1. Rule Against Perpetuities Boston College Law School October 27, 2010
Property Law

2. 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

3. Rule Against Perpetuities
“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

4. 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 A’s 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 …”

5. 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”

6. 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.”

7. 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”

8. 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

9. Next Assignment Next assignment Practice Exam IV.C.2 – Limitations
1 hour open book issue spotter
On material covered so far
Ungraded
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