HB1270 (2008) Detail

(New Title) relative to limiting certain future interests in real property.


CHAPTER 228

HB 1270 – FINAL VERSION

05Mar2008… 0503h

2008 SESSION

08-2465

05/10

HOUSE BILL 1270

AN ACT relative to limiting certain future interests in real property.

SPONSORS: Rep. McEachern, Rock 16; Rep. Splaine, Rock 16

COMMITTEE: Judiciary

AMENDED ANALYSIS

This bill limits the creation of possibilities of reverter, rights of re-entry, and executory interests to real estate conveyances with a public or charitable purpose. The bill also regulates the manner in which such existing future interests may be preserved and enforced.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

05Mar2008… 0503h

08-2465

05/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eight

AN ACT relative to limiting certain future interests in real property.

Be it Enacted by the Senate and House of Representatives in General Court convened:

228:1 Statement of Purpose. In conveyances of real property the use of possibilities of reverter, rights of re-entry, or executory interests unduly burdens the free alienability of property when there is no public or charitable purpose or use involved. Future creation of such interests should be limited, and preservation and enforcement of those which continue to exist should be regulated.

228:2 New Section; Limitations on Possibilities of Reverter, Rights of Re-entry, and Executory Interests. Amend RSA 477 by inserting after section 3-a the following new section:

477:3-b Limitations on Possibilities of Reverter, Rights of Re-entry, and Executory Interests.

I. This section applies only to legal future interests in real property created by deed, will, or power of appointment and not to any beneficial interests created by or through trusts. This section shall not apply to rights of forfeiture or re-entry held by lessors or mortgagees, nor to conveyances of standing trees governed by RSA 477:35-a or RSA 477:35-b, nor to options to purchase real estate, whatever their form.

II.(a) After December 31, 2008, no legal possibility of reverter, right of re-entry, or executory interest in real property may be retained or created unless either the grantor or the grantee is a public or charitable organization. Any language purporting to retain or create such a future interest shall be void. Language which also creates a covenant may be enforced as such by an action at law or equity but without forfeiture.

(b) For purposes of this section, an organization is public or charitable if it is:

(1) The state of New Hampshire.

(2) A political subdivision or municipal corporation of the state of New Hampshire.

(3) A corporation organized under RSA 292, a religious organization, or a not-for-profit corporation chartered by act of the New Hampshire general court or United States Congress.

(4) A nonprofit organization qualified under section 501(c) of the Internal Revenue Code of the United States, as amended.

(5) A trustee as defined in RSA 7:21, VIII.

III. Renewal declarations shall be required in certain cases.

(a) Unless the original grantor or grantee of the interest was, or the present owner of the interest is, a public or charitable organization, any existing possibility of reverter, right of re-entry, or executory interest in real property shall become void unless renewal declarations are filed in the appropriate registry of deeds as hereinafter provided. Covenants as such are not subject to renewal and remain enforceable by an action at law or equity but without forfeiture.

(b) Times of filing future interests under this section shall be as follows:

(1) A declaration of renewal of an existing possibility of reverter, right of re-entry, or executory interest in real property that was retained by or granted to a natural person need not be recorded while owned by that person. Any subsequent heir, devisee, grantee, creditor, or other successor to such interest shall record a declaration within 3 years after acquiring it or the interest shall become void.

(2) A declaration of renewal of an existing possibility of reverter, right of re-entry, or executory interest in real property other than those retained by or granted to a natural person shall be filed on or before January 2, 2011, and if such declaration is not filed within such time, the interest shall become void.

(3) A declaration shall be recorded once in every 25 years after the initial declaration is filed, and any interest for which such a declaration is not filed shall become void 25 years after the filing of the last renewal declaration.

(c) A declaration shall be signed and acknowledged by the declarant in the same manner as a deed and contain:

(1) A statement that the declarant owns all or part of a future interest reserved or created by a specified instrument and the declarant’s current mailing address.

(2) The date of that instrument and the book and page, probate file, or other specific place where the instrument is recorded.

(3) The names of the owner or owners of the property rights subject to the future interest as of the time the declaration is filed.

(d) Each declaration shall be indexed in the grantor index under the name or names of the persons stated therein to be the owners of the property right subject to the future interest at the time of filing.

(e) The original declaration shall be returned to the declarant after recording in the same manner as a deed.

(f) A declaration which is actually recorded and correctly indexed shall be effective despite failure to name all present owners of the property subject to the future interest so long as at least one owner was correctly identified.

(g) The fee for filing a declaration shall be the same as for a deed.

IV. Unclaimed future interests of defunct public or charitable organizations shall be treated in the following manner: Whenever it shall appear that a public or charitable organization holding a possibility of reverter, right of re-entry, or executory interest has been defunct for more than 3 years with no successor to the future interest provided for or action commenced to determine a successor, the director of charitable trusts shall either commence such an action or, if it appears to be in the public interest, release the future interest to the owners of the underlying estate, with or without conditions.

228:3 Real Actions; Limitation of Actions. Amend RSA 508:2 to read as follows:

508:2 Real Actions.

I. No action for the recovery of real estate shall be brought after 20 years from the time the right to recover first accrued to the party claiming it or to some persons under whom [he] the party claims.

II. No action for the recovery of real estate pursuant to rights based on a possibility of reverter, right of re-entry, or executory interest shall be brought after 5 years from the time the right to recover possession or the right of re-entry first accrued to the party claiming it or to some persons under whom the party claims.

228:4 Effective Date. This act shall take effect January 1, 2009.

Approved: June 16, 2008

Effective Date: January 1, 2009