Real Property

Question 1

An estate in land can be held concurrently by several persons, all of whom have the right to enjoyment and possession of the land. What are the three forms of concurrent ownership?

Answer 1

1) Joint Tenancy - Two or more own with right of survivorship
2) The Tenancy by the Entirety - A protected marital interest between spouses with the right of survivorship
3) The Tenancy in Common - Two or more own WITHOUT the right of survivorship

Question 2

What is the Right of Survivorship?

Answer 2

When one party dies, that party’s interest automatically goes to the surviving party.

Question 3

How do you create a Joint Tenancy?

Answer 3

Common law requires the FOUR UNITIES:

Joint Tenants must take their interests:

T: at the same time;
T: by the same title (in the same deed, will, or other document of title);
I: with identical, equal interests; and
P: with rights to possess the whole.

In addition, the grantor must clearly express the right of survivorship.

Question 4

How do you sever a Joint Tenancy?

Answer 4

1) Severance and Sale; and
2) Severance and Partition.

Question 5

What is a Severance and Sale?

Answer 5

A joint tenant sells or transfers their interest during their lifetime;
such voluntary conveyance destroys the joint tenancy and the transferee takes as a tenant in common;
the joint tenancy remains intact with other non-transferring joint tenants.

Question 6

What is a Severance and Partition?

Answer 6

There are 3 types of Partition:

1) By voluntary agreement;
2) By Judicial action called “Partition in Kind” (An action for a physical division of the property; only works if the large property is visibly divisible); and
3) By Judicial action called “A Forced Sale” (The land is sold and the sale proceeds are divided up proportionately).

Question 7

Do Mortgages sever a Joint Tenancy?

Answer 7

NO under the lien theory

A mortgage is a lien on title and does not sever a joint tenancy. Severance occurs only if the mortgage is foreclosed and the property is sold.

The execution of a mortgage in “Title Theory” States, however, DOES sever a joint tenancy.

Question 8

How is a Tenancy by the Entirety created?

Answer 8

It arises presumptively in any conveyance to married partners unless the language of the grant clearly indicates otherwise.

Question 9

How do you sever a Tenancy by the Entirety?

Answer 9

Only by death, divorce, mutual agreement, or execution by a joint creditor of BOTH the spouses.

On divorce, the Tenancy by the Entirety becomes a Tenancy in Common.

Question 10

What is an Ouster?

Answer 10

Ouster is an actionable wrong. One co-tenant wrongfully excludes another co-tenant from possession of the whole or any part.

The party that was wrongfully ousted may receive their share of the fair rental value of the property.

Question 11

What are the three types of Waste?

Answer 11

1) Voluntary waste - willful destruction
2) Permissive waste - neglect
3) Ameliorative waste - unilateral change that increases property value

Question 12

How do you terminate a Tenancy in Common?

Answer 12

May be terminated by partition.

Question 13

What is a leasehold?

Answer 13

An estate in land, under which the tenant has a present possessory interest in the leased premises and the landlord has a future interest.

Question 14

What are the 4 leasehold estates?

Answer 14

1) Tenancy for years
2) Periodic Tenancy
3) Tenancy at Will
4) Tenancy at Sufferance

Question 15

What is a Tenancy for years?

Answer 15

A lease for a fixed, determined period of time.

Question 16

How is a Tenancy for Years terminated?

Answer 16

It ends automatically at its termination date. No notice is required.

The landlord reserves a right of entry, which allows them to terminate the lease if the tenant breaches any of the lease’s covenants or if the tenant surrenders the property.

Question 17

What is a Periodic Tenancy?

Answer 17

A lease which continues for successive intervals until either the landlord or the tenant gives proper notice of termination.

It is continuous until properly terminated.

Question 18

How is a Periodic Tenancy created?

Answer 18

1) Expressly or
2) By Implication/Operation of Law

• The land is leased with no mention of duration, but provision is made for the payment of rent at set intervals;
• An oral term of years in violation of the SoF creates an implied periodic tenancy, measured by the way rent is tendered;
• In a residential lease, if a landlord elects to hold over a tenant who has wrongfully stayed on past the conclusion of the original lease, an implied periodic tenancy arises measured by the way rent is tendered.

Question 19

In a Periodic Tenancy that is year-to-year or greater, how much notice is required to terminate?

Answer 19

Common Law -> 6 Months
RST -> 1 Month

Question 20

What is a Tenancy at Will?

Answer 20

A tenancy of no fixed period of duration - its terminable at the will of either the landlord or the tenant. Unless the parties expressly agree to a tenancy at will, the payment of regular rent will cause the court to treat the tenancy as an implied periodic tenancy.

Question 21

What is a Tenancy at Sufferance?

Answer 21

A tenancy at sufferance is created when a tenant wrongfully holds over, meaning they remain in possession past the expiration of the lease. It lasts only until the landlord either evicts the tenant or elects to hold the tenant to a new tenancy. NO NOTICE OF TERMINATION IS REQUIRED!

Question 22

How do you Terminate a Tenancy at Will?

Answer 22

Usually terminates after one party displays an intention that the tenancy should come to an end. May also end by operation of law (i.e., death of a party, attempt to transfer interest).

Question 23

What are the two primary duties of a Tenant?

Answer 23

1) To repair; and
2) To pay rent

Question 24

If a tenant wrongfully vacates with time left on a term of years lease, what are the landlord’s options?

Answer 24

1) Surrender - The Landlord could choose to treat the tenant’s abandonment as an implicit offer of surrender, which the landlord accepts, thereby ending the lease.

2) Ignore - Do nothing and hold the tenant responsible for the unpaid rent. Only available in a minority of States.

3) Re-let the premises on the wrongdoer-tenant’s behalf, and hold the wrongdoer-tenant liable for any deficiency. Must show good-faith effort to mitigate damages.

Question 25

What are the 3 Landlord’s duties?

Answer 25

1) Duty to deliver possession - Landlord must put the tenant in actual physical possession of the premises at the beginning of the leasehold term.

2) The Implied Covenant of Quiet Enjoyment - Arises in both residential and commercial leases. It provides that a tenant has a right to quiet use and enjoyment of the premises, without interference from the landlord or a paramount title holder (i.e., a prior mortgagee who forecloses).

3) The Implied Warranty of Habitability - Arises only in residential leases. It provides that the premises must be fit for basic human habitation.

Question 26

When does Actual Eviction occur?

Answer 26

Actual eviction occurs when the Landlord, a paramount title holder, or a hold-over tenant excludes the tenant from the ENTIRE leased premises.

Actual evidence terminates the tenant’s obligation to pay rent.

Question 27

When does Partial Eviction occur?

Answer 27

Partial eviction occurs when the tenant is physically excluded from only PART of the leased premises. partial eviction BY THE LANDLORD relieves the tenant of the obligation to pay rent for the entire premises, even though the tenant continues in possession of the remainder.

Question 28

When does Constructive Eviction occur?

Answer 28

Constructive eviction occurs when the landlord’s breach of duty renders the premises unsuitable for occupancy.

A tenant who has been constructively evicted may terminate the lease and may also seek damages

Question 29

How does Constructive Eviction occur?

Answer 29

When there is:

1) Substantial interference (chronic or permanent problem);
2) Notice was given to Landlord; and
3) Tenant has vacated the premises.

Question 30

In general, a landlord is not liable to a tenant for the wrongful acts of other tenants. However, there are two exceptions in which case a landlord will be liable:

Answer 30

1) A landlord has a duty to abate a nuisance on site; and
2) A landlord must control common areas.

Question 31

What are Tenant’s options when Implied Warranty of Habitability is Breached?

Answer 31

Tenants have four options:

1) Move out and terminate the lease;

2) Repair and deduct their cost from future rent;

3) Reduce rent or withhold all rent until the court determines fair rental value (place rent in escrow); or

4) Remain in possession, pay full rent, and affirmatively seek money damages.

TENANT DOES NOT HAVE TO VACATE!

Question 32

A landlord may not terminate a lease or penalize a tenant in retaliation for the tenant’s exercise of their legal rights. Many statutes presume a retaliatory motive if the landlord acts within a reasonable time period after a tenant exercises their rights. To overcome this presumption, the landlord must do what?

Answer 32

Show a valid, nonretaliatory reason for their actions.

Question 33

What is an Assignment?

Answer 33

In the absence of some prohibition in the lease, a tenant may freely transfer their interest in whole.

Question 34

What is a Sublease?

Answer 34

In the absence of some prohibition in the lease, a tenant may freely transfer their interest in part. The tenant has retained some part of the remaining term, other than a right to reenter upon breach.

Question 35

May a landlord prohibit a tenant from assigning or subletting?

Answer 35

Yes, the landlord may prohibit it without the landlord’s prior written approval.

However, once a landlord consents to one transfer by a tenant, the landlord WAIVES the right to object to future transfers by that tenant, unless the landlord expressly reserves the right.

Question 36

An assignee stands in the shoes of the original tenant in a direct relationship with the landlord. Each is liable to the other on all covenants in the lease that “run with the land.” What is this called?

Answer 36

Privity of Estate

Question 37

After assignment, the original tenant is no longer in privity of estate with the landlord, but their lease contracts remains in effect and enforceable. What is this called?

Answer 37

Privity of Contract

Question 38

What are Covenants that Run with the Land?

Answer 38

A covenant runs with the land if the original parties to the lease so intend and if the covenant “touches and concerns” the land (benefits the landlord and burdens the tenant or vice versa with respect to their interests in the property.

Question 40

A sublessee is not personally liable to the landlord for rent or for the performance of any of the covenants in the main lease unless the sublessee does what?

Answer 40

Expressly assumes the covenants.

Question 41

A sublessee may not enforce any covenants made by the landlord in the main lease, except a residential sublessee may be able to enforce which implied warranty against the landlord?

Answer 41

Implied warranty of habitability.

Question 42

Common Law Caveat Lessee: Let the tenant beware. In tort, a landlord is under no duty to make the premises safe. What are five exceptions to Caveat Lessee:

Answer 42

1) Common areas;
2) Latent defects (the duty is WARN, not a duty to repair);
3) Assumption of repairs;
4) Public use rule; and
5) Short-term lease of furnished dwelling.

Question 43

Modern Trend - Landlord General Duty of Reasonable Care. Many courts now hold that a landlord owes a general duty of reasonable care toward residential tenants, and will be held liable for injuries in tort resulting from ordinary negligence if the landlord had:

Answer 43

Notice of a defect and an opportunity to repair it.

Question 44

How do you create Affirmative Easements?

Answer 44

Four options to create an affirmative easement: P-I-N-G

P) Prescription (use that is Continuous Open Actual and Hostile for statutory period);

I) Implication (implied from prior use at time land is severed);

N) Necessity (division of tract deprives one lot of means of access); or

G) Grant (writing signed by grantor)

Question 45

How do you create Negative Easements? (Light, Air, Support, and Streamwater)

Answer 45

Writing signed by grantor.

Question 46

What are the remedies available for Affirmative Easements?

Answer 46

Injunction or Damages

Question 47

What are the remedies available for Negative Easements?

Answer 47

Injunction or Damages

Question 48

What are the remedies available for Real Covenants?

Answer 48

Damages

Question 49

What are the remedies available for Equitable Servitudes?

Answer 49

Injunction

Question 50

What are the remedies available for Reciprocal Negative Servitudes (Common Scheme Doctrine)?

Answer 50

Injunction

Question 51

How are Real Covenants created?

Answer 51

Writing signed by grantor.

Question 52

How are Equitable Servitudes created?

Answer 52

Writing signed by grantor unless implied by General Scheme Doctrine.

Question 53

How are Reciprocal Negative Servitudes (Common Scheme Doctrine) created?

Answer 53

Majority: In a subdivision, residential restrictions in prior deeds by common grantor bind subsequent grantees whose deeds don’t have the restriction if, at the start of the subdivision (1) grantor had common scheme and (2) unrestricted lot holders had notice.

Minority: Not binding on subsequent grantees unless their lots are expressly restricted in writing.

Question 54

How do burden of promises (Covenants) run to successors?

Answer 54

WITHN

Writing,
Intent,
Touch & Concern (the promise affect the parties’ legal relation as landowners),
Horizontal and Vertical Privity, and
Notice

Question 55

How do benefit of promises (Covenants) run to successors?

Answer 55

WITV

Writing,
Intent,
Touch & Concern, and
Vertical Privity

Question 56

How are successors of the burdened land bound to Equitable Servitudes?

Answer 56

WITNes

Writing,
Intent,
Touch & Concern, and
Notice (if subsequent purchasers had notice, then ES runs to them. If the successors did not pay for the burdened land, then the ES runs whether or not they had notice).

(privity is not required)

Question 57

What is an Easement?

Answer 57

An easement is a grant of a nonpossessory property interest that entitles its holder to some form of use or enjoyment of another’s land.

An easement holder has the right to use another’s tract of land for a specified purpose, but has no right to possess or enjoy that land.

An easement is presumed to be of perpetual duration unless the grant specifically limits the interest.

Question 58

What is an Affirmative Easement?

Answer 58

An affirmative easement is the right to go onto an do something on servient land.

Question 59

What is a Negative Easement?

Answer 59

The Negative Easement entitles its holder to prevent the servient landowner from doing something that would otherwise be permissible.

Negative easements are generally recognized in only 4 categories:

Light
Air
Support
Stream water from an artificial flow

Question 60

What is an Easement Appurtenant?

Answer 60

An Easement is Appurtenant when it benefits its holder in his physical use or enjoyment of his own land.

2 parcels of land must be involved.

There must be:

Dominant tenement, which derives the benefit
Servient tenement, which bears the burden

Question 61

What is an Easement in Gross?

Answer 61

An easement is in gross if it confers upon its holder only some personal or pecuniary advantage that is not related to their use or enjoyment of their land.

Servient land is burdened.

However, there is no benefited or dominant tenement.

Question 62

What is the transferability of an Easement Appurtenant?

Answer 62

The appurtenant easement passes AUTOMATICALLY with transfers of the dominant tenement, regardless of whether it is even mentioned in the conveyance.

The burden of the easement appurtenant also passes AUTOMATICALLY with the servient estate, unless the new owner is a bona fide purchaser without notice of the easement.

Question 63

What is the transferability of an Easement in Gross?

Answer 63

An easement in gross is NOT transferable unless it is for commercial purposes.

Question 64

There are 8 ways to terminate an Easement. What are they?

Answer 64

END CRAMP

Estoppel (an oral expression of an intent to abandon an easement and the servient owner materially changes their position in reasonable reliance),

Necessity (expires as soon as the necessity ends unless easement was reduced to an express grant),

Destruction (of servient land),

Condemnation (of servient land),

Release,

Abandonment (physical action that intends to never use the easement again),

Merger (easement holder and servient land become vested in the same person), and

Prescription (Servient owner interferes with easement in accordance with elements of Adverse possession).

Question 65

What is a License?

Answer 65

The license is a mere privilege to enter another’s land for some delineated purpose. Unlike an easement, a license is not an interest in land; it’s merely a privilege, revocable at the will of the licensor.

A license is personal to the licensee; therefore, it is inalienable.

Question 66

How do you create a License?

Answer 66

Any way to show intent of parties to create a license. A writing is NOT needed to create a license. It is not under SoF.

Any failed attempt to create an easement results in a license.

Question 67

Like an easement, a profit may be appurtenant or in gross.

What are the transferability results for both profit in appurtenant and in gross?

Answer 67

1) If the profit is appurtenant, it can only be transferred along with the dominant estate.

2) If the profit is in gross, it may be transferred separate and apart from the dominant estate.

Question 68

What is a Profit?

Answer 68

The profit entitles its holder to enter the servient land and take from it some resources. (Timber, oil, soil, substance etc)

Same rules for creating and terminating easements apply for profits

A profit may be extinguished through surcharge (misuse that overly burdens the servient estate).

Question 69

What is a Real Covenant?

Answer 69

The covenant is a written promise to do or not do something related to land.

It is a contractual limitation or promise regarding land.

Real covenants are normally found in deeds and when certain requirements are met they run with the land at law, which means that subsequent owners may enforce or be burdened by the covenants.

Question 70

What is Horizontal Privity?

Answer 70

Horizontal privity refers to the nexus between the original promising parties.

It requires that they be in succession of estate, meaning that they were in a grantor-grantee; landlord-tenant; mortgagor-mortgagee relationship when the covenant was created.

The two must have shared some interest in the land independent of the covenant.

Horizontal Privity is difficult to establish.

Question 71

What is Vertical Privity

Answer 71

Vertical Privity refers to the nexus between the successor in interest (A-1) and the originally covenanting party (A).

It simply requires some non-hostile nexus, such as contract, devise, or descent.

Vertical Privity will not exist if the successor acquired her interest through adverse possession.

Question 72

How do you determine which analysis to apply? Real Covenant or Equitable Servitudes?

Answer 72

Look at form of relief sought for.

Damages - Real Covenants

Injunction - Equitable Servitudes

Question 73

A court will not enforce an equitable servitude (actual or implied) if:

Answer 73

1) The neighborhood conditions have changed so significantly that enforcement would be inequitable;

2) The person seeking enforcement is violating a similar restriction on his own land (unclean hands);

3) A benefited party acquiesced in a violation of the servitude by a burdened party;

4) A benefited party acted in such a way that a reasonable person would believe the covenant was abandoned or waived (estoppel); or

5) The benefited party fails to bring suit against the violator within a reasonable time (laches).

Question 74

How do you terminate Real Covenants?

Answer 74

1) Release

2) Merger

3) Condemnation

Question 75

How do you terminate Equitable Servitudes?

Answer 75

1) Release

2) Merger

3) Condemnation

Question 76

To satisfy the Statute of Frauds for a land sale contract, what are the requirements:

Answer 76

1) A writing signed by the party against whom enforcement is sought;
2) Identify the parties;
3) Include the price; and
4) Describe the property.

Question 77

What is the Doctrine of Part Performance?

Answer 77

It is an exception to the Statute of Frauds for a sale of land contract that violates the SoF. Part performance is an equitable doctrine allowing a buyer to enforce an oral real estate contract by specific performance if (1) the oral contract is certain and clear, and (2) the acts of partial performance clearly prove the existence of a contract.

Question 78

For the purposes of Doctrine of Part Performance, the acts of partial performance element may be satisfied if the buyer can prove two of the following three actions:

Answer 78

1) Buyer has taken possession of the property;
2) Buyer has paid the purchase price or a significant portion of the purchase price
3) Buyer has made substantial improvements to the premises

Question 79

What is the Doctrine of Equitable Conversion?

Answer 79

Once the contract is signed, equity regards the buyer as the owner of the real property. The contract conveys equitable title to the buyer.

At the closing, the deed conveys legal title to the buyer. The right to possession rests with the party who holds legal title. Thus, seller is entitled to possession until closing.

Question 80

What are the two promises implied in every Land Sale contract?

Answer 80

1) Seller will provide marketable title; and
2) Seller will not make false statements of Material fact.

Question 81

What is a marketable title?

Answer 81

Marketable title is title reasonably free from doubt and the threat of litigation.

Question 82

What are the common defects that render title unmarketable?

Answer 82

1) Defects in record chain of title (most often, adverse possession)
2) Encumbrances (mortgages, liens, easements, restrictive covenants)
3) Zoning violations

Question 83

What must happen if the title of property is not marketable?

Answer 83

The buyer must notify the seller that title is unmarketable and give the seller reasonable time to cure the defects. If the seller fails to cure the defects, the buyer’s remedies include rescission, damages, specific performance with price abatement, and a quiet title suit.

But if the closing occurs, the contract and the deed merge, and the seller’s liability on the implied contractual covenant ends.

Question 84

For a seller to be liable for failure to disclose known defects in the property in a land sale contract:

Answer 84

1) The Seller must know or have reason to know of the defect;
2) The Seller must realize that the buyer is unlikely to discover the defect; and
3) The defect must be serious enough that the buyer would probably reconsider the purchase.

Question 85

May a Seller disclaim liability in an land sale contract?

Answer 85

General disclaimers of liability are no good.

However, specific disclaimers of specific types of defects will likely be upheld.

Question 86

Does the land contract contain any implied warranties of fitness or habitability?

Answer 86

NO

Caveat Emptor is the common law norm.

Question 87

What are the remedies for breach of land sales contract?

Answer 87

The nonbreaching party is entitled to damages (difference between contract price and market value on the date of breach, plus incidental costs); OR

Because land is unique, specific performance.

Question 88

Executing a valid deed requires the following:

Answer 88

1) A writing signed by the grantor
2) An unambiguous description of the land
3) Identification of the parties by name or description
4) Words of intent to transfer, such as “grant”

The Deed need not recite consideration, nor must consideration pass to make a deed valid.

Question 89

What are the three types of deeds to convey real property interests other than leaseholds?

Answer 89

1) The General Warranty deed;
2) The Special Warranty deed;
3) The Quitclaim deed

The difference among these deeds is the scope of title assurance (covenants for title).

Question 90

What is a Quitclaim deed?

Answer 90

A deed that conveys only what the grantor has at the time of the conveyance.

It does not contain any covenants for title.

This deed doesn’t promise that the grantor has title to convey.

Worst deed a buyer could hold for.

Question 91

What is a General Warranty deed?

Answer 91

It warrants against all defects in title, including those attributable to grantor’s predecessors.

Question 92

What are the covenants in a General Warranty deed?

Answer 92

The three present covenants

1) The covenant of Seisin (Grantor owns the estate)
2) The covenant of the right to convey (Grantor can transfer land)
3) The covenant against encumbrances (No servitudes/liens on land)

The three future covenants

1)The covenant for quiet enjoyment (Grantee will not be disturbed in possession by a third party’s lawful claim of title)
2) The covenant of warranty (Grantor promises to defend against reasonable claims of title by a 3rd party)
3) The covenant for further assurances (Grantor promises to do whatever is needed to perfect grantee’s title if later turns out to be imperfect)

Question 93

When does the statute of limitations for breach of a present covenant begin to run in a general warranty deed?

Answer 93

At delivery of deed

Question 94

What is a Special Warranty Deed?

Answer 94

This deed contains the same covenants as the general warranty deed, but here the grantor makes those promises only on behalf of himself.

Grantor makes NO representations on behalf of his predecessors in interest.

Question 95

Even when a deed complies with the required formalities, it may be set aside by the grantor’s creditors if it was made:

Answer 95

1) With actual intent to hinder, delay, or defraud any creditor of the grantor; OR
2) Without receiving a reasonably equivalent value in exchange for the transfer, and the debtor was insolvent or became insolvent as a result of the transfer.

HOWEVER, the deed will not be set aside as against any grantee who took in good faith and paid reasonably equivalent value.

Question 96

What are examples of Void Deeds?

Answer 96

1) Forged Deeds
2) No delivery
3) Dead or nonexistent grantee
4) Deed obtained by fraud (grantor didn’t know what they were signing)

Question 97

What are examples of voidable deeds?

Answer 97

1) Executed by minor
2) Executed by one without mental capacity
3) Deed obtained by fraud in inducement
4) Deed obtained by duress or undue influence
5) Deed obtained by mistake
6) Deed through breach of fiduciary duty

Question 98

A deed may validly convey real property by inter vivos gift so long as there is:

Answer 98

1) Donative intent,
2) Delivery, and
3) Acceptance

Question 99

To be a Bona Fide Purchaser, a grantee must:

Answer 99

1) Be a purchaser (or a mortgage lender), not one who received the property by gift, will, or inheritance
2) Pay valuable consideration
3) Take without notice (actual, constructive, or inquiry) of the prior conveyance at the time of the conveyance

Question 100

What are the three forms of notice that a buyer potentially may be charged with:

Answer 100

1) Actual notice (Literal knowledge)
2) Inquiry Notice (What a reasonable person would have discovered if inspected the property)
3) Record Notice (Prior conveyances of the property properly recorded)

Question 101

How does someone win under the Race Recording Statute?

Answer 101

Under a pure race statute, the first party to record wins.

“A conveyance of an estate in land shall not be valid against a subsequent purchaser for value unless the conveyance is first recorded.”

Question 102

How does someone win under the Notice Recording Statute?

Answer 102

A subsequent purchaser who had no notice of a prior conveyance by the grantor will prevail over a prior grantee who failed to record.

“A conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.”

Question 103

How does someone win under the Race-Notice Recording Statute?

Answer 103

The subsequent purchaser must not have any notice of the prior grant and must record first.

“Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.”

Question 104

What is the Shelter Rule?

Answer 104

Anyone who takes from a BFP will prevail against any interest the BFP would have prevailed against.

The transferee “takes shelter” in the status of her transferor, and thereby “steps into the shoes” of the BFP even though she otherwise fails to meet the requirements of BFP status.

Question 105

What is a Wild Deed?

Answer 105

A wild deed is a recorded deed that isn’t connected to the chain of title. It doesn’t impart constructive notice because a subsequent purchaser could not feasibly find it.

Question 106

Who is the Mortgagee?

Answer 106

The Creditor (bank)

Question 107

Who is the Mortgagor?

Answer 107

The Debtor

Question 108

A typical mortgage transaction involves what two documents:

Answer 108

1) The Promissory Note (mortgagor’s personal obligation; debtor is personally liable for note); and
2) The Mortgage (The agreement that enables the lender to foreclose the land and sell it to pay the loan off; lender has a collateral interest in the land).

Question 109

How may the Mortgagee transfer their interest?

Answer 109

1) By indorsing the note and delivering it to the transferee; or
2) By executing a separate document of assignment.

A mortgagee can freely transfer the note, and the mortgage automatically follows a properly transferred note.

Question 110

What is the difference between a buyer assuming the mortgage and buying the land subject to the mortgage?

Answer 110

If the buyer assumes the mortgage, then the buyer is personally liable for the payments of the mortgage.

If the buyer takes land subject to the mortgage, failure of the debtor (someone else) to pay the mortgage will result in the creditor foreclosing the land to pay off the loan.

Question 111

Who are the necessary parties to a foreclosure action?

Answer 111

All junior lienholders

The debtor/mortgagor

Question 112

What happens if the foreclosing party fails to include a necessary party?

Answer 112

The excluded necessary party’s mortgage will remain on the land.

Question 113

Redemption in Equity is recognized up to the date of sale. What is the redemption in equity?

Answer 113

Any time prior to the foreclosure sale the debtor has the right to redeem the land by freeing it of the mortgage.

Question 114

A variance to a zoning regulation is the principal means to achieve flexibility in zoning. The variance grants a landowner permission to depart from the literal restrictions of a zoning ordinance. What are the two proponents a valid variance must show?

Answer 114

1) Enforcement of literal zoning regulation results in undue hardship, and
2) There is no discrimination to neighboring property values.

Question 115

What are the two types of zoning ordinances?

Answer 115

1) Cumulative and
2) Noncumulative

Question 116

What is a cumulative zoning ordinance?

Answer 116

A cumulative zoning ordinance creates a hierarchy of uses of land.

Under a cumulative zoning ordinance, land that is zoned for a particular use may be used for the stated purpose and for any other higher use.

Question 117

What is a noncumulative zoning ordinance?

Answer 117

The land may be used only for the purpose for which it is zoned.

Question 118

The possessor of real property has the right to exclude others. Their remedies for invasions include actions for:

Answer 118

1) Trespass (land invaded by tangible physical object);

2) Private nuisance (land invaded by intangibles such as odors or noise);

3) Continuing Trespass (land repeatedly invaded by trespasser); and

4) Ejectment or unlawful detainer to remove a trespasser or tenant. This action can be joined with a demand for money damages.

Question 119

A present possessory estate is an interest that gives the holder the right to present possession. What are the three categories of present possessory freehold estates:

Answer 119

1) Fee simple

2) Defeasible Fee

3) Life Estate

Question 120

What are the distinguishing characteristics of a Fee Simple?

Answer 120

Fee Simple is an absolute ownership of indefinite or potentially infinite duration. It is freely transferable, devisable by will, and descendible through intestacy.

“To A” or “To A and his heirs.”

Question 121

What are the three types of Defeasible Fees

Answer 121

1) Fee Simple Determinable

2) Fee Simple Subject to Condition Subsequent

3) Fee Simple Subject to an Executory Interest

Question 122

What is a Fee Simple Determinable?

Answer 122

A fee simple determinable terminates upon the happening of a state event and automatically reverts to the grantor.

Future Interest: Possibility of Reverter held by Grantor

Question 123

What is a Fee Simple Subject to Condition Subsequent?

Answer 123

A Fee simple subject to condition subsequent is an estate in which the grantor reserves the right to terminate the estate upon the happening of a state event. It is not automatically terminated if the stated condition occurs; grantor must take some action.

Future Interest: Right of Entry held by Grantor

Question 124

What is a Fee Simple Subject to an Executory Interest?

Answer 124

A Fee simple subject to a condition that passes to a third party rather than reverting to the grantor or giving the grantor a right to terminate. The estate is automatically forfeited in favor of someone other than the grantor.

Future Interest: Executory Interest held by 3rd Party

Question 125

What is a Life Estate?

Answer 125

An estate that must be measured in explicit lifetime terms, and never in term of years

Question 126

What is a Life Estate Pur Autre Vie?

Answer 126

A life estate that is measured by a life other than the grantee’s. “to A for the life of B.”

A life estate pur autre vie also results when the life tenant conveys their life estate to another.

Question 127

What is the accompanying future interest for a life estate?

Answer 127

If the future interest is held by O, it is called a reversion.

If the future interest is held by a third party, it is called a remainder.

Question 128

What is a Remainder?

Answer 128

A remainder is a future interest in a third person (not grantor) that can become possessory on the natural expiration of the preceding estate. It cannot divest a prior estate, and it cannot follow a time gap after the preceding estate. A remainder must be expressly created in the instrument creating the preceding possessory estate.

Remainders are either vested or contingent.

Question 129

What is a Contingent Remainder?

Answer 129

A remainder is contingent if: (1) it’s created in unborn or unascertained persons; or (2) it’s subject to a condition precedent (a condition that must be satisfied before remainder has a right to possession), or both.

A remainder may be contingent as to person or as to event.

Question 130

What is a Vested Remainder?

Answer 130

A vested remainder is one created in an existing and ascertained person, and not subject to a condition precedent.

Question 131

What are the Three Types of Vested Remainders:

Answer 131

1) The Indefeasibly vested remainder;
2) The Vested remainder subject to total divestment (aka the vested remainder subject to complete defeasance); and
3) The Vested remainder subject to open.

Question 132

What is an Indefeasibly Vested Remainder?

Answer 132

An indefeasibly vested remainder is a vested remainder that is not subject to divestment or diminution. The holder of this remainder is certain to acquire an estate in the future, with no strings or conditions attached.

Question 133

What is a Vested Remainder Subject to Total Divestment?

Answer 133

This is a vested remainder that is subject to a condition subsequent. The right to possession could be cut short because of a condition subsequent.

Question 134

How do you distinguish conditions subsequent and precedent?

Answer 134

COMMA RULE

When conditional language in a transfer follows language that, taken alone and set off by a comma, would create a vested remainder, the condition is a condition subsequent, and you have a vested remainder subject to complete defeasance.

If it is a condition precedent, then it is a contingent remainder.

Question 135

What is a Vested Remainder Subject to Open?

Answer 135

This is a vested remainder created in a class of persons that is certain to become possessory, but is subject to diminution.

At least one of the class members is qualified to take possession, but each group member’s share could get smaller because additional takers, not yet ascertained, may still join the class.

Question 136

The Rule of Convenience - When does the Class Closes?

Answer 136

A class is open when it’s possible for others to join in. A class is closed when no others can join in. Under the rule of convenience, a class closes when some member of the class can call for distribution of their share of the class gift.

A class closes when any member of the class can demand possession.

Question 137

What is an Executory Interest?

Answer 137

Executory interests are future interests in third parties that either divest a transferee’s preceding freehold estate (“shifting interests”), or follows a gap in possession or cut short a grantor’s estate (“springing interests”)

Executory interests must take effect by cutting short some interest
- In another person (shifting)
- In the grantor or the grantor’s heirs (springing)

Question 138

What is the Rule of Perpetuities?

Answer 138

RAP provides that certain kinds of future interests are void if there is any possibility, however remote, that the interest might vest more than 21 years after a person alive at the time of the grant has died.

Question 139

What are the four steps technique for assessing potential RAP problems?

Answer 139

Step 1) Determine the Interests (The rule only applies to contingent remainders, executory interests, and certain vested remainders subject to open)

Step 2) How does the future interest holder take?

Step 3) Find the Measuring Life (look for the people alive at the date of conveyance whose lives and/or deaths are relevant to what has to happen for the future interest holder to take)

Step 4) When will we know if the future interest can take? (determine whether we’ll know for sure within 21 years of the death of a measuring life if the future interest holder can take.

If yes, then good conveyance
If no, then the future interest is VOID.

Question 140

Generally, any restriction on the transferability of a legal interest is void. What are the three types of restraints on alienation:

Answer 140

1) Disabling restraints, under which attempted transfers are ineffective;
2) Forfeiture restraints, under which an attempted transfer forfeits the interest; and
3) Promissory restraints, under which an attempted transfer breaches a covenant.

A disabling restraint on any legal interest is void.

Forfeiture and promissory restraints may be valid, depending on the nature of the restraint and the interest involved.

Question 141

When a tenant continues in possession after the termination of his right to possession, the landlord may evict him or bind him to a new periodic tenancy.

What tenancy is born in a commercial lease if the original lease term was for a year or more?

Answer 141

A year-to-year tenancy with a 6 months’ notice to terminate.

Question 142

When a tenant continues in possession after the termination of his right to possession, the landlord may evict him or bind him to a new periodic tenancy.

What tenancy is born in a residential lease if the original lease term was for a year or more?

Answer 142

A month-to-month tenancy with a 1 month notice to terminate.

Question 143

A life tenant can substantially alter or even demolish existing buildings if:

Answer 143

1) The market value of the future interests is not diminished and

EITHER:

1) The remainderman does not object; OR

2) A substantial and permanent change in the neighborhood conditions has deprived the property in its current form of reasonable productivity or usefulness.