the life tenant dies, will transfer to the person or persons holding the time to come interest.
  • Simple instance of a life estate: Person A owns a fee simple absolute in a tract of land. Person A wants to own the property until their decease; Person A also wants, later on their death, to have their spouse own (utilize/receive the income from) the property until the spouse dies, and then have the property owned by Person A'south children. In this state of affairs, Person A may prepare a volition that leaves a life estate to the spouse, and the residuum interest to the children. This arrangement assures 1) the surviving spouse has the benefit of the country for the remainder of the spouse'south life and 2) that the children will get the state afterwards the spouse dies.
• Life tenant has possession during beingness of the life estate; the person with the future involvement will acquire possession at the death of the life tenant.
  • Reversionary interest: future involvement held past grantor (person who gear up upwardly the life estate) (N.D.C.C. �47-04-09); Residue interest: future interest held by someone other than grantor (N.D.C.C. �47-04-x); in most cases, the future interest is a residuum involvement.
  • Estate of Hitz, 319 N.West.2d 137 (N.D. 1982) -- a father established a life estate with his spouse holding the life estate and a son holding the future involvement.
    • "Prior to John's death in 1962, he and his son, Frank, farmed the 880 acres of farmland owned past John. John's will provided that Frank was to receive a remainder interest in fee to 560 acres of the farmland subject to a life estate interest in John's wife, Magdalena Hitz. John'south will further provided nether paragraph iii that Frank was to receive a remainder involvement in another 160 acres, bailiwick to a life estate involvement in Magdalena, "provided that he shall pay" to John's son, Ludwig, the sum of $5,000. Paragraph four of John's will, the disputed provision in this example, provided that Frank was to receive a residuum interest in an additional 160 acres, bailiwick to a life estate in Magdalena, "provided that he shall pay" to John's girl, Ann Pecora, the sum of $4,000.
    • "Magdalena died on February eleven, 1980, at which time the life estate interest in the farmland which she received under John's will terminated.
    • "We believe that John's volition, when considered as a whole, indicates John'south intent that his farmland, upon Magdalena's death, should become to his son Frank, who had chosen to remain on the farm and pursue farming as his avocation. John's will further indicates his intent that his son, Ludwig, and his girl, Ann, should receive legacies of $v,000 and $four,000, respectively. The devise of farmland to Frank under paragraph's 3 and four of John's volition "provided that" Frank pay such legacies to Ludwig and Ann can be construed, consistent with John's intent that Frank receive all of the farmland while Ludwig and Ann receive monetary legacies, by interpreting the will equally placing an equitable lien upon that farmland for payment of the legacies."

• Electric current owner (the life tenant) has the right to utilise the holding during his/her lifetime -- including leasing it to someone else (N.D.C.C. �47-02-33); only upon the life tenant'due south death, the property will exist owned by the remainderperson; that is, the person(south) property the future involvement.

  • N.D.C.C. �47-02-33. Rights of owner of life manor . The owner of a life estate may apply the land in the aforementioned way equally the possessor of a fee elementary, except that the possessor of a life estate must do no act to the injury of the inheritance.

• Life tenant may not commit waste and is obligated to make repairs, pay interest on mortgage, and pay annual property taxes (Northward.D.C.C. �47-02-34).

  • Northward.D.C.C. �47-02-34. Life manor - Obligation to maintain belongings - Waste product - Taxes - Other charges and assessments. The possessor of a life estate must continue the buildings and fences in repair from ordinary waste and must pay the taxes and other almanac charges and a only proportion of extraordinary assessments benefiting the whole inheritance.
  • North.D.C.C. �32-17-22 . Waste - When actionable. If a guardian, tenant for life or years, joint tenant, or tenant in common, of real property, commits waste thereon, any person aggrieved by the waste matter may bring an activeness against the one committing waste therefor, and in such action there may exist judgment for treble damages, forfeiture of the estate of the political party offending, and eviction from the premises.
  • Ruggles v. Sabe, 2003 ND 159, 670 N.West.2d 356
    • "Ruggles owns a one-third vested balance in property located in Bowman County, North Dakota. Sabe currently holds a life manor, based on the life of a 3rd party from whom he purchased the life estate, and a two-thirds vested remainder in the same holding. Ruggles brought an action for conversion and waste product when she discovered Sabe removed an airplane hanger from the property and converted it for his ain use.
    • "Sabe removed the hanger from the property in which he holds a life estate and a two-thirds vested remainder. Equally a holder of a remainder interest, Ruggles protested the removal of the hanger. As the holder of the life estate, Sabe owed a duty to Ruggles, a remainderman. If removal of the hanger resulted in a diminishment of the balance interest, and then the remainderman is entitled to amercement for waste product."

• Life manor overrides the life tenant's will or, if the life tenant does non have a will, the intestate succession statute (Due north.D.C.C. chapter thirty.1-04); that is, the life tenant does not accept the "stick in the parcel" (the legal correct) to specify who will receive the belongings upon his or her decease.
  • Fifty-fifty though the life tenant'south will may state "all my property goes to the church building at the fourth dimension of my death," belongings in which the life tenant merely has a life estate will transfer to the remainderperson (regardless of what the life tenant's will specifies).
  • Life estate tin can exist an estate planning tool; east.g., a holding possessor (most likely with a fee elementary accented) could specify in his or her will that a life estate should transfer to the surviving spouse and that the future involvement should transfer to the children so that upon the death of the surving spouse, the property volition transfer to the children (as a fee simple absolute) regardless of what the spouse'southward will might specify.

• The death of the life tenant terminates the life estate and the remainderperson becomes the owner of the belongings; the ownership of the remainderperson is usually a fee elementary absolute.
  • How long into the future can a life estate (or series of life estates) be extended?�Could I create a life estate in my property for my surviving spouse, and then for my children, and then for my grandchildren?�Could I specify a series of life estates so that the side by side person(s) to have a fee simple absolute would be my not bad-grandchildren who are not yet built-in (and who may never exist if my descendants practise not have children)?
  • A property possessor cannot "string together an endless listing of life estates," such equally "to my surviving spouse for his lifetime, then to my children for their lifetime, and and so to my grandchildren for their lifetime, and then to my great-grandchildren..." Instead, the law requires that at some point in fourth dimension the ownership interests re-combine to the level of a fee simple absolute. This is generally known as the Rule Against Perpetuities. For case, run across N.D.C.C. §47-02-27.i.

• Life estate and time to come involvement (N.D.C.C. �47-02-11) can be transferred (e.g., sold), just the market will reflect the partial interest; transferring a life manor does not alter whose life volition be used to measure the duration of the life estate.�
  • If I buy your life estate today and you dice tomorrow, the holding will transfer to the remainderperson, thus I may not exist willing to pay much for your life estate if I think there is a good possibility yous may die before long.
  • I may not pay much for your time to come interest if I call back the life tenant volition live a long fourth dimension.

• Life estate and futurity interest merge if endemic by the same person (nearly likely merge into a fee elementary absolute).
  • "A merger occurs when a greater and a bottom manor see in the same person, and the lesser estate is said to merge into the greater estate."� Estate of Flynn, 2000 ND 24, 606 N.West.2nd 104

It may also be helpful to review S Dakota statutes that address Present and Time to come Interests in Holding (Chapter 43-three of South Dakota Codified Laws).

Concepts to remember

• The type of estate a grantee acquires is determined past the instrument/document (commonly a act) which transfers buying.
• You CANNOT TRANSFER More than THAN Yous OWN; you cannot transfer to someone else a belongings right that you do not have; due east.m., if I accept a life estate, I cannot transfer a fee simple absolute to you.
• No one ever has all "the sticks in the bundle;" even the possessor of a fee simple accented is subject to society'south (the goverment's) right to impose a property tax on the land, and to force yous to sell the property for a public purpose (i.east., eminent domain, discussed in a subsequent section).
• Property owners are expected to protect or affirm their property rights (that is, to human action like the owner); failure to timely assert your rights may foreclose you from beingness able to assert them in the future; it may even lead to you losing those rights to someone else (related concepts include statute of limitations, laches, adverse possession).
• The constabulary seeks to protect the right of property owners to sell or otherwise transfer all or a portion of their property rights.

Summary of Cardinal Points

• A fee uncomplicated absolute is the highest form of ownership, only even a person who holds a fee unproblematic absolute does not have all the "sticks in the bundle."
• A property owner can impose reasonable limitations on what future owners can do; the difficulty with this practice is keeping track of who owns which "sticks in the parcel."
• A life manor consists of a life tenant and a remainderperson.
• Part of the challenge of understanding property is understanding who owns which legal rights ("sticks in the packet").

The next page introduces concurrent ownership.

Last updated February fourteen, 2010

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Email David.Saxowsky@ndsu.edu

This material is intended for educational purposes but. Information technology is not a substitute for competent legal counsel. Seek appropriate professional advice for answers to your specific questions.

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Source: https://www.ndsu.edu/pubweb/~saxowsky/aglawtextbk/chapters/property/Estatesproperty.html

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