Property Law

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Property Law

• Rule Against Perpetuities
• Boston College Law School
• October 29, 2009

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Rule Against Perpetuities

• Policy interests
• Prevent dead hand control
• Restrictions on current use of property
• Ability to move property to more valued use
• But enable some ability to control grants

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Rule Against Perpetuities

• Rule
• No interest is good unless it must vest, if at
  all, no later than 21 years after the death of a
  life in being at the creation of the interest
• Example
• O to A, so long as used as a hospital, then to B
• May vest more than 21 years after O, A B dead

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Rule Against Perpetuities

• Applies to
• Contingent third-party interests
• Executory interests (O to A, so long as used for
  hospital, then to B)
• Contingent remainders (O to A for life, then to
  B if B graduates)
• Vested remainders subject to open (O to A for
  life, then to As children)
• Options
• Does not apply to
• Vested interests
• Reversions (O to A for life)
• Vested remainders (O to A for life, then to B)
• Vested remainders subject to divestment (O to A
  for life, then to B, but if ...
• Contingent interests in the grantor
• Possibility of Reverter (O to A, so long as used
  for a hospital)
• Right of Re-entry (O to A for use as hospital,
  but if not, then B has right

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Rule Against Perpetuities

• Elements of rule
• must vest if at all
• Invalid if any possibility that might vest
  outside time
• Does not matter if actually vests within time
• within 21 years of death of life in being at
  time of grant
• Look to lives mentioned in the grant
• Corporations have no life

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Rule Against Perpetuities

• Examples
• O to A, so long as used for hospital
• O to A, so long as used for hospital, then B
• O to A for life, then to B if B graduates
• O to A for life, then to B, but if B marries C,
  then the property reverts back to O
• O to A for life, then to the children of B
• O to A for life, remainder to the first daughter
  of A to become president of the U.S.

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Rule Against Perpetuities

• Consequence strike offending language
• Potentially different consequences
• O to A so long as used for residential purposes,
  then to B
• Becomes O to A so long as used for residential
  purposes
• O to A, but if for non-residential purposes,
  then to B
• Becomes O to A

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Rule Against Perpetuities

• Modifications
• Wait and See Approach
• Wait to see if interest actually vests w/in time
  period
• E.g. O to A for use as hospital, then B
• Uniform Statutory Rule Against Perpetuities
• Like wait and see approach
• Except use 90-year period from grant
• Statutory Cut-offs for Grantor Rights
• Possibility of reverter
• Right of re-entry
• Marketable Title Acts

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Next Assignment

• Next assignment
• IV.C.2 Rule Against Perpetuities
• Through p. 553
• Make up class
• Friday, 2-305 p.m., EW115B
• Wednesday students on call
• Practice exam
• Wednesday, 11/4