Real Property hypotheticals are normally structured this way: (1) at the outset of the fact pattern, you are told that X owns certain property (with a description of the deed language) or is granted property (with a description of the granting language); (2) an event or a series of events occurs; and (3) you are asked to explain the state of the property (i.e., who owns what) after the end of the series of events.
“In 2020, Moe granted Stoogeacre ‘to Curly and his heirs, but if the property is ever used to film a comedy movie, to Larry and his heirs.’ In 2022, Curly rented out the property to a movie studio to film the feature comedy film ‘The Return of the Three Stooges.’ Upon hearing this, Larry commences an action to eject Curly from Stoogeacre and quiet title to the property in him. Who owns Stoogeacre?”
To properly and completely analyze the above problem, you first need to recognize four things: (1) Curly has a fee simple subject to an executory interest; (2) Larry has a shifting executory interest; (3) Larry’s executory interest is subject to the Rule Against Perpetuities; and (4) Larry’s executory interest violates the Rule Against Perpetuities (because Larry’s interest might vest more than 21 years after some life in being at the time the interest was created). That being the case, the gift to Larry fails, and Curly is the owner of the property.
NOTE: The analysis is entirely dependent on determining the present possessory and future interests involved. For example, if the future interest were not an executory interest in Larry, but rather a possibility of reverter in Moe, the Rule Against Perpetuities would not apply, and the reversionary interest to Moe would be valid.
Therefore, in analyzing a Real Property hypothetical, it is important to first identify the present possessory estates and future interests that exist at the outset of the hypothetical. Once you have identified those interests, you can then proceed to analyze the legal effect of the events described in the hypothetical.
This flow chart will walk you through the steps for determining the present possessory interest in a hypothetical. Our other Real Property flow charts will help you determine any future interest or concurrent estates as well.