A deed states, 'to Sunrise Church, but if the property is ever used for commercial retail, Grantor may re-enter and retake the property.' Which statement about the church's estate is NOT correct?
Correct Answer
C) Title automatically returns to the grantor the moment retail use begins
The language but if the property is ever used for commercial retail, the grantor may re-enter creates a fee simple subject to a condition subsequent, and the interest the grantor keeps is a right of entry, also called a power of termination. Because that interest is an option rather than a reversion, title does not return to the grantor by itself when the condition is broken: the grantor must act to exercise the right, and may also waive it or be barred by delay. The statement that title returns automatically the moment retail use begins is therefore the one that is not correct.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
A freehold estate conveys ownership rights, while a leasehold estate grants the right to possess and use property for a specific period without ownership.
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