All Flashcards
(95 cards)
1
Q
Recording Acts - Notice Jurisdiction
A
Bona fide purchaser for value without notice of prior interest prevails over prior grantee who failed to record. Must record against subsequent purchaser.
2
Q
Recording Acts - Race jurisdiction
A
First to record prevails - doesn’t matter if there is knowledge of prior conflicting interest
3
Q
Recording Act - Race Notice Jurisdiction
A
Subsequent bona fide purchaser for value protected only if they take without notice and they are first to record.
4
Q
Recording Acts - when is notice measured?
A
Tested at time of conveyance.
5
Q
Title insurance
A
Protects policy holder (owner or lender) against defects that could have been uncovered by a careful title search or forged/undeliverable/unenforceable deeds.
6
Q
General warranty deeeds
A
Present covenants:
- Seisin - deed that the grantor owns land as described in deed
- Right to convey - grantor has right to transfer title
- against encumbrances - no undeclared encumberances against land
7
Q
General warranty - Future covenants
A
Quiet enjoyment - grantee not disturbed in possession by third party’s lawful claim
Warranty - grantor will defend grantee against third party claim
Further assurances - grantor will do whatever future acts reasonably necessary to pass title later if title is imperfect
8
Q
Special warranty deed
A
Same covenants of title as general warranty deed, but only warrants against defects arising at time grantor has title
9
Q
Quitclaim Deed
A
Wild West deed, no covenants of title
10
Q
Ademption
A
Where devise of property by will fails because testator no longer owns the property on their death
11
Q
Lapse
A
Where devise of real property in will fails if beneficiary named in will dies before testator and no alternate beneficiary is named. An anti-lapse statute prevents a gift from lapsing if the beneficiary leave issue who survive the testator.
12
Q
Forms of Restraints on alienation of property
A
Disabling - total prohibition on transfer of property interest by owner, always void
Forfeiture - property is forfeited if the interest owner attempts to transfer his interest, restraint on future/ life estate can be valid
Promissory restraint - promise by property interest holder not to transfer interest, enforceable by injunction or damages, can be valid on file states
Restraints on use of property generally allowed, absolute restraint of alienation of fee simple is void
13
Q
What is a mortgage?
A
Interest in property that serves as security for an obligation.
14
Q
Does mortgage have to satisfy SOF?
A
Yes.
15
Q
Lien theory of mortgage
A
Majority theory. Debtor/mortgagor has title and right to possession until foreclosure and creditor/mortgagee has lien and right to the land if there is a default of mortgage.
16
Q
Installment land contract
A
Where seller retains title to property until the buyer makes the final payment
17
Q
Conditional sale and repurchase
A
Where property is sold and then leased back to seller: If lease is for long time with option to repurchase, this may be a disguised mortgage.
18
Q
Liability for mortgage after transfer of property
A
If transferee assumes the mortgage on transfer, borrower is secondarily liable. The borrower may be fully relieved of liability if lender (1) modifies loan terms, (2) releases transferee of liability or if lender releases the property
19
Q
Due on sale clause
A
Lender can demand immediate payment of full amount due
20
Q
Due on encumberance clause
A
Lender can accelerate mortgage upon second mortgage
21
Q
Equity of redemption
A
After default on mortgage but before the foreclosure sale, person who defaulted on mortgage has opp to regain title by paying amount of loan obligation owed plus interest
22
Q
Priority in mortgage foreclosure
A
If there is more than 2 mortgages, foreclosure terminates the junior interest and has no effect on senior interest. Rule is “first in time, first in right”
Exceptions:
- Purchase money mortgage
- Recording act - recorded interest may take priority over unrecorded one
- future-advances
- after- acquired property
23
Q
What is an easement?
A
Right held by a person to make specific and limited use of land owned by another person.
24
Q
Express easement
A
Created by parties in writing that satisfies requirements for a deed
25
Implied easement
Can either be implied by necessity or implication.
Necessity:
- Dominant/Servient estates must have been owned by same person.
- Necessity arises when property severed and estates created.
-Property is essentially useless without benefit of easement.
Implication:
- Dominant/Servient estates under common ownership.
- Quasi-easement existed at severance.
- Prior use was continuous, apparent or known.
- Easement reasonably necessary for dominant estate’s enjoyment.
26
Easement by prescription
Use that was continuous, actual, open and hostile for a statutory period
27
Transfer of easements
Easement appurtenance: The benefit/burden is transferred automatically with transfer of estate.
Easement in gross: Burden transfers automatically, but benefit transferable only if commercial parties intended it.
28
Termination of easement
1. Release - by writing which satisfies deed.
2. Merger - easement mergers into title when owner of one estate acquires title to other estate.
3. Severance - Attept to convey easement seperate from land it benefits.
4. Abandonment - Owner purposely acts with clear intent to abandon right. Need conduct.
29
Is unrecorded express easement enforceable against BFP of Servient estate?
No
30
Profits - Land
Holder of profits is entitled to enter land to take from soil or substance of soil eg mineral, timber, and oil. Created in a similar way to easements, except cannot be created by necessity.
31
License to enter land
License is permission to enter someone’s land, but it is freely revocable unless coupled with an interest or estoppel. Does not need to satisfy SOF.
32
Requirements for valid deed
1. Identified parties
2. Grantor’s signature
3. Words of transfer
4. Reasonably definite property description (extrinsic evidence allowed)
33
Delivery of a deed
The grantor must intend to make the transfer of the property interest to the grantee. Parol evidence admissible to show intent.
Acceptance of deed assumed for beneficial transfers.
34
Adverse possession
- Continuous Use (seasonal is ok, time can be tacked on)
- Open/Notorious (physical presence)
- Hostile - Objective intent to claim land without permission of owner
- Exclusive - cannot share with owner
35
Merger
Where there is a land sales contract, obligations merge into the deed upon delivery unless the parties intend otherwise.
36
Marketable title
Title free from defects or unreasonable risk of litigation.
The seller is generally not required to deliver marketable title until closing e.g. they can use sale proceeds to pay off existing mortgage.
Seller also has duty to disclose all known material defects not readily observable.
37
Contingent remainder
Created in an unascertainable grantee or is subject to express condition precedent before grantee’s taking
38
Doctrine of worthier title
Common law rule which has mostly been abolished.
Prevents grantor from creating a remainder in grantor’s heirs (minority J). Creates rebuttable presumption of reversion to grantor. E.G. “A conveys house “to B for life, then to A’s heirs”. In worthier title J, A has right of reversion.
39
Risk of loss under real estate contract
MAJORITY: Doctrine of equitable conversion: Risk of loss is on buyer during executors period.
MINORITY: Uniform Vendor and Purchaser Risk Act: Risk of loss remains with seller until buyer takes possession of or receives legal title.
40
Equitable mortgage
Can be established when debtor gives an absolute deed which transfers unrestricted title to property to a lender with an intent to secure loan. Need to prove that it was intended to be security for the loan, not an outright transfer.
41
Joint Tenancy
- Right of survivorship
- Must have all four unities to be valid:
1. Equal right to possess title
2. Identical equal interest
3. Created at the same time
4. By the same title
42
Waste - Life Estate
Waste limits rights of a life tenant - the LT must deliver property to the future interest holder in substantially the same condition.
Permissive waste: Property deteriorates through failure to preserve or reasonably protect property. LT must make reasonable repairs (up to the income produced or the fair rental value).
Voluntary waste: Affirmative action which results in substantial change. If prop value goes down, this isn’t allowed. If prop value goes up, permitted if it is for a reasonable use unless there is a reasonable objection from future interest holder.
43
RAP - Effect of a violation of the rule
Only future interest fails
44
Landlord obligation to repair
Except for tenant damages, L must repair for residential but not commercial leases.
45
Right to partition
Joint tenants and tenants in common (but not tenants in entirety) generally have right to partition unilaterally
46
RAP - Unborn spouse
If an interest following a widow’s life estate cannot vest until the widow dies, it violates RAP.
47
Landlord remedy for late rent payment
L entitled to damages. If breach is material, L can sue to remove tenant. If L accepted the late rent, L likely waived the right to evict.
48
Assignment v Sublease
Assignment = Complete transfer of remaining lease term
Sublease = Any transfer for less than entire duration of lease
49
Types of future interests
- Remainder (vested or contingent)
- Possibility of reverted
- Right of reentry
- Executory interests
50
Vested remainder subject to complete divestment
Occurrence of condition subsequent will completely divest the remainder
51
Implied Warranty of Fitness
For new homes, warrants use of adequate materials and workmanship
52
Real Covenants
They are covenants running with the land. Must validly have the following:
- Writing: Must comply with SOF.
- Intent: Must intend for the rights/duties to run with the land through explicit language OR implied from the totality of the circumstances.
- Must touch or concern the land: The benefit or burden must affect promisee/promisor as owners of land. Negative covenants run with the land if they restrict owners use/enjoyment/ Affirmative covenants run with the land if they require the owner to do something related to the use and enjoyment of the land.
- Notice - Only applies if it is a burden.
- Privity: Modern trend is that no privity is required.
53
Covenants - Privity
Horizontal Privity (only applies if burden): When estate and covenant are in the same instrument.
Vertical privity: The covenant is based on mutual/successive interest in land burdened/benefitted by covenant.
54
Equitable Servitudes
Type of covenant that runs with the land. Must:
- Be in writing (except for implied reciprocal servitudes)
- Requires intent for restriction to be enforceable by and against successors
- Must touch/concern the land, but no privity required
- Notice required if enforced against purchaser - can be actual, record or reasonable inquiry
55
Implied reciprocal servitude
Applies where there is a common scheme and intent to create a servitude on all plots (e.g. housing estates). No writing is required.
Notice is required (actual, record or inquiry) by party against whom enforcement is sought.
56
Defences to enforcement of covenants
Change in circumstances, laches, unclean hands, acquiescence, estoppel
57
Termination of covenants
Generally terminated by release, merger, abandonment, estoppel, condemnation
58
Common-Interest Ownership Communities
Where units that are owned by individual owners are burdened by a covenant to pay an association that provides services and enforces other covenants e.g. body corp.
Can enforce governing rules, but must not unreasonably interfere with owner's rights.
59
Fixtures
A fixture is a chattel attached to property that is treated as part of the property.
Fixture can be removed if seller reserves right to remove fixture in the sale contract, or if the leased property can be restored to its former condition without damage in reasonable time.
60
Types of government zoning
- Based on use (residential, commercial, industrial)
- Development (setbacks, density regulations)
- Special concerns (historic preservation)
61
Non-conforming property - Zoning Laws
An owner can request a special exception permit or an administrative variance. Must show unusual situation, that variance does not deviate from comprehensive zoning plan, and compliance with zoning ordinance would result in unnecessary hardship.
62
Breach of covenant for zoning reasons
Compliance with a zoning restriction does not protect an owner from a suit for breach of a covenant; compliance with a covenant does not protect owner from zoning violation action.
63
Riparian Rights Theory
Water belongs to whoevers land borders the watercourse, and owners may make any reasonable use of the water. Water rights cannot be transferred separate from the adjoining land.
64
Prior Appropriation theory
Water rights are determined by priority of beneficial use; subsequent users must not infringe upon the rights of prior users, water rights may be transferred separately from the adjoining land.
65
Support rights
Support rights is the right to have the land supported in its natural state. Lateral support and Subjacent support.
Lateral:
- If undeveloped (no improvements), landowner who excavates on his land is strictly liable for damage to undeveloped adjoining land.
- If improvements, landwoner who excavates on his land is strictly liable only if adjoining land would have collapsed in its undeveloped state.
- If improvements contribute to collapse, landowner who excavates on his land is only liable if negligent.
Subjacent: Owner of mineral rights is strictly liable for any failure to support land and any buildings on land at the time rights were conveyed.
66
Air rights
Landowner has limited right to reasonable use and enjoyment of airspace above his land as long as it does not interfere with another's reasonable use and enjoyment of land.
67
Covenant of quiet enjoyment
No interference in property from L, but L has duty to control nuisance in common areas. If there is a breach by L, could be eviction.
Actual eviction: if L excludes T, lease terminated and T’s obligation to pay rent ends.
Constructive eviction: Substantial interference caused by L’s acts or failure to act. T must give notice and if L fails to respond,T must vacate.
68
Tenancy-in-common
Default type of tenancy.
Unity of possession required but no right of survivorship. Each co-tenant holds undivided interest with unrestricted right to possess whole. Interest is freely devisable/transferred.
69
Co-tenants: Rent received from third parties
Must account for rent received, but can deduct expenses - net proceeds to be divided between co-tenants based on ownership interests.
70
RAP - Charity to Charity exception
If property passes from one charity to another charity, interest of receiving charity is not subject to the rule.
71
Tenancy-at-sufferance
Where Tenant wrongfully remains in possession after expiration of the lease term. Tenant is bound by terms of the lease which existed before termiantion, including payment rent.
Tenancy-at-sufferance lasts until T vacats, L evicts T, or L holds T to a periodic tenancy
72
Landlord's remedies for tenant's failure to pay rent
Majority View: L can sue for damages, evict T and terminate lease.
Future rent: In most states, no anticipatory repudiation applies. When it does apply, damages are the difference between the future rent and reasonable rental value/actual rent collected from re-letting
73
Type of defeasible fee interest
Fee simple determinable: Limited by specific DURATIONAL language ("so long as", "while", "until"). Grantor retains posssibility of reverter.
Fee simple subject to condition precedent: Limited by specific CONDITIONAL language ("upon condition that", "but if"). Grantor retains right of re-entry based on condition happening.
Fee simple subject to executory interest: Limited by CONDITIONAL language, but right of reverter shifts to a third party.
74
Severence of joint-tenancy
- Sale: Severs as to seller but JT of non-sellers remain intact.
Mortgage: Severs JT under title theory of mortgage, but not lien theory of mortgage.
Judicial lien: Lien will typically not sever a JT.
75
RAP - Measuring Lives
The measuring life must be human, but can be more than one measuring life.
If there is no measuring life, vesting period is 21 years from the time the future interest is created.
76
Seller's duty to disclose defects
In majority of Js, seller has duty to disclose all material phsyical defects taht are known to seller and cannto reasonably be discovered by buyer. A defect is material if:
- It substantially affects value
- It impacts health and safety
- It affects the desirability of the residence of the buyer.
77
Conflict of Laws
Where there is a conflict of laws in property, we generally apply the law of where the property is, unless:
- THe document which conveys the interests specifies a specific jurisdiction's law;
- If the property is acquired through marriage, the law of the spouses' domicile when property is acquried determines if it is marital property.
- Collateral issue - if it is an issue collateral to the proeprty, the state law with the most significant interest controls.
78
Tenancy-for-years
Tenancy of any fixed period, which automatically terminatse at the end of the term with no notice required. It is created by express agreement.
If term is longer than 1 year, SOF applies.
| Like a traditional lease
79
Periodic tenancy
- Ongoing with set periods of time with no pre-determined termination date.
To terminate, notice must be given at leats 6 months in advane. Under CL, oral notice was sufficient, but most states now require some writing.
80
Tenancy at will
No specific terms, and can be created by express agreement or implication.
Terminated by eitehr party with no notice requirement, but under common law L must give T reasonable time to vacate
81
RAP - Basic Rule
Future interests are valid only if they must vest or fail by the end of a life in being plus 21 years, with a fraction of a year added for terms of gestation in terms of posthumous birth
82
Warranty of habitability
The premises must be fit for basic human habitation. If the warranty is breached:
- T must notify L of defect and give reasonable time for L to repair; and
- T can refuse to pay rent, make reasonable repairs and deduct cost for future rent, or seek damages.
83
RAP - Transfer to class gift
If transfer of future interest is made to a class, and RAP voids transfer to 1 or more members of the class, the transfer is void as to all class members.
EXCEPTION: The membership of the class closes if any member is entitled to immediate possession, and it doe snot apply if there is a specific $ amount to each class member or transfers to sub-classes that vest at a specific time.
84
RAP - Cy pres
Some jurisdictions permit the court to reform the conveyance so that it does not breahc RAP.
Court will try to get as close as possible to wish of grantor without breaching RAP.
85
Fair Housing Act
The Federal Fair Housing Act prohibits discrimination in sale, rental and financing of homes. Don't need to prove intent to discrimiante, just impact.
Exemptions: (1) Owner-occupied building with no more than 4 units and (2) single family homes sold/rented without a broker.
86
Present Estates
Present right to posess the property.
1. Fee simple: Absolute ownership.
2. Defeasible fee: Subject to termination by an event.
3. Life estate: Present possessory interest, estate transferrable for measuring life. Right to posess, collect rents, lease/sell/mortgage, but also must pay taxes on benefit from land.
87
Due-on-sale clause
Clause in a mortgage document which allows lender to demand full payment of mortgage debt if property is transferred withotu lender's consent.
Lender can initiate foreclosure proceedings, evne if purchaser did not take on liability for the loan.
88
Vested remainder subject to open
If at least one class member is qualified to take possession at time of conveyance to the class, each class member's share is subject to partial diminuation because additional takers not yet ascertained can vest.
89
RAP - Perpetual Trusts
Some jurisdictions accept equitable interests in property held in trust either automatically or by election. Most requrie that the trustee has the power to sell the property.
90
Tenancy by entirety
Requires same four unities as JT, plus parties must be marreid at time deed is executed or conveyance occurs.
- Need consent to encumber or alienate without consent of other.
91
Co-tenants liability for expenses for repairs
Co-Ts cannot compel other co-Ts to share expenses for repairs by an action for contribution. In action for accounting/partition, neccessary repair expenses are recouped
92
Purchase money mortgage
PMM is a mortgage granted to seller of property if mortgage is given in same transaction in which title is required.
PMM has priority over liens that arose prior to PMM regardless of whether it was recorded, but for subsequent liens recording act will control.
93
RAP - Wait and see
Majority of Js have adopted "wait and see" approach to RAP. An otherwise invalid interest is valid if it does in fact vest 90 years after creation.
94
Future interests subject to RAP
Contingent remainders, vested remainders subject to open, executory interests and powers of appointment. May also apply to rights of first refusal and options unless it is a commercial transaction.
95
