Reverter Clause in a Deed to a Church Was Upheld

1 1 2011 Cengage Delmar Learning. All Rights Reserved CHAPTER 1 INTRODUCTION TO THE LAW OF REAL PROPERTY Reverter Clause in a deed to a Church Was Upheld The deed provided that the property was conveyed to a Church to be used for Church purposes and that in the event the property was not used for Church purposes, all right, title, and interest in the property would revert to the grantor. The Supreme Court of Georgia Upheld the Reverter Clause . See First Rebecca Baptist Church v.

2 Atlantic Cotton Mills, 263 Ga. 688, 440 2d 159 (1993). Reverter Clause in deed to School Is Enforceable The Supreme Court of Georgia Upheld a Reverter Clause where the deed specified that school was to be built on the property, and a forfeiture would result should the property not be used for school purposes. Rustin v. Butler, 195 Ga. 389, 24 2d 318 (1943). deed Covenants For an excellent case discussing the various deed covenants in complete detail, see Brown v. Lober, 75 Ill. 2d 547, 389 2d 1188 (1979).

3 Transfer Subject to Building Code Violation Not Violation of deed Covenant The court held that when a seller had transferred property with knowledge of building code violations affecting the property he did not breach covenants in the seller s warranty deed . The court found that the covenant of seisin was not breached and that the covenant against encumbrances was not breached. The court held that under Illinois law a building code violation is not deemed an encumbrance. In addition, since the city had not brought any action to evict the property owner at the time the suit was filed there had been no breach of the covenant of quiet enjoyment.

4 Monti v. Tangora, 99 Ill. App. 3d 525, 425 2d 597 (1981). Marketability of Title with Reverter Clause Generally a title to real property that contains a Reverter Clause such as a fee simple determinable or a fee simple on condition subsequent renders the title unmarketable, and a purchaser who signed a contract obligating himself to purchase marketable title may be able to rescind the contract. See Hurd v. Becker, 165 So. 2d 420 (1964). This is a good case that discusses the marketability of title where there is a Reverter Clause and also discusses the distinction between a fee simple on condition subsequent and a fee simple determinable.

5 In this case, due to certain language in the contract, even though the title contained a Reverter Clause , the purchaser was still bound to perform under the contract. 2 2011 Cengage Delmar Learning. All Rights Reserved Waste A life tenant owning property containing timberland may thin out the timber of a wood s pasturage or cut off all the timber and cultivate it as a field. If the cutting is not wanton or malicious and does not amount to equitable waste, it cannot be restrained by the owner of the fee, even if the life tenant sells the timber.

6 See In re Paine s Estate, Williams v. Garnett, 128 Florida 151, 174 So. 430 (1937). Failure of a life estate owner to pay taxes on the property may constitute waste. Chapman v. Chapman, 526 So. 2d 131 (1988). The removal by a life estate owner of oil from the land may constitute waste. Carter Oil Company v. McQuigg, 27 F. Supp. 182 (1939). Life Estate Owner s Right to Contribution An owner of a life estate who pays off a mortgage that existed on the property prior to the life estate owner acquiring title to the property is entitled to contribution from the owner and holder of the remainder interest in the property.

7 See Coppens v. Coppens, 395 Ill. 326, 770 2d 54 (1946).