to B alone the option to purchase for $50K at any “A time” Some contracts are subject to including (option RAP, options to purchase when “vests” exercised)… thus, using B as could NOT after death, measuring life, option vest … B’s making option valid… BUT, if were (and NOT is option B option … “to B” “to alone”), presumed to be transferable AND could beyond making vest RAP period, void option to B, subject to option in A to repurchase for “A $50K” is likely treated as an which, in Option to repurchase option to purchase, this case, would be void under (since presumed RAP transferable)… BUT, could arguably be considered a (retained option to repurchase PT … in A, the which would NOT be subject to (and, thus, transferor), RAP valid) leases to B for 65 yrs., with option to purchase for $50K during the “A term” Granted, could beyond option to purchase vest RAP period… BUT, b/c can ONLY within during lease term, it is NOT option vest … subject to as per lease option exception RAP “A to B and assigns under an installment land sale contract… A retains legal title until paid in full” IS subject to AND, b/c contract could Installment land sale contract RAP… be paid off beyond would be RAP period, void… BUT, arguable that retention of legal title is a security interest, … A’s which is NOT subject to RAP in trust, income to A for life, then income to children, then principal to “A A’s grandchildren, reserving to A the power to revoke the trust” A’s does NOT start until is exercised/given RAP period power to revoke A’s up… thus, if A dies w/o exercising then interest is … power to revoke, valid… BUT, if A revokes trust before death (OR, if A never had power to … then interest is void revoke), to B Charity, but if cease use for hospital purposes, to C “A Charity” As per b/c would shift from charity-to-charity, it is charitable exception, EI valid (exempt from RAP)… BUT, if either B or C was NOT a charity (AND, city/govt. constitutes … charity), then does NOT apply, regardless of possible charitable exception charitable purpose
“A to B alone the option to purchase for $50K at any time” Some contracts are subject to RAP, including options to purchase (option “vests” when exercised)… … thus, using B as measuring life, option could NOT vest after B’s death, making option valid… … BUT, if option were “to B” (and NOT “to B alone”), option is presumed to be transferable AND could vest beyond RAP period, making option void “A to B, subject to option in A to repurchase for $50K” Option to repurchase is likely treated as an option to purchase, which, in this case, would be void under RAP (since presumed transferable)… … BUT, option to repurchase could arguably be considered a PT (retained in A, the transferor), which would NOT be subject to RAP (and, thus, valid) “A leases to B for 65 yrs., with option to purchase for $50K during the term” Granted, option to purchase could vest beyond RAP period… … BUT, b/c option can ONLY vest within during lease term, it is NOT subject to RAP as per lease option exception “A to B and assigns under an installment land sale contract… A retains legal title until paid in full” Installment land sale contract IS subject to RAP… AND, b/c contract could be paid off beyond RAP period, would be void… … BUT, arguable that A’s retention of legal title is a security interest, which is NOT subject to RAP “A in trust, income to A for life, then income to A’s children, then principal to A’s grandchildren, reserving to A the power to revoke the trust” RAP period does NOT start until A’s power to revoke is exercised/given up… … thus, if A dies w/o exercising power to revoke, then interest is valid… … BUT, if A revokes trust before death (OR, if A never had power to revoke), then interest is void “A to B Charity, but if cease use for hospital purposes, to C Charity” As per charitable exception, b/c EI would shift from charity-to-charity, it is valid (exempt from RAP)… … BUT, if either B or C was NOT a charity (AND, city/govt. constitutes charity), then charitable exception does NOT apply, regardless of possible charitable purpose
Property-2_Coskran-Spring-2009.docx