MBE Rules · Real Property
Restraints on Alienation
Restraints on alienation
The rule
Absolute restraints on alienating a fee are void; reasonable partial restraints, rights of first refusal, and restraints on life estates or leaseholds are generally upheld.
In plain English
Restraints on alienation refer to restrictions on a property owner's ability to sell or transfer their property. While absolute restrictions that completely prevent the transfer of a fee simple interest are invalid, reasonable partial restraints, such as rights of first refusal, are usually enforceable, especially in the context of life estates or leaseholds.
Worked example
A property owner sells their home but includes a clause that prohibits the buyer from ever selling the property to anyone else. This absolute restraint is void. However, if the owner instead grants the buyer a right of first refusal, allowing the owner to match any offer before the buyer sells, this restraint is likely enforceable.
Memory hook
Absolute restraints are out; reasonable ones are in!
The trap
Exams may present scenarios where students confuse absolute and reasonable restraints, leading them to incorrectly assess the validity of the restrictions. Watch for language that suggests total prohibition versus conditional rights.
How examiners test it
Questions often involve fact patterns where a property transfer includes specific conditions, requiring candidates to determine the validity of those conditions based on the type of restraint imposed.
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