Reedy Creek mouse trap: What is the ‘rule against perpetuities’ and why is King Charles involved?

ORANGE COUNTY, Fla. — Across the internet Wednesday and Thursday, attorneys rejoiced that a little-known legal concept forced upon them in law school was finally having a real-life application.

Disney’s move to undercut the power of the new DeSantis-appointed Reedy Creed Improvement District board, now known as the Central Florida Tourism Oversight District board, was multi-faceted as it sought to have maximum impact. There was a development agreement granting the company the most possible leeway to develop its properties that lasts 30 years.

Power play: Disney handicapped new Reedy Creek board before handing over control

Secondary, though – and admittedly, generating the most headlines – were the covenant restrictions imposed on Reedy Creek and other property owners that lasted much longer: in perpetuity, unless that violated the Rule Against Perpetuities.

In that case, to observers’ delight, the restrictions would be in effect until 21 years after the death of the last surviving descendent of King Charles of the United Kingdom – of the people who were alive as of Feb. 8, 2023.

“It’s one of those things in law school that feel ‘lawyerly’ but you’ll likely never encounter,” attorney Whitney Merrill wrote. “Why the lawyers are all geeking out today.”

So, what is this rule, and why did Disney choose King Charles III? The company’s lawyers may have their own reasons, but analysts believe the answer is more cloaked in history.

In short, attorneys say the Rule Against Perpetuities makes sure no one can control their land forever. Since land is a stable and limited resource, it prevents every single property from having weird restrictions put on them from someone who owned it hundreds of years in the past.

Read: Power play: Disney handicapped new Reedy Creek board before handing over control

The rule varies, but most dictate that a person may only influence their land for the life of a living person at the time of a restriction’s creation, plus 21 years. In this case, Disney chose the last living descendent of Charles, which will more than likely be one of his young grandchildren, George, Charlotte, Louis, Archie or Lilibet.

Disney’s use of the rule invoked what is known as the “Royal Lives Clause,” which is a historical use of the rule and says, as the company did, the restriction in question will be valid until the lifetime plus 21 years of the last living descendent of the current British monarch.

Read: What will Disney’s new Reedy Creek district look like?

The legal corners of social media have been buzzing as attorneys refreshed on both the rule and the clause, cheered that both seemingly now have real-life applications.

The Reedy Creek situation has already been added to the Wikipedia article for the Rule Against Perpetuities, joining two other cases. The article for Royal Lives Clause has also been updated include its first and only “real” example.

Attorneys are still debating whether Disney’s use of the rule and clause to handicap the new board’s authority is legal, in a case that will most likely be decided in court.

Video: Power play: Disney handicapped new Reedy Creek board before handing over control In their final days of controlling the Reedy Creek improvement district’s board, Disney executives and attorneys found a way to poison the new board's authority (Nick Papantonis, WFTV.com)

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