Rules against perpetuity is discussed in Section 14 of transfer of Property Act. 1882. It is one of the most important chapters in the transfer of property subject. To understand this you need to understand other topics too. Mostly Section 13 of Transfer of property. This particular section i.e section 14 is a continuation process of section of 13.
What Is Rules Against perpetuity
Perpetuity according to oxford dictionary means the state or quality of lasting forever or a bond or other security with no fixed maturity date. So rules against perpetuity means exactly opposite of this. It means against the quality of lasting forever.
Following are elements of rule against perpetuity:
before property is transferred to unborn person.
- Unborn person must come in to existence before the expiry of the existing life of transferor.
- Transfer must be absolute and it can’t be partial.
Analysis of this rule
1.The vesting can not be postponed beyond the lifetime of any one or more persons living at the date of the transfer. For example, if an property is transferred to a living person, John for life, then to a living person, Mark for life and then to the unborn son Mark. Here the son of Mark must be in existence on or before the date of the expiry of the life estate in favour of Mark..
Stated in another way, the rule amounts to saying that, except in case of minority, discussed below, there must be no interest between the termination of the precedent interest of a living person and the vesting of the interest taken by the person who was not in existence at the date of the transfer.
- The vesting of absolute interest in favour of an unborn person may be postponed until he attains full age.
English Law Regarding This
In English law, a contract for purchase of real property is regarded as creating an equitable interest, and, if, in the absence of a time limit, it is possible that the option for repurchase can be exercised beyond the prescribed period fixed by the perpetuity rule, the covenant is regarded as altogether void.So it has, been held that a covenant for pre-emption for not an limited time in point of time is bad as being obnoxious to the rule against perpetuities. The point was settled by the rule against perpetuities. The point was settled by this rule.
Exception to Rule against perpetuity
- When the purphase happens by a corporation
- Where property is transferred by way of gift for benefit of public.
- Personal agreement.
- Agreement for perpetual lease.
- Gift to charity
