30th March 2023
Sometimes there are odd things trending on social media.
A few days ago it was “Catford and Catford Bridge” – and this morning it was “the rule against perpetuities”.
This rule is the law student’s equivalent to the history student’s Schleswig-Holstein question, in that few feel certain they really understand it.
But in essence, it is the means by which the courts can prevent certain property arrangements from having effect too far into the future.
The main encyclopedia of English law describes the rule as follows:
“the rule against perpetuities […] which prevents the creation of interests in property which are to vest at too remote a time”.
And, looking it for the purpose of this post, I learn perpetuity in England is now set at 125 years.
In Florida, however, there seems to have been no such legislative intervention – and this brings us to today’s trending news.
The clause about King Charles III is absolutely real. The agreement — from the 2/8/23 Reedy Creek board meeting — can be found on https://t.co/6ZQMDUaVME. It appears to have been posted days after @GovRonDeSantis signed the law he says was “ending the Corporate Kingdom”. 5/ pic.twitter.com/CT9hYyIr28
— Mike DeForest (@DeForestNews6) March 29, 2023
In essence, the lawyers here have adopted an eye-catching variation of the living-person-plus-21-years formulation which some lawyers have used as a way around the rule against perpetuities.
The formulation provides the means of reckoning an end-date by reference to someone now alive.
Given the most recently born of King Charles’s descendants is Princess Lilibet, who was born in 2021, then if she lives to seventy-five the term of the declaration would be at least a hundred years.
I am not a Florida lawyer, but looking at the thread as a whole it would appear that the Reedy Creek Improvement District Board’s lawyers realised there was the possibility of any “in perpetuity” provision being challenged and so they prudently provided the reference to King Charles’s descendants as the fallback position if that challenge is successful.
And presumably those lawyers selected the descendants of King Charles now living because (a) their birthdates are matters of public knowledge and (b) the most recent birth of a descendant now living was 2021.
It would have made less sense if a similar provision had been adopted in say 2012, before the birth of Prince George, as the most recent descendant would then have been Prince Harry in 1984.
I have no idea if such a specific fallback provision is common in legal instruments in America or elsewhere, but contracts providing for what happens if a particular provision is unenforceable is a commonplace in many contracts.
And any sensible lawyer knowing that the rule against perpetuities would be invoked would insert a fallback position.
It is only the eye-catching example which makes this one seem that different.
*
The irony here is that this is not the first time Disney have been playful with terms of years for property rights.
Disney has form.
You may recall the Mickey Mouse Protection Act.
One promoter of the legislation, Mary Bono said:
“Actually, Sonny [Bono] wanted the term of copyright protection to last forever.
“I am informed by staff that such a change would violate the Constitution. […]
“As you know, there is also Jack Valenti’s proposal for term to last forever less one day.”
Alas, Disney did not get their way that time.
*
Perhaps no lawyer has ever legally defined “happily ever after”.
But from Disney’s perspective, “happily ever after” can be now be defined as twenty-one years after the death of the last survivor of the currently living descendants of the King of England, or even “forever less one day”.
And that is the magic of the law of property.
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I wasn’t aware that there was a King of England. Of the United Kingdom, and of Canada, and Australia, and assorted other places. But the last monarch of England was Anne.
Even if those Floridians got it correct, it would still be utterly ludicrous.
Perhaps it would have been preferable to have used the Duke of Normandy (Jersey and Guernsey) or Lord of Man (IoM).
Google thinks “Happily Ever After” lasts for 18 minutes, which may be realistic – indeed, optimistic – in many relationships, but is somewhat short for a legal agreement.
As I understand it, in some US states, contracts occasionally use a “presidential lives” clause instead of a “royal lives” clause to get around the rule against perpetuties.
But I suppose it would have been less amusing here to refer to 21 years after the death of the last survivor of the currently living descendants of Donald Trump, or of Joe Biden.
What is the governing law of this contract? I think the “Florida Uniform Statutory Rule Against Perpetuities” entails a 90 year “wait and see” period, but up to 360 years or 1000 years in some cases. http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0689/Sections/0689.225.html
“Google thinks “Happily Ever After” lasts for 18 minutes …”.
I love the idea of this!
Ot King of Canada.
Since England is part of the United Kingdom, Charles III is the king of England — just not only (England), but also…
But yes, it does all sound ludicrous, however you slice it.
does the “living as of the date of this Declaration” refer to the survivor or to King Charles III? wording’s kind of ambiguous, no?
Not ambiguous, as the fact that Charles is king would mean he is alive at the date of the Declaration.
No. If the royal lives clause had referred to the issue of Queen Elizabeth II or King George VI living at the date of the declaration it would have been perfectly valid. Naming a monarch doesn’t mean that the monarch is alive at the moment you name them.
But it’s clear in the context that the phrase “living as of the date of this Declaration” qualifies “descendants”; no other interpretation makes sense.
It may not be ambiguous, but it seems it is potentially uncertain. What happens if eventually someone comes forward claiming to be an illegitimate child of one of the people in the group? Assuming the Royal Family simply dismiss the claim, preventing it being properly investigated, a third party agreement such as being discussed here would become dependent on fact not generally known. In times past, this would not have been a problem because parentage would depend on marriage or acknowledgement, but nowadays it’s seen instead as an objective fact.
“And, looking it for the purpose of this post, I learn perpetuity in England is now set at 125 years.”
The geographical extent of the Perpetuities and Accumulations Act 2009 is England & Wales, not just England.
I am not a Welsh lawyer and so I would not presume to state the law of Wales.
I do, however, know that the law in Wales can no longer be always taken to the same as the law of England.
And the reason I rarely say “England and Wales” is so that I do not irk Welsh followers with my presumption.
I once got marks deducted in the LPC for amending a clause that said “England and Wales” to “England”. My explanation that divergence might make the clause uncertain was not accepted.
In contract drafting I now usually omit “and Wales” unless there is a reason to include it, given there is divergence.
There is, of course, Section 301 and Schedule 6 of the Copyright, Designs and Patents Act 1988. Peter Pan, rather than Mickey Mouse.
There is an equivalent for one of the largest equity funds in the US – SDPR S&P500 that manages $368bn. The trust under which the assets are held had a similar issue and so it expires 21 years after the death of 12 people who are mainly the children of the team who set it up in 1993.
The duration based on the lifespan of descendants of Charles III seems to be open ended, whereas the equity funds equivalent (as described) is for one generation only.
It’s not open-ended. It’s the descendants *now living* of Charles III — a closed class to which no new members may be added.
However large the class, the resulting period will always be one human lifetime plus 21 years. You maximise the chances of that being a reasonably long lifetime by having a class with more than a few members, and which includes some very young people. The equity funds class is described as *mainly* the children of the establishing team but, if they had any grandchildren or more remote descendants it would have been rational and sensible to include them in the class. That may hav been what the “mainly” qualification refers to.
This seems like it could lead to some sticky navigating of the staunchly conservative crowd that Disney was circumnavigating – the definition of “living”. Legally, I’m sure that is well defined and would pose no ambiguity. But let’s suppose King Charles and a partner had fertility issues and there were frozen embryos somewhere. The conservatives would have to admit that life didn’t begin at conception if they ever wanted to enforce the end of the “living descendent” clause.
So I have another problem which may or may not be related. I live in Leasehold property where the lease is 999 years. How is this related to the law of perpetuities. I puzzle about what it means to my heirs, if they would hang on to the apartment, several floors up, which may or may not exist even as little as the start of the next century if London is flooded.
It’s not related to the rule against perpetutities at all. The rule deals with interests in proprerty which are floating around in a trust, waiting to be vested in someone. They can only float around unvested like this if the terms of the trust require that the must vest in someone within the perpetutity period. But the leasehold interest in your flat is already vested in someone – you. So the rule against perpetuities doesn’t apply.
Noting that part of Prince Harry’s well-documented strife with the rest of the family has been over the provision of security, bodyguards, etc… perhaps he could now apply to The Mouse for some extra assistance? I’m sure Disney will want to assure his and his offspring survive for as long as possible.
Bonus points if they wear the ears at all times.
Not a lawyer, but very interested if a gambit using English Common Law would be applicable in the US and if it is, will it actually work? I mean, even with a veto-proof majority in the legislature, I can’t possibly see a way the state government could force the board of a private company to change its laws, right?
This did make me smile. When I was a law student I think I understood the rule against perpetuitities for about an hour – luckily that coincided with my exams.
I’m thinking of a Pelican Brief-like scenario, the King’s offspring start having random fatal “accidents”, investigative journalist thinks there might be a connection (suspects initially include local anti-royalist factions, what’s left of the IRA, etc.), but it turns out to be someone wanting this contract terminated… Might be a little far-fetched, even for a movie. And I bet Disney wouldn’t make it :-)