Waste

A variety of waste is tested in Property questions on the MBE. Perhaps the one that is tested most often is permissive waste but three types of waste are fair game and this post will outline each of them. 

The overarching idea here is that there will be a life tenant and a future interest holder. The life tenant will be limited in how he/she can use the land because if used in certain ways the future interest holder will be harmed. So the idea is to figure out that balance. 

Affirmative Waste: This is sometimes called voluntary waste and these terms are interchangeable. Exploitation of natural resources by a life tenant is limited to only a few situations. A life tenant can exploit natural resources on the land if necessary for repair or for maintenance or if the land is only suitable for exploitation. If neither of those are true the life tenant is not out of luck provided that such exploitation is expressly or impliedly permitted by the grantor. Importantly, there is a doctrine called the 'open mines doctrine' which states that if mining was done on the land prior to the life tenant taking possession then the life tenant can continue mining. The life tenant, however, will be limited by only having the right to mine on mines that were already open when the life tenant took possession.

Permissive Waste: A life tenant is obligated to preserve the land and structures in a reasonable state of repair. Tested quite often is the idea that a life tenant must pay interest on mortgages (though the future interest holder is generally obligated to pay the principal). The life tenant must also pay ordinary taxes on the land and pay special assessments for public improvements of short duration. All of these obligations placed on the life tenant are limited to the extent of the income or profits generated from the land or the reasonable rental value of the land. In other words, if no income or profits are generated and if the land is such that the reasonable rental value of the property is very low, then the obligations placed on the life tenant to make any payments will be similarly low.  A life tenant is not obligated to insure the property for the benefit of the future interest holder and is not responsible for damages caused by a third-party tortfeasor. 

Ameliorative Waste: This is the one I found most interesting/strange when first learning it. Ameliorative waste is a change that benefits the property economically and yet at common law was still considered waste that was actionable. For MBE purposes, a life tenant may alter or demolish existing buildings if the market value of the future interests is not diminished and either the future interest holder does not object or a substantial and permanent change in the neighborhood conditions has deprived the property in its current form of reasonable productivity and usefulness. A distinction that might be worth noting is that a leasehold tenant (as opposed to a life tenant) will remain liable for all ameliorative waste even if the conditions stated here are satisfied.