FL Real Property

Question 1

What are successive estates?

Answer 1

Successive estates refers to the situation where ownership passes from one party to other parties over time. Ex: remainders, life estates. - This is what we learn about in law school.

Question 2

What are concurrent estates?

Answer 2

Concurrent estates refers to the situation where multiple parties own a single property at the same time

Question 3

What are the three types of concurrent estates?

Answer 3

1. Tenancy in Common
2. Joint Tenancy
3. Tenancy by the Entirety

Question 4

Define Tenancy in Common. How is the owners’ share of ownership expressed? What are the owners called? What can the owners do with their share?

Answer 4

Tenancy in Common is when multiple parties own a property simultaneously. Each co-owner has a distinct, proportionate, undivided interest in the property. The owners each have a share of ownership expressed as a percentage. The owners are called “co-tenants.” Each owner can sell, devise, or encumber their share and only their share.

Question 5

Define Joint Tenancy. What are the owners called? What can the owners do with their shares? How are the owners’ interests divided and what do they have to have in common? In Florida, what must the granting instrument do to create a joint tenancy?

Answer 5

Joint tenancy is another form of concurrent ownership. Each “joint tenant” has a right of survivorship. The last living joint-tenant becomes the sole owner of the property. The joint tenants cannot devise their share in a will or trust because of the survivorship. Their share disappears upon death and is absorbed by the surviving owners until only one remains.
Each tenant’s interest must be EXACTLY IDENTICAL (i.e. the “four unities” of time, title, interest, and possession must be present).
In FL, the granting instrument must expressly refer to survivorship or the estate will default to a tenancy in common.

Question 6

Define Tenancy by the Entirety. Who can form a tenancy by the entirety? In Florida, how do you form a tenancy by the entirety?

Answer 6

Tenancy by the Entirety is similar to joint tenancy but only available to married couples. Like joint tenancy, it includes survivorship. The surviving spouse automatically becomes the sole owner.
In FL, property owned by both a husband and wife is presumed to be held as tenants by the entirety, unless there is express language creating some other form of ownership.

Question 7

For all forms of concurrent estates, what rights and duties do the owners have in terms of possession, rent, and encumberances?

Answer 7

Each co-owner has the right to possess all portions of the property, but cannot have exclusive possession. Rents and proceeds must be shared according to pro rata interest of ownership.
If one co owner encumbers the property, he has only encumbered his interest in the property.

Question 8

What creditors can/cannot attack the property of a tenancy by the entirety?

Answer 8

The property of a tenancy by the entirety is protected from the creditors of each individual spouse. Only JOINT creditors (creditors of both spouses) can attack the property. This protection applies to ANY asset held in the TBE form (distinction from Homestead protection).

Question 9

What assets can be owned as tenancy by the entirety?

Answer 9

ANY asset can be owned as TBE - art, bank accounts, furniture - assets purchased during marriage are presumed to be owned as tenants by the entirety, if they are owned by both spouses. Note: need to be actually owned by both spouses (distinction from martial assets under family law).

Question 10

T/F: Tenancy in Common and Joint Tenancy do not protect the other
owners from individual creditors.

Answer 10

True. Tenancy in Common and Joint Tenancy do not protect the other
owners from individual creditors.

Question 11

If an individual creditor attacks the property held under tenancy in common or joint tenancy, what can the court do to satisfy the creditor?

Answer 11

Creditor can obtain a judgment from the court against one of the owners, place a lien on that owner’s interest in the property, and foreclose on the lien and become part owner of the property.
The court may also order a partition of the property, to
satisfy the creditor (e.g., physically divide the land into separate parcels), or force sale of the property and split the proceeds
between the remaining owners and the creditor.

Question 12

Conveyancing refers to the __________ and _______ of land and real property.

Answer 12

Conveyancing refers to the BUYING and SELLING of land and real property.

Question 13

Real property transactions are subject to the _________

Answer 13

Real property transactions are subject to the COMMON LAW

Question 14

What are the 2 main conveyance documents?

Answer 14

Purchase agreement and deed

Question 15

What is a purchase agreeemnt?

Answer 15

A purchase agreement is a contract, where the parties exchange promises to
buy and sell land.

Question 16

T/F: The purchase agreement is subject to the statute of frauds.

Answer 16

True.

Question 17

What essential terms must the purchase agreement contian?

Answer 17

The purchase agreement must contain these essential terms: Description of property, parties, and prices

Question 18

T/F: The purchase agreement should be recorded

Answer 18

False. The purchase agreement should NOT be recorded

Question 19

T/F: The purchase agreement does not require witnesses.

Answer 19

True

Question 20

What is a purchase option? Do they have to be stand alone agreements?

Answer 20

Purchase are similar to purchase agreements, but give one party the right to purchase the property at a later time.
They can be stand alone agreements or they can be integrated into other of contracts (like leases or easements).

Question 21

What is a deed?

Answer 21

A deed is a document that serves as evidence of a sale transaction and proof
of ownership.

Question 22

T/F: A deed is subject to the statute of frauds and only signed by the buyer.

Answer 22

False. A deed is subject to the statute of frauds and only signed by the SELLER. (aka the party to be charged w/ breach under the SOF)

Question 23

T/F: A deed must have 2 witnesses and must Must describe the land with sufficient accuracy to transfer title.

Answer 23

True

Question 24

T/F: A deed should be recorded.

Answer 24

True

Question 25

What is the executory period? What happens during this period?

Answer 25

The executory period is the period between signing the purchase agreement contract and the actual transfer of ownership. During this time, the seller and buyer prepare the necessary paperwork, arrange financing, etc.

Question 26

What is an inspection period? When does it occur and what happens during this period?

Answer 26

Purchase agreements also often provide for an inspection period which typically last between 15 to 90 days, during the executory period. During this period, the buyer inspects the property for its structural quality, inspects the title records, and may be able to assert objections or back out of the contract for certain limited reasons.

Question 27

What happens at closing?

Answer 27

Title passes from the seller to the buyer at closing, which occurs at the end of the executory period.

Question 28

Under the doctrine of equitable conversion, once the buyer and seller enter into a purchase agreement, the buyer is deemed to be the“_____________ _________” of the property and the buyer has “__________ ______.”

Answer 28

Under the doctrine of equitable conversion, once the buyer and seller enter into a purchase agreement, the buyer is deemed to be the “EQUITABLE OWNER” of the property and the buyer has “EQUITABLE TITLE.”

Question 29

Under the doctrine of equitable conversion, the seller retains “__________ ____________” to the property, meaning that the property is legally in the seller’s name, and seller has the right to possession until closing. However, the law says that the seller is merely holding the property in _____________ for the benefit of the buyer. So the seller cannot commit ________ during this period or extract resources (like timber).

Answer 29

Under the doctrine of equitable conversion, the seller retains “LEGAL TITLE” to the property, meaning that the property is legally in the seller’s name, and seller has the right to possession until closing. However, the law says that the seller is merely holding the property in TRUST for the benefit of the buyer. So the seller cannot commit WASTE during this period or extract resources (like timber).

Question 30

Equitable conversion allows the contract to be enforced by | ____________ __________ in the event of a breach breach.

Answer 30

Equitable conversion allows the contract to be enforced by | SPECIFIC PERFORMANCE in the event of a breach breach.

Question 31

What happens at closing to buyer's equitable title?

Answer 31

At closing, the buyer’s equitable title merges with the seller’s legal title, and the buyer becomes the full owner.

Question 32

What happens if the property is damaged or destroyed after the purchase agreement is signed? Who bears the loss? Who bears the risk of gain? Can the buyer back out of the contract? What if seller receives insurance funds for the damage? Can parties contract out of this risk assumption?

Answer 32

In FL, the buyer bears the risk of loss, even though the buyer is not in possession, and cannot take precautionary measures to prevent damage (like fires or storms). If there is damage to the property (and it’s not the seller’s fault) the seller may be able to compel the buyer to purchase the damaged property, at full price. If the buyer refuses, he may be in breach of the contract. Typically, accidental damage to the property is NOT a basis for a buyer to back out of a purchase contract. If the seller receives insurance funds for the damage, the seller must pay those funds to the buyer (unless the buyer has his own insurance). Since we impose the risk of LOSS on the buyer, we also give him the risk of GAIN. If the property goes up in value during the executory period, the buyer gets that benefit (i.e., the seller cannot demand more money). The parties can contract out of this default risk allocation and put risk of loss on the seller.

Question 33

Name the 3 kinds of deeds.

Answer 33

1. Quitclaim deed 2. General warranty deed 3. Special warranty deed

Question 34

What is a quitclaim deed?

Answer 34

The grantor makes NO promises about title. | SELLER SAYS: “You get whatever I had."

Question 35

What is a general warranty deed?

Answer 35

The grantor makes certain covenants regarding title to the property. SELLER SAYS: “This property has clean title, trust me. If there’s a problem, I’ll fix it.”

Question 36

What is a special warranty deed?

Answer 36

The grantor warrants that no undisclosed title defects attached during his period of ownership. SELLER SAYS: “I don’t know about what happened in the past, but I haven’t encumbered title in the time that I have owned this property. I will only fix title issues that were caused by me."

Question 37

What are the six deed covenants? | Space Cadet's Engine Quit While Flying

Answer 37

1. Seisen 2. Right to Convey 3. Covenant Against Encumbrances 4. Quiet Enjoyment 5. Warranty 6. Further Assurances

Question 38

What rule statement do you want to include in your essay if you are talking about a general or special warranty deed?

Answer 38

“The traditional covenants included in a warranty deed are seisin, right to convey, covenant against encumbrances, covenant of quiet enjoyment, covenant of warranty and the covenant of further assurances.”

Question 39

What does a Seisen deed covenant say?

Answer 39

Grantor owns and possesses the property.

Question 40

What does a Right to Convey deed covenant say?

Answer 40

Grantor has the authority to convey title.

Question 41

What does a Covenant Against Encumbrances deed covenant say?

Answer 41

There are no UNDISCLOSED encumbrances on title (physical or recorded). The buyer will be subject to all disclosed encumbrances

Question 42

What is an encumbrance?

Answer 42

Encumbrances are claims, liabilities or interests in the property that impair its title. E.g., mortgages, liens, easements, leases, purchase options, encroachments onto other property, etc.

Question 43

What does a Quiet Enjoyment deed covenant say?

Answer 43

There is no third party with a superior claim to | ownership of this property.

Question 44

What does a Warranty deed covenant say?

Answer 44

If a third party establishes a superior claim of title, the grantor will compensate the grantee for the loss. If there is a violation of any of the other covenants, it will be enforced through the covenant of warranty.

Question 45

What does a Further Assurances deed covenant say?

Answer 45

“Catch-all” covenant where the grantor promises to take any acts that are reasonably necessary to pass marketable title to grantee.

Question 46

Which type of recording statute is applicable in the state of Florida?

Answer 46

Florida is a PURE NOTICE jurisdiction.

Question 47

What does a pure notice recording statute say? What are the consequences of this statute? Are recording instruments important under this approach?

Answer 47

The last bona fide purchaser gets title. If there is a dispute where multiple parties claim to be owners of a property, the last “bona fide purchaser” will prevail, even if the other competitors are also BFPs. Recording instruments at the clerk’s office is still important because it affects whether other buyer s can be BFP s or not. But unlike the “race” jurisdictions, it is not the way to prevail. The only thing that truly matters is figuring out whether the last claimant is a BFP . If he’s a BFP, he will prevail.

Question 48

Who is a bona fide purchaser in Florida?

Answer 48

To be a BFP in Florida, the grantee must: 1. Give value, and 2. Have no notice of conflicting claims, conveyances or encumbrances at the time of the transaction

Question 49

Under the definition of bona fide purchaser, what does value mean?

Answer 49

Value is typically money. You do not need to pay “fair market value" but you do need to pay more than a token amount. If you inherit the land, you are not a BFP b/c you gave no value (regardless of whether you had notice)

Question 50

What are the three kinds of notice you can have under the bona fide purchaser definition?

Answer 50

1. Actual notice 2. Constructive notice 3. Inquiry notice

Question 51

What is actual notice under the bona fide purchaser definition?

Answer 51

The buyer subjectively knew about the claim.

Question 52

What is constructive notice under the bona fide purchaser definition?

Answer 52

There is evidence of the claim in the public records (regardless of whether the buyer discovers that notice). Note: if deed recorded in public records but with a mistake making it hard to find, the dispute will be on how hard it was to find the deed b/c of error

Question 53

What is inquiry notice under the bona fide purchaser definition?

Answer 53

Conditions at the property put the buyer on notice that he should investigate title further. If buyer then FAILS to investigate, he is deemed to have inquiry notice.

Question 54

What is a mortgage transaction?

Answer 54

This is where the buyer borrows money to purchase real property, and gives the property as collateral for the loan.

Question 55

What 2 documents is a mortgage transaction evidenced by?

Answer 55

The transaction is evidenced by two documents: a NOTE and a MORTGAGE.

Question 56

In a mortgage transaction, what is the note? Should it be recorded?

Answer 56

The note is a promise to repay the money at a future | date, or in installments over time. The note should not be recorded.

Question 57

In a mortgage transaction, what is the mortgage? Should it be recorded?

Answer 57

The mortgage is a security instrument. It states that if the buyer/borrower fails to make payments , the lender can take the property via foreclosure. The mortgage should be recorded.

Question 58

In a typical mortgage transaction, the buyer becomes the _________________ of the land. The lender only has a __________ interest. Florida is a _________ __________ state, meaning that the lender has _____ ___________ interest in the property until foreclosure.

Answer 58

In a typical mortgage transaction, the buyer becomes the OWNER of the land. The lender only has a SECURITY interest. Florida is a LIEN THEORY state, meaning that the lender has NO OWNERSHIP interest in the property until foreclosure.

Question 59

What is another way to structure a mortgage transaction?

Answer 59

Another way commonly used on the bar is the Installment Land Contract, also known as a Contract for Deed.

Question 60

What is an Installment Land Contract?

Answer 60

Here, the lender is the owner of the property. The buyer has the right to use and possess the property, and makes payments over time. If the buyer defaults on his payments, the lender/owner can retake possession. If the buyer makes all payments, the lender/owner transfers the deed to buyer on the date of the last payment. This is most common when the seller is acting as the lender.

Question 61

What is the purpose of Installment Land Contracts and how does Florida treat them? What protections do buyers get?

Answer 61

Installment Land Contracts are designed to avoid the complex judicial foreclosure process. However, in Florida we essentially treat Installment Land Contracts as mortgages. Borrowers are entitled to the protections of mortgage law, and the property can only be taken via judicial foreclosure just like an ordinary mortgage.

Question 62

If the property has a physical defect, what 3 questions do you ask?

Answer 62

1) Is this residential or commercial property? 2) Is the defect obvious or hidden? 3) Did the seller lie or conceal the defect? Do NOT use deed covenants - those relate to title issues.

Question 63

What are the sellers duties with respect to residential property? What about commercial property?

Answer 63

Residential property: The seller has a duty to disclose HIDDEN defects, even if the buyer conducts an independent inspection. Commercial property: Caveat emptor! Buyer beware! The seller is under no duty to actively disclose any defects. The buyer has the burden of discovering all defects. For mixed used property, answer using both analyses

Question 64

What are the sellers duties with respect to hidden defects for residential property? What about obvious defects?

Answer 64

Obvious defects: A residential seller has no duty to disclose the existence of defects that would be discovered by an ordinary inspection. Hidden defects (latent): A residential seller has an affirmative duty to disclose the existence of hidden defects if: 1. The seller knows or should know about the defect; 2. The defect is latent, and would be difficult for the buyer to discover during an ordinary inspection (e.g., it occurs seasonally); and 3. The defect is serious, and would probably cause the buyer to reconsider the purchase if known.

Question 65

What is active concealment of a property defect?

Answer 65

Active concealment: The seller takes intentional steps to conceal a defect in the property.

Question 66

What constitutes misrepresentation or fraud in regards to property defects?

Answer 66

Misrepresentation or fraud: The seller knowingly or negligently made a false statement of fact to the buyer, the buyer relied on the statement, and the statement materially affected the value of the property.

Question 67

What is the remedy for active concealment or fraud regarding property defects?

Answer 67

The remedy for active concealment or fraud is rescission - K is voided & restitution

Question 68

Commercial sellers (CAN/CANNOT) be liable for concealment or fraud of property defects.

Answer 68

Commercial sellers CAN be liable for concealment or fraud of property defects.

Question 69

A general disclaimer like “property sold as-is” or "with all faults” (DOES/DOES NOT) absolve a seller of liability for active concealment or fraud. “As is” disclaimers are probably also ____________ to overcome a claim for undisclosed latent defects in residential property. But, a specific disclaimer like “Seller makes no warranties as to the condition of the roof ” would probably be _________.

Answer 69

A general disclaimer like “property sold as-is” or "with all faults” DOES NOT absolve a seller of liability for active concealment or fraud. “As is” disclaimers are probably also INEFFECTIVE to overcome a claim for undisclosed latent defects in residential property. But, a specific disclaimer like “Seller makes no warranties as to the condition of the roof ” would probably be EFFECTIVE.

Question 70

What is an easement? What kind of interest is an easement?

Answer 70

An easement grants the beneficiary a right to use land possessed by another. Easements are nonpossessory interests.

Question 71

What is the servient tenement?

Answer 71

The servient tenement is the parcel of land subject to the eastement.

Question 72

What is the dominant tenement?

Answer 72

The dominant tenement is the parcel of land that is the beneficiary of an easement.

Question 73

Who is an easement holder?

Answer 73

The easement holder is the individual who is the beneficiary of an easement.

Question 74

Easements are ___________ in land, and therefore subject to the ______________. So most easements must be in ___________.

Answer 74

Easements are INTERESTS in land, and therefore subject to the STATE OF FRUADS. So most easements must be in WRITING.

Question 75

What are 2 ways to obtain an easement without a written instrument?

Answer 75

1. Easement by necessity | 2. easement by prescription

Question 76

When does an easement by necessity exist? What 2 forms of easement by necessity are recognized in FL?

Answer 76

An easement by necessity exists when the dominant tenement cannot be beneficially enjoyed without using an easement over the servient tenement (e.g., the dominant tenement is landlocked or waterlocked). Florida recognizes two forms of easements by necessity: common law and statutory

Question 77

What is the common law easement by necessity? How do you obtain it? What can you use it for?

Answer 77

The common law easement by necessity is referred to as an “implied easement." To obtain an implied easement: 1. The easement must be necessary for beneficial use or enjoyment of the dominant tenement, AND 2. The dominant and servient tenement share unity of title. This easement may be used for a means of entrance or exit from the property, access to a necessary utility line, or some other necessary usage particular to the property.

Question 78

What does unity of title mean?

Answer 78

Unity of title means that the two parcels were once a single parcel of land . When they were divided into two parcels, the dominant tenement was cut off from the means of access. So, an easement will be implied by the prior use (from when the two parcels were united). If the parcel was cut off from access to a public roadway, an easement is granted across the servient tenement to access the road. If the parcel was cut off from utilities, an easement is granted to connect utilities across the servient tenement.

Question 79

What is a statutory easement by necessity? How do you obtain it in FL? When is this easement available? Can you use this easement if you are eligible for a common law easement?

Answer 79

Florida has a unique statutory easement by necessity. To obtain this easement: 1. There must be no practicable route to enter on or exit from the dominant tenement, due to adjacent lands, fencing or other improvements , AND 2. The dominant tenement is used for dwelling or agricultural purposes. There is no “unity of title” requirement. You cannot obtain this easement if the dominant tenement is used for commercial or industrial purposes. If you are eligible for the common law easement , you CANNOT use the statutory easement.

Question 80

What is an easement by prescription? What are the elements required? What is not required?

Answer 80

Look for someone using (but not possessing) property belonging to another for an extended period of time. Elements: 1. Adverse (constitutes a trespass) 2. Continuous and uninterrupted for the statutory period of 20 years 3. Hostile (w/o permission) 4. Open and notorious (owner could discover) Exclusivity not required

Question 81

What is a license? Is it revocable?

Answer 81

A license is a privilege to enter upon the land of another. Unlike an easement, a license does not create any interest in the real property. It is “permission” to be on the property without trespassing. Licenses are revocable at the will of the grantor. The property owner will often argue that the plaintiff doesn’t actually have an easement he has a mere license - counterargument to easement argument.

Question 82

What are real covenants and equitable servitudes?

Answer 82

Real covenants and equitable servitudes are promises to do something on land, or promises to refrain from doing something on land.

Question 83

What is a real covenant? What is the remedy for a violation of a real covenant? Who do the real covenants bind and benefit? What are the required elements?

Answer 83

Real covenants are written promises to do something (or not do something on real property. Remedy for violation = damages/cash Effective real covenants run with the land - they bind future owners of the servient tenement, and benefit future owners of the dominant tenement(s) Elements: 1. Privity 2. Intent 3. Notice 4. Touch and Concern

Question 84

What is an equitable servitude? What is the remedy for a violation? What are the required elements?

Answer 84

Equitable servitudes do not need to be in writing (though they can be). Remedy = injunction Elements: 1. Intent 2. Notice 3. Touch and concern

Question 85

What is privity? What are the two types? What should you say on the bar about privity and real covenants?

Answer 85

Privity loosely refers to the existence of a special relationship, often formed by contract. There are two types of privity: horizontal and vertical. “In order for a real covenant to run with the land, vertical privity is required. Horizontal privity may also be required.”

Question 86

Can a real covenant be enforced as an equitable servitude?

Answer 86

Yes. Any real covenant can also be enforced as an equitable servitude (and therefore, specific performance and injunction is possible), b/c the elements are sufficient to simultaneously create an equitable servitude. However an equitable servitude cannot be enforced as a real covenant, because privity is lacking