Real Property - Ownership & Rights in Land

Question 1

Rule Against Perpetuities (RAP)

Answer 1

“no interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest”

1. Contingent Remainders/Class Gift
2. Options to Purchase (Fee Options)
3. Powers of Appointment
4. Executory Interests
5. Rights of First Refusal

Question 2

License

Answer 2

Revocable personal privilege to enter servient tenement of licensor w/o liability for trespass.

Question 3

Easements in Gross

Answer 3

1. No dominant tenement

2. Do not run w/ land

Question 4

Easements Appurtenant

Answer 4

1. 2 parcels – Benefitted- dominant, Burdened- servient

2. Do run w/ land

Question 5

Easement Creation

Answer 5

1. Expressly in writing- grantor to grantee
2. Necessity- landlocked, but allow judge to decide
3. Implication- reflect practices & customs of property
4. Prescription- adversely possessed (no exclusivity)

Question 6

Easement Termination

Answer 6

1. Written release
2. End of necessity
3. Abandonment – Requires intent & physical act
4. Merger – unity of ownership
5. Government body acquires servient estate through exercise of eminent domain power

Question 7

Covenant

Answer 7

A K in which covenantor makes a promise to covenantee to do or not do some action tied to the use of land. A covenant running w/ the land, imposes duties or restrictions upon the use of that land regardless of owner. Plaintiff seeks $ damages. Ct of Law.

Question 8

Restraint on Alienation

Answer 8

A restriction prohibiting the recipient from selling or
otherwise transferring his interest in property. Such restraints are void as against public policy of
allowing landowners to freely dispose of their property.

Question 9

Valid Restrictions on Alienation

Answer 9

• Prohibition against partition of property for a limited time
  -Rt of 1st refusal - A sells property to B, A may require that if B later decides to sell the property, she must 1st give A the opportunity to buy it back.
  General Rule: any direct restraint on a fee simple is invalid (only estates less than fees may be subject to restraints upon their alienation) (words of inheritance create fee simple)

Question 10

Joint Tenancy

Answer 10

Concurrent Estate
1. 4 unities – time, title, interest, possession
2. Has rt of survivorship – estate passes to survivor
Traditional required language: “to A & B as joint tenants & not as tenants in common, w/ full rt of survivorship”

Question 11

Tenants by the Entirities

Answer 11

Concurrent Estate

1. Reserved for husband & wife
2. 5th unity - person

Question 12

Tenancy In Common

Answer 12

Unity of Possession Only - each tenant has a rt to the whole of the property. No rt of survivorship. TiC may transfer her interest inter vivos voluntarily through a conveyance, lease, mortgage, or other transfer of present possessory or future property interest; or involuntarily through foreclosure on a mortgage of tenant’s interest or an execution of a judgment creditor’s lien on tenant’s interest in the property.

Question 13

Joint Tenancy Becomes Tenancy in Common

Answer 13

Severance:

1. Conveyance Inter Vivos
2. Death of one of two remaining JTs
3. Mortgage under title theory
4. Final partition action

Question 14

Fee Simple Absolute

Answer 14

Largest possible estate in land. Unimpeded right to:

1) sell or convey all or part of the property
2) devise property (may last in perpetuity)

Question 15

Fee Simple Determinable

Answer 15

Estate that terminates automatically on the happening of a named future event. Described using words: for so long as, during, while, until, as long as, or unless. Is created in 1 clause and w/ a limitation built into that 1 clause.

Ownership of a fee interest, even a defeasible fee, includes the rt to exploit the mineral resources of the land (life estate would be subject to doctrine of waste).

Question 16

Estate Subject to a Condition Subsequent

Answer 16

May be cut short if the estate is retaken by grantor or a 3rd party on the happening of a named future event. Described using words: provided, however, however if, but if, on condition that, or in the event that. Is created in 2 separate clauses and w/ a condition stated in the 2nd clause.

Question 17

Fee Simple Subject to an Executory Interest

Answer 17

Estate that is automatically divested in favor of a 3rd person on the happening of a named event. Followed by a shifting executory interest. Subject to RAP.

Question 18

Life Estate

Answer 18

Lasts for the duration of grantee’s life. Possessor has right to possess, use and enjoy property but can’t do anything that adversely affects future interests that follow - such acts are called “waste”.
Voluntary waste - prohibited
Ameliorative waste - allowed under modern law.
Life tenant has duty to maintain property in a reasonable state of repair, ordinary wear and tear excepted. Duty limited to extent of income derived or, if she personally occupies premises, to the extent of the reasonable rental value of the land.

Question 19

Voluntary Waste

Answer 19

Prohibited, but natural resources may be consumed: for the repair and maintenance of the property; w/ permission of grantor or under open mines doctrine. Applies to both life tenants and tenants for years.

Question 20

Ameliorative Waste

Answer 20

When act of life tenant increases value of premises by permanently altering them. Can do under modern law if market value of remainderman’s interest isn’t impaired and is either permitted by the remainderman or a substantial and permanent change in the neighborhood has deprived the property of a reasonable current value.

Question 21

Reversion

Answer 21

Future Interest. Retained by grantor when grantor transfers less than a fee interest to a 3rd person. Majority Rule: transferable, devisable, descendible, and not subject to the Rule Against Perpetuities.

Question 22

Possibility of Reverter

Answer 22

Future Interest. Grantor that follows a determinable estate.
TX: right of reverter is both assignable and devisable

Question 23

Right of entry (power of termination)

Answer 23

Future Interest. Held by grantor that follows an estate subject to a condition subsequent.
TX: right of entry after a condition subsequent has been broken if fully alienable/transferable

Question 24

Remainder

Answer 24

Future Interest. Created in 3rd party, intended to take after natural termination of preceding estate.

Question 25

Vested Remainder

Answer 25

Requires takers be ascertainable or ascertained at time remainder created. Must fall in automatically at natural termination of previous estate ie. no conditions precedent to taking. Is transferable, descendible, and devisable. Not subject to RAP.

Question 26

Remainder Vested Subject to Open/Vested Subject to Partial Divestment

Answer 26

Remainder made to a class (my children) and has at least 1 ascertainable member and has satisfied any conditions precedent to vesting, but may have other members join the class later. Subject to RAP.

Question 27

Vested Remainder Subject to Total Divestment

Answer 27

Is presently vested but may be terminated on the happening of a future event.

Question 28

Contingent Remainder

Answer 28

If takers are unascertainable or the interest is subject to a condition precedent, and therefore doesn’t fall in automatically on natural termination of previous estate. Subject to RAP.

Question 29

Common Law Rule of Destructibility of Contingent Remainders

Answer 29

Contingent remainder in real property can be destroyed by:
1) if it fails to vest by the natural termination of the prior vested estate
2) if merger occurs
3) if holder of present possessory estate surrenders her interest before contingent remainder vests.
TX: has abolished Rule, if contingent remainder has not vested at natural termination of prior vested estate, contingent remainder will become an executory interest, subject to RAP

Question 30

Executory Interest

Answer 30

Future Interest in a 3rd person that can’t become possessory automatically at natural termination of previous estate because it cuts off previous estate (shifting); or it doesn’t become presently possessory until some time after natural termination of previous estate (springing)

Question 31

Future Interests

Answer 31

In Grantor: Possibility of Reverter, Right to Entry, Springing Executory Interest, Reversion
In 3rd Party: Shifting Executory Interest, Contingent (subject to RAP) or Vested Remainder

Question 32

Difference b/w JT & TiC in TX (Title Theory State vs. Lien Theory State)

Answer 32

Title Theory: execution of a mortgage by 1 JT causes legal interest to transfer to mortgagee.
Lien Theory: Mortgagee only receives a lien on property, therefore no severance b/c unities intact.
Absent agreement conferring right of survivorship, death of any party to a multiple-party account has no effect on beneficial ownership of account other than to transfer rights of decedent as part of his estate. Survivorship agreement will not be inferred from mere fact account is a joint account. B/c no right of survivorship , JTs aren’t recognized in TX. Instead, holders share as TiC.

Question 33

Title Theory State

Answer 33

When the execution of a mortgage causes the legal interest to be transferred to the mortgagee. Right to rents and profits.

Question 34

Lien Theory State

Answer 34

On execution of a mortgage, mortgagee receives only a lien on the property.

Question 35

Statute of Frauds for Sale of Real Property

Answer 35

Requires:

1) writing
2) signed by the party to be charged
3) include essential terms: description of the property, description of the parties, price, and any conditions of price or payment if agreed on
- Doctrine of part performance may be used to enforce an otherwise invalid oral K for sale, provided acts unequivocally prove existence of K (TX requires showing payment, taking possession, and valuable improvements made by purchaser).

Question 36

Marketable Title

Answer 36

Title free and clear from reasonable doubt on matters of law or fact, such that a prudent man, advised of facts and legal significance, would willingly accept.
TX: no marketable if clouded by any outstanding K, covenant, interest, lien, or mortgage sufficient to form basis of litigation, or if exposes holder to a reasonable probability of litigation w/ the least chance of defeat.

Question 37

Title Not Reasonably Free from Doubt if has which defects?`

Answer 37

1) Defects in chain of title: adverse possession, defective execution of a deed, or significant variation of description of land from 1 deed to the next
2) Encumbrances: a right or interest that another person has in real property that diminishes the value of the property but is consistent w/ the conveyance of a fee interest in the property (mortgages, liens, easements, covenants, servitudes)
3) Encroachments: significant = unmarketable; slight (ex: boundary overlap of only several inches) not unmarketable if owner says she will not rely on encroachment as a basis for suit
4) Zoning Violation (Zoning Restrictions DO NOT make unmarketable)
5) Physical Defects: do not make unmarketable

Question 38

Equitable Conversion

Answer 38

Purchaser becomes equitable owner of title of home at time of execution of binding K

Question 39

Passage of Property at Death

Answer 39

If seller dies after execution of K for sale, but before closing, legal title passes to his heirs and devisees. They much honor sales agreement, and purchase $ passes as personalty.
If buyer dies after execution of K for sale, but before closing, party that takes decedent’s realty may demand a closing and exoneration of liens from personal estate of decedent.

Question 40

Merger

Answer 40

Modern Trend: Merger doesn’t apply to matters that’re collateral to or not mentioned in deed.
Traditional: covenants in K for sale merge into deed at closing.

Question 41

General Warranty Deed

Answer 41

Seller warrants that no title defects have occurred during her ownership. Warrants there are no defects in chain of title from which she derived title.

Question 42

Special Warranty Deed

Answer 42

Seller warrants no title defects have occurred during his ownership. Doesn’t warrant that there are no defects in chain of title from which he derived.

Question 43

Statutory Special Warranty Deeds

Answer 43

(TX has adopted) Expressly state which covenants are implied in a conveyance.
TX: unless conveyance expressly provides otherwise, use of “grant” or “convey” in a conveyance implies grantor & his heirs covenants only that:
1) prior to execution, grantor hasn’t conveyed estate, or any interest in estate, to a person other than grantee; &
2) at time of execution of conveyance, estate is free from encumbrances.

Question 44

Quitclaim Deed

Answer 44

Seller makes no warranties. Grantor conveying whatever interest she may have.
TX: may still contain warranties but conveys no more than the interest of grantor, rather than property

Question 45

Future Covenants

Answer 45

May be broken after time of conveyance. Run w/ the land.

1) Quiet Enjoyment - grantor warrants grantee will not be disturbed by superior claim
2) Warranty - grantor guarantees she’ll assist in defending title against lawful claims & will compensate grantee for losses sustained by assertion of superior title (virtually identical to quiet enjoyment)
3) Further Assurances - grantor promises to take whatever steps may be required to perfect defects of title (TX: generally subsumed in covenants for quiet enjoyment & warranty)

Question 46

Remedies for Breach of Covenant by Grantor

Answer 46

• monetary recovery generally capped at amount grantor/D received for property (plus interest)
• breach of seisin, rt to convey, general warranty, & quiet enjoyment, grantee may recover full purchase price (if conveyance voided) or a % (if portion of conveyance voided)
• breach of covenant against encumbrances, damages measured by cost of removing defect, if removal possible, or diminution of value in property, if can’t be removed
• in some jurisdictions, atty’s fees may also be recovered for breach of future covenants if grantee loses property to lawful superior claim
• some states (including TX) permit grantee to recover damages from a remote grantor to extent consideration received by remote grantor from his immediate grantee, even if remote grantee paid her immediate grantor less for property

Question 47

Requirements for Effective Transfer of Real Property Deed

Answer 47

1. Donative Intent
2. Delivery (physical act or mere words)
3. Acceptance
   Presumptive Delivery if:
   1) deed found later in grantee’s possession
   2) deed properly executed and recorded, or
   3) deed contains attestation clause attesting to delivery

Question 48

Recording

Answer 48

Recordation of deed no required to validate transfer of title.
TX: deed may be recorded if it has been acknowledged or sworn to w/ a person authorized by law to do so. Deed may also be recorded if signed & acknowledged or sworn to by grantor in presence of 2 or more credible W’s
Common Law: Property awarded to person who took property 1st in time. Applies if person who took later fails to qualify under relevant recording statute.

Question 49

Race Recording Statute

Answer 49

Person who records 1st wins

Question 50

Notice Recording Statute

Answer 50

To Prevail, Claimant must:

1) take later than another claiming ownership
2) BFP for value
3) take property w/o actual, constructive, or inquiry notice

Question 51

Race-Notice Recording Statute

Answer 51

To Prevail, Claimant must:

1) take later than another claiming ownership
2) BFP for value
3) take property w/o actual, constructive, or inquiry notice, and
4) record 1st

Question 52

Constructive or Record Notice

Answer 52

Exists if the other person’s deed is recorded in the proper place in the record books

Question 53

Inquiry Notice

Answer 53

Exists if appearance of property is such that claimant should have asked more questions about title to property

Question 54

Easement

Answer 54

An interest in land. SoF generally requires a writing to create an easement.

Question 55

Easement Implied by Prior Use Requirements

Affirmative Easement

Answer 55

1) severance of title to land held in common ownership
2) existing, apparent, & continuous use when severance occurs (quasi-easement); &
3) parties intended use to continue after division of land since use is reasonable necessity for enjoyment of dominant part at time of severance

Question 56

Easement by Prescription (Necessity) Requirements

Affirmative Easement

Answer 56

Proof of the use of property is:

1) open
2) notorious
3) actual
4) continuous (TX = 10 yrs)
5) hostile
6) exclusive

Question 57

For Covenant to Run w/ the Land Requirements

Answer 57

1) writing
2) intent
3) privity
4) touch & concern
5) notice

Question 58

Equitable Servitude (Restrictive Covenant)

Answer 58

Ct may enforce if: plaintiff can establish at law all elements for a covenant that runs w/ the land but plaintiff seeks equitable relief; or plaintiff can’t establish at law all the elements but can demonstrate relaxed requirements of equitable servitude. Plaintiff seeking to enjoin non-conforming use. Ct of Equity (as opposed to Ct of Law)

Question 59

Implied Reciprocal Servitude

Answer 59

If the owner of 2 or more lots, so situated as to bear the relation, sells 1 w/ restrictions of benefit to the land retained, servitude becomes mutual, & owner of lot/lots retained can’t do anything forbidden to owner of lot sold.

Question 60

Differences b/w Covenants & Equitable Servitudes

Answer 60

Covenant: Plaintiff seeks $ damages, breach of K, Ct of Law

Equitable Servitude: Plaintiff seeks to enjoin non-conforming use, Ct of Equity

Question 61

Profit-a-Prendre

Answer 61

Similar to an easement, non-possessory interest in land. Holder of profit entitled to enter upon servient tenement & take the substance of the land subject to the privilege. Can be appurtenant or in gross. (a profit is an interest in land vs. a license isn’t)