rule against perpetuity

English · Property and land

Meaning. The rule that a transfer of property cannot postpone the vesting of an interest beyond a life in being plus the minority of an unborn person.

Section 14 of the Transfer of Property Act, 1882 provides that no transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of the transfer and the minority of some person who is in existence at the end of that period, and to whom the interest is to belong if he attains full age. In practice: lives in being plus eighteen years (plus the period of gestation, if the person is in the womb).

The rule prevents property being tied up indefinitely and kept out of commerce. Unlike English law, there is no fixed period of 21 years. The rule does not apply to transfers for the benefit of the public, such as religion, knowledge, commerce or health (s.18), nor to personal agreements or mortgages. Section 13 TPA (transfer for the benefit of an unborn person) works alongside it. Section 114 of the Indian Succession Act, 1925 has the same rule for wills.

Example

The gift to A for life, then to A's unborn grandson at age 25, was void because the interest might vest beyond the minority of a person in existence, contrary to s.14 TPA.

In Indian law

Sections 13, 14 and 18, Transfer of Property Act, 1882
Section 114, Indian Succession Act, 1925

rule against perpetuity

Example

In Indian law

See also

Read more in the study notes