An owner sold a parcel of real estate to a buyer with the stipulation that the buyer was not allowed to sell alcohol from the prem- ises. The buyer sold the property 10 years later to a buyer who converted the build- ing into a convenience store that sold beer. Should the owner or owner’s heirs claim a right of re-entry, what would be the basis for the lawsuit?
Audio Lesson
Duration: 2:46
Question & Answer
Review the question and all answer choices
Violation of a covenant
A covenant is a contractual promise that runs with the land and is enforceable through an injunction or damages, not through forfeiture of title — the question specifies that the owner seeks a 'right of re-entry,' which is a remedy for a condition subsequent, not a covenant violation, making this classification legally incorrect.
Violation of a condition subsequent
Violation of a condition precedent
A condition precedent is a condition that must be satisfied BEFORE a property right vests or a contract becomes effective — it precedes the transfer, not follows it; since the property was already conveyed and the restriction applied to future use after the sale, this is a post-conveyance condition, not a pre-conveyance one.
Violation of the statute of frauds
The Statute of Frauds requires certain contracts, including real estate contracts, to be in writing to be enforceable — it governs the form of the agreement, not the nature of a property condition or the grantor's right to reclaim property upon a use violation, making it entirely inapplicable to the legal basis for a right of re-entry lawsuit.
Why is this correct?
A fee simple subject to a condition subsequent is created when a grantor conveys property with a restriction and retains a 'right of re-entry' (also called a 'power of termination'), which must be actively exercised if the condition is violated — the estate does not automatically terminate. The original deed's prohibition on selling alcohol is a classic condition subsequent, and when the subsequent buyer violated it by selling beer, the original owner or heirs did not automatically regain title; they must file a lawsuit to exercise their right of re-entry. California courts, applying common law property principles codified in California Civil Code sections governing defeasible fees, would recognize this as a condition subsequent based on the language of the original conveyance and the grantor's retained right of re-entry.
Deep Analysis
AI-powered in-depth explanation of this concept
Fee simple defeasible estates are property interests that can be terminated upon the occurrence or non-occurrence of a specified event, and they come in two primary forms: fee simple determinable (which terminates automatically when the condition is violated) and fee simple subject to a condition subsequent (which requires the grantor to take affirmative legal action to reclaim the property after a violation). The distinction is critical because in a condition subsequent, the grantee retains title until the grantor exercises the 'right of re-entry' or 'power of termination' through a lawsuit or formal legal action — the estate does not end automatically. This rule exists to prevent automatic forfeiture of property rights without due process, giving the grantee an opportunity to cure the violation and requiring the grantor to affirmatively assert their rights within the statute of limitations. The question's explicit mention of 'right of re-entry' is the definitive signal that a condition subsequent is involved, because that specific legal remedy belongs exclusively to this type of defeasible fee.
Knowledge Background
Essential context and foundational knowledge
The distinction between fee simple determinable and fee simple subject to a condition subsequent evolved in English common law as courts tried to balance grantor control over land use with grantee security of title. Early English courts struggled with automatic forfeiture (determinable fees), which could strip a grantee of title without warning, and developed the condition subsequent as a more equitable alternative requiring affirmative grantor action. In American law, the Restatement (First) of Property formalized these distinctions, and most states including California follow the common law framework. The right of re-entry is subject to statutes of limitations in most states — in California, Civil Code Section 885.010 et seq. governs the expiration of powers of termination, requiring them to be recorded or exercised within specific time periods to remain enforceable, which adds practical urgency to the grantor's decision to sue.
Podcast Transcript
Full conversation between instructor and student
Instructor
Hey there, how's it going today?
Student
Hi! I'm doing well, thanks. I was actually hoping to go over a tough question from the real estate license exam. It's about property ownership and restrictions.
Instructor
Great, let's hear it. What's the question?
Student
The question is about an owner who sold a piece of real estate with the stipulation that the buyer couldn't sell alcohol on the premises. The buyer later sold the property and the new buyer converted it into a convenience store that started selling beer. If the original owner or their heirs want to claim a right of re-entry, what's the basis for the lawsuit?
Instructor
That's a challenging one. It's testing your understanding of property restrictions and the different types of remedies available. Let's break it down. You have four options: violation of a covenant, violation of a condition subsequent, violation of a condition precedent, and violation of the statute of frauds.
Student
Right, and I think the key is understanding what kind of restriction was placed on the property. Was it a promise, a future condition, or something else?
Instructor
Exactly. The restriction here was a condition subsequent, which means the buyer had to comply with the restriction, or the original owner could reclaim the property. Since the buyer didn't comply, the original owner has a right of re-entry. So the correct answer is B, violation of a condition subsequent.
Student
Oh, I see. So the condition subsequent is like a 'get-out-of-jail-free' card for the original owner if the buyer breaks the rule?
Instructor
That's a good way to think about it. It's like a 'museum pass' with rules: 'You can visit as long as you don't touch the art.' If you do touch the art, the museum has the right to escort you out, but they must take action to do so. This is the same concept with the property and the restriction on alcohol sales.
Student
That's a helpful analogy. So why are the other options wrong?
Instructor
A covenant is a promise to do or not do something, and if violated, the typical remedy is damages, not re-entry. A condition precedent is something that must happen before the transfer of ownership, like a closing condition. The statute of frauds is about the requirement for certain contracts to be in writing, which isn't the issue here.
Student
Got it. So it's all about the specific type of restriction and the remedy it provides.
Instructor
Exactly. And remember, for property restriction questions, think about the remedy: right to reclaim property = condition subsequent; damages = covenant; must occur before transfer = condition precedent.
Student
Thanks for breaking that down. I'll definitely keep that in mind for the exam.
Instructor
You're welcome! I'm glad I could help. And remember, keep practicing and studying, and you'll do great. Keep up the good work!
Use the phrase 'SUBsequent = SUe' to remember that a condition subsequent requires the grantor to SUe (take affirmative legal action) to get the property back — it does not happen automatically. Contrast this with a fee simple determinable, where the property reverts automatically ('Determinable = Done automatically'). The word 'subsequent' tells you the condition comes after the grant, and the grantor must subsequently act to enforce it.
When encountering property restrictions, ask: 'Is this a promise (covenant) or a rule with a right to reclaim if broken (condition subsequent)?'
Whenever a real estate exam question mentions a 'right of re-entry' or 'power of termination,' the answer is always condition subsequent — these terms are legally synonymous with that type of defeasible fee and will never appear in the context of a determinable fee or a covenant. Train yourself to circle the words 'right of re-entry' in the question stem, because that phrase is your guaranteed signal to select condition subsequent regardless of the other facts presented.
Real World Application
How this concept applies in actual real estate practice
In 1990, a California property owner sold a commercial building in Fresno with a deed restriction stating 'this conveyance is made upon the condition that no alcoholic beverages shall be sold on the premises, and if this condition is violated, the grantor reserves the right to re-enter and reclaim the property.' In 2000, the buyer sold the building to a convenience store operator who began selling beer and wine. The original grantor's daughter, now the heir, discovers the violation in 2003 and files a lawsuit in Fresno County Superior Court to exercise the right of re-entry — without filing suit, she has no claim, because the estate did not automatically revert to her family upon the beer sales beginning.
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