MBE Notes Flashcards
1
Q
Is a general ‘as is’ disclaimer sufficient to disclaim:
- A warranty of fitness?
- The duty to disclose?
A
In a land sales contract, an ‘as is’ disclaimer is insufficient to disclaim the warranty of fitness for new builds.
An ‘as is’ disclaim is sufficient to disclaim the duty to disclose (but not for misrepresentation or fraudulent concealment)
2
Q
What happens if both parties fail to perform their obligations in a land scales contract?
A
If both parties fail to perform their obligations in a land sales contract, the closing date is extended until one party either repudiates or performs.
3
Q
What happens if one party repudiates in a land sales contract?
A
The other party’s obligation to perform is excused.
4
Q
If a seller fails to disclose a material, physical defect to a home buyer, what can the buyer do?
A
The buyer can either rescind the contract or seek damages. The buyer can also sue for misrepresentation or fraudulent concealment.
5
Q
What is the seller’s duty to disclose defects to a buyer?
A
A seller must disclose all material defects to the buyer.
6
Q
A seller has the duty to disclose material defects. What does ‘material’ mean?
A
Material means a defect that:
- Substantially affects the value
- Impacts health or safety
- Influences desirability of the property
7
Q
What damages are available for a breach of the warranty of fitness (new builds)?
A
For a breach of the warranty of fitness, the buyer can claim the cost of repair to bring the home into compliance with the warranty.
If the defect cannot be fixed without significant damage, buyer can recover the difference between the home with and the home without the warranty.
8
Q
When must a buyer bring a claim for breach of the warranty for fitness (new builds)?
A
Within a reasonable time. The statute of limitations runs from when the buyer learns about the defect.
9
Q
Can a seller compel a buyer to purchase property under specific performance?
A
Yes, this is called the mutuality of remedies.
10
Q
True or False:
Buyers are entitled to specific performance of a land sales contract because monetary damages are inadequate to the cure the loss
A
True - land is a unique commodity, so monetary damages are inadequate to cure.
11
Q
What damages are available to a seller if the buyer breaches a land sales contract?
A
The seller can keep the buyer’s deposit as liquidated damages.
12
Q
If a seller is entitled to keep the buyer’s deposit as liquidated damages, what percent of the purchase price is usually considered reasonable?
A
10% of purchase price is reasonable as liquidated damages for a buyer’s breach
13
Q
What damages are available to a buyer for breach in a land sales contract?
A
The buyer is entitled to expectation damages if the seller is in breach.
Some jurisdictions limit this to the buyer’s out-of-pocket expenses if the seller cannot delivery marketable title but acted in good faith.
14
Q
Can government-owned land be adversely possessed?
A
No, government owned land cannot be adversed possessed.
15
Q
What is the doctrine of equitable conversion?
A
The doctrine of equitable conversion states that equitable title passes to the buyer upon entry of the land sales contract. The seller holds property in trust for the buyer while the seller maintains possession.
16
Q
What is the rule with ‘time is of the essence’ clauses in land sales contracts?
A
Unless stated otherwise, time is NOT of the essence. However, a party who fails to perform on time (at closing) is in breach. But the contract cannot be rescinded for mere delay.
17
Q
When is a seller expected to deliver marketable title?
A
At closing
18
Q
Can a seller use sale proceeds to cure title defects?
A
Yes, a seller can use sale proceeds to cure a title defect (e.g. paying off an existing mortgage).
19
Q
If title is unmarketable, a buyer may…
3 things
A
- Rescind the contract and recover damages
- Sue for breach
- Seek specific performance with a price adjustment
20
Q
What is the implied covenant of marketable title?
A
The seller promises that the title is free from defects that pose an unreasonable risk of litigation
21
Q
Can oral land sales contracts be rescinded?
A
Yes
22
Q
What are the five required elements for adverse possession?
A
Open and notorious
Continuous
Exclusive
Aactual
Non-permissive (hostile)
23
Q
What is the mnemonic device to remember the elements of adverse possesion?
A
OCEAN
24
Q
What are the two categories for remedying a land sales contract breach?
A
Damages and specific performance
25
What happens if a buyer or seller dies after a land sales contract?
If either dies, the proceeds (or the property) go to their respective devisee.
26
Who bears the risk of loss if there is damage to (or destruction of) the property being sold between execution of the contract and closing?
| Majority and minority position
The majority position is that the buyer bears the risk as holder of equitable title.
The minority position is that the seller bears the risk of loss until closing.
27
What is the rule for causalty insurance in a risk of loss scenario?
The seller is not required to purchase / have casualty insurance, but if they do they must offset the insurance proceeds against the purchase price.
A buyer may purchase casualty insurance as equitable title holder.
28
What is an 'option' in a land sales transaction?
Is it subject to the Statute of Frauds or RAP?
An option grants the right to purchase property within a specied period of time. During that time, the offer cannot be revoked.
Subject to Statute of Frauds but not RAP.
29
What is an 'right of first refusal' in a land sales transaction?
Is it subject to the Statute of Frauds or RAP?
A right of first refusal allows a holder to buy property before it is transferred to another. This right is valid unless unreasoanable.
Subject to Statute of Frauds but not RAP.
30
What is the implied warranty of fitness/suitability?
Applies to new build properties. Warrants the use of adequate materials and workmanship.
Replaces the common law 'caveat emptor'
Also applies to latent construction defects
31
What is the merger doctrine in a land sales contract?
After closing, all obligations contained in the contact are merged into the deed. If something was featured in the contract but not reflected in the deed, that cause of action is lost.
All remedies flow from the deed.
32
What is the continuous requirement for adverse possession?
Requires uniterupted possession for the statutory period.
Seasonal or infrequent use is allowed if typical for the property type.
33
# True or False
The clock for adverse possession does not run if the property's true owner has a disability at the start of the adverse possession.
True - disability covers both serious illness and incarceration.
34
What do we do to an interest that violates the Rule Against Perpetuities?
We strike out the offending interest that violates the Rule Against Perpetuties
35
# True or False
A grantor can disclaim the Rule of Convenience
True. It is just a rule of interpretation, so it can be disclaimed.
36
The Rule Against Perpetuities does not apply to property transferred between ________.
charities
37
What are two exceptions to the 'bad as to one, bad as to all' rule?
(1) Transfer of a specific dollar amount to each class member
(2) Transfer to a subclass at a specific time
38
What is the Rule of Convenience?
A rule of interpretation used to save class gifts from violating the Rule Against Perpetuities.
A class closes when any member of the class is entitled to immediate possession of their share.
39
What is the 'bad as to one, bad as to all' rule?
If the Rule Against Perpetuities, invalidates the interest of even one member of a class, ALL class members lose their interest (even if they've already vested)
40
What estates does an executory interest follow?
Defeasible fees and the life estate
41
How do Eastern and Western states differ in their approach to groundwater?
Eastern States: follow a reasonable use or absolute ownership approach. Broad extraction of groundwater is allowed.
Western States: follow a prior appropriation or correlative rights approach - balancing reasonable use among landlords.
42
What is the rule for navigable waterways?
Controlled by the government for public use
43
What are the three doctrines/approaches for dealing with surface water?
**(1) Common Enemy Doctrine:** landowners can take steps to control/combat water flow but liability may arise if they negligently cause harm.
**(2) Natural Flow Theory**: restricts any waterflow alteration unless reasoanble modification is justified
**(3) Modern Trend**: negligence-based reasoanble use
44
What is the Riparian Rights approach to water rights?
Water belongs to landowners adjacent to the watercourse. What matters is whether you border the waterway.
Riparians share the right to reasoanble use (although domestic use takes priority).
45
What is the prior appropriation approach to water rights?
Adopts a first in time, first in right approach.
The first person to use water (regardless of where their land is located) has the rigth to it.
The user must put the water to beneficial use, but any productive use counts.
46
What is spot zoning?
Arbitrary discrimination against (or in favor) of the owner of rezoned land
47
# True or False
Leases under one year are subject to the Statute of Frauds.
False, only leases more than one year are subject to the Statute of Frauds.
48
How can partial performance satisfy the Statute of Frauds in a land sales contract?
Any two of the following:
- Possession by the buyer
- Substantial improvements made to the property
- Payment of purchase price
49
# True or False
If the opposing party in a land sales contract acknowledges a contract exists, it may be enforceable without writing.
This is true - this is called a judicial admission.
50
When a party to an oral contract who has promised to convey land fully performs, that party can ____________.
Demand the other party's oral promise to perform in turn
51
What are some other ways (besides writing) to satisfy the Statute of Frauds with a land sales contract?
| There are 3
- Full or partial performance
- Detrimental reliance
- Admission in court
52
For a land sales contract, what three requirements must be met to satsify the Statute of Frauds?
(1) Must be in writing
(2) Must be signed by the parties to be charged
(3) Must contain essential terms (i.e. parties, description, and price)
53
After the doctrine of merger occurs in a land sales contract, any liability must be based on __________.
A deed warranty
54
What are the two crucial stages in a land sales contract?
(1) Contract formation
(2) Deed execution
55
Who is responsible for rent in a sublease?
Just the original tenant
56
Who is responsible for rent in an assignment?
Both the original tenant and the subsequent tenant. The tenant is in privity of contract and the subsequent tenant is in privity of estate.
57
What is condemnation (both partial and complete)?
The taking of land either for public use or because the land is unfit for use.
Partial: only some of the property is taken
Complete: entire property is taken
58
The building where a tenant is staying is condemned. Are they still liable to pay rent?
| Consider both partial and complete condemnation
**Partial**: tenant must still pay rent, but they are entitled to compensation for the property taken
**Complete**: the tenant is discharged from rent obligations and can seek damages
59
What are the two types of zoning variances?
1. **Use Variance** - refers to the right to use property in a way not permitted by zoning
2. **Area Variance** - refers to the structural and spatial restrictions on building
60
What must you show to obtain a zoning variance?
(1) Compliance creates hardship, which arises from unique circumstances
(2) Owner did not create the hardship
(3) Variance is in keeping with the overal purpose of the ordinance and will not cause harm to the general welfare
61
Can a nonconforming use be exapanded? Transferred?
Expanded: no
Transferred: yes
62
What is a nonconforming use and what is the goal of property owners with a nonconforming use?
When a zoning law is changed and a structure already there no longer satisfies the new requirements.
Goal: get your property grandfathered in
63
What are the two approaches to zoning?
(1) Cumulative Zoning: residential use is permitted everywhere and commercial use is restricted. Industrial use is most restricted.
(2) Mutually Exclusive Zoning: only one type is permitted by zone
64
Who has the authority to enact zoning laws?
Federal Government: usually limited to powers regulating federal land or DC
State Government: can enact zoning laws under their broad police powers - often delegates to local governments
65
For life tenants and leasehold tenants, the presumption is that they can ______ fixtures unless doing so would _______ the property.
remove
permamently damges
66
67
What are some defenses to an action for breach of an equitable servitude?
1. Unclean hands
2. Laches
3. Acquiescence
4. Changed circumstances
5. Estoppel
68
What is an implied reciprocal servitude?
These are commonly found in planned/common communities.
This requires a common scheme and an intent ot create covenants on all plots. Must show reciprocal promises, that the promise is restrictive, and that the successor was on notice.
69
What is required for the benefit to run with an equitable servitude?
Writing
Intent
Touch and Concern
70
# True or False
Equitable servitudes do not require privity
True!
71
For a burden to run with a real covenant, what is needed?
Writing
Inent
Touch and Concern
Vertical Privity (strict)
Horizontal Privity
Notice
72
For a benefit to run with a real covenant what is needed?
Writing
Intent
Touch and Concern
Vertical Privity (relaxed)
73
Notice for a covenant or servitude is only required for the _______ to run.
burden
74
What is the difference between a real covenant and an equitable servitude?
The remedy sought.
If monetary damages, real covenant.
If injunctive relief, equitable servitude.
75
What is teh duty of maintain an easement?
All users of an easement must maintain the easement. One user may seek contribution from another for cost of reasonable repairs and maintainance.
76
How do you terminate an easement?
1. Merger
2. End of necessity
3. Express release
4. Abandonment
5. Estoppel
6. Severance
77
To say someone has abandoned an easement, what must be shown?
Requires more than non-use. We are looking for an affirmative act of abandonment.
78
What is an easement by estoppel?
Arises when a property owner givers another permission to use their land and the user detrimentally relies on that promise. Such reliance must be reasonable.
When permission is withdrawn, estoppel prevents the owner from rescinding their permission to the user.
79
What is an easement by necessity?
An easement by necessity will be found only when absolutely necessary to prevent land from becoming entirely useless.
E.g. landlocked
Easements by necessity require common ownership, then severance, then a need. It ends when the necessity is abated.
80
What is an easement by implication?
An easement by implication (also called 'prior use') is there land is owned by one person, then gets severed into two estates, and the original owner continues to use the land that no longer belongs to her.
Prior use must be contintuous and apparent at the time of the severance.
81
What is an easement by prescription?
Similar to adverse possession.
An easement user acquires the right to use another's land. That use must be: continuous, open and notorious, and actual (but not exclusive or hostile).
82
What happens if the easement user exceeds the scope of their easement?
An easement user who exceeds the scope of their easement has trespassed.
83
What happens if an easement user wants to change the use?
Any change in use of an easement has to be reasonable.
The desired change must have been an ordinary and reasonably foreseeable development when the easement was granted.
84
How do courts determine the scope of an easement?
Courts look to the reasonable of the use and the intent of the parties.
85
If the scope of an easement is ambiguous, the ambiguity is solved in favor of the __________.
Grantee
86
What are the four kinds of implied easements?
1. Easement by necessity
2. Easement by implication
3. Easement by prescription
4. Easement by estoppel
87
What mnemonic device can be used to remember the implied easements?
PINE
(prescription, implication, necessity, and estoppel)
88
Are express or implied easements subject to the Statute of Frauds?
**Express**: yes, must be in writing
**Implied**: no
89
A negative easement must be created _________ and not by implication.
Expressly
90
An easement can be created by _______ or by _______.
Grant or reservation
91
What is an easement in gross?
An easement granted to a particular person (as opposed to the land)
92
When is an easement in gross transferable?
| What happens to the benefit and burden if transferred?
**Burden**: transfered automoatically
**Benefit**: transferable if commercial or the parties intended it.
93
What is an easement appurtenant?
An easement that runs with (and is tied to) the land.
94
How is an easement appurtenant transfered? What happens to the benefit/burden?
An easement appurtenant transfers wtih the dominant estate.
Benefit and burden are automatically transfered
95
How does the doctrine of merger apply to mortgages?
When the same person becomes both the owner of the property and the holder of the mortgage, the mortgage is extinguished.
You cannot owe a debt to yourself.
96
Acceptance of a deed is _________ for any transfer that benefits the grantee.
presumed
97
What are some examples where delivery of a deed has not occurred?
1. When the grantor delivers the deed to his agent.
2. When the grantor transfers the deed to a third party on the condition that she keep the right to recover the deed.
3. When the grantor keeps the deed herself.
98
What are some ways to deliver a deed?
(1) Physical delivery to grantee or their agent
(2) Transfer to an indepedent third party
(3) Escrow in contract
99
To effectuate a deed, what three things must happen?
(1) Grantor must intend to make a present transfer
(2) Grantee must accept there interest
(3) The transfer must comply with the Statute of Frauds
100
What does 'color of title' mean?
A claim to ownership of land based on a written document that appears valid on its face but is actually defective.
101
What is constructive adverse possession?
Occurs when an adverse possessor enter under color of title from an invalid instrument and occupies a portion of the property described in the instrument.
The adverse possessor is in actual possession of the occupied land, but is ALSO in constructive possession of the remaining land named in the deed.
102
For the hostile element in adverse possession, what is the split of opinion?
The split of opinion between the majority and minority is over whether we take a subjective or objective approach to the APer's state of mind.
**Majority**: ignores subjective intent. Must show an objective intent to claim land/property as her own.
**Minority**: considers subjective intent.
- Good Faith: must believe that the proeprty is unowned (or she owns it)
- Bad Faith: aggressive trespass
103
What is 'tacking' in adverse possession?
Successive possessor can combine periods of possession if they are in privity and there are no gaps or ouster.
104
What is the cy pres doctrine for the Rule Against Perpetuties?
Courts may reform a conveyance to align 'as close as possible' with the transferor's intent while still complying with RAP.
105
What is the 'wait and see' approach for RAP?
Any interest is valid if it vests or fails within 90 years.
106
What are two modifications to the Rule Against Perpetuties adopted by several jurisdictions?
(1) Wait and See approach
(2) Cy pres
107
What are five common Rule Against Perpetuties violations?
Five common RAP violations:
1. Fertile Octogenarian
2. Unbown Widow
3. Age Contingencies > 21 Years
4. Conditional Passage of an Interest
5. Defeasble Fee Followed by Executory Interest
108
What is a vested remainder subject to complete divestment?
A remainder where the occurence of a stated event will completely divest the person of their interest
109
What two things can a future interest holder do if the life tenant fails to pay?
(1) Pay expenses themselves and seek reimbursement
(2) Place a lien on the life estate and enforce it through judicial sale
110
In a life tenancy, who pays for public improvement assessments?
Allocated between the life tenants and future interest holders.
111
What is the doctrine of worthier title? What is its status today?
At common law, this doctrine prevented the creation of a remainder in the grantor's heirs.
Today, heirs take a contingent remainder.
112
What is the Rule in Shelley's Case? What is its status today?
The Rule in Shelley's Case prevents the creation of a contingent remainder in a grantee's heirs.
Abolished today.
113
What is required for a vested remainder subject to open?
A remainde ris given to a group or class and at least one member is ascertainable and has a right
and
the group is not yet closed because more individuals could be added
114
What future interests are subject to the Rule Against Perpetuties?
| There are three main ones.
1. Contingent remainders
2. Vested remainders subject to open
3. Executory interests
115
What is the Rule Against Perpetuties?
To avoid uncertainty, a future interest must vest or fail within a life in being plus 21 years.
If we will not know within that time if the interest vests (or fails), the future interest is struck.
116
What is a shifting interest?
A shifting interest cuts short the prior estate held by another **grantee**.
117
What is a springing interest?
A springing interest cuts shorts the **grantor**'s interest.
118
What is the rule for life tenants and property taxes?
Life tenants must pay property taxes or interest payments *to the extent they receive a financial benefit from the land*.
119
If the life tenant occupies the property, then the life tenant is responsible for property taxes only to the extent of _____________.
The fair rental value of the property
120
Can a holder of a future interest sue a life tenant?
Yes, they can bring suit for an injunction to stop harmful action such as decrease in value.
121
For life tenants, when is ameliorative waste permitted?
Ameliorative waste is permitted when the change is necessary because of shifting neighborhood surroundings.
122
What limits the life tenant's ability to use the land?
The life tenant must avoid committing waste.
123
What are some of the major rights of life tenants?
* Right to possess
* Right to collect rent, lease, sell, and mortgage
124
What are the three kinds of waste?
(1) Permissive Waste
(2) Voluntary Waste
(3) Ameliorative Waste
125
Differentiate between a remainder, executory interest, and reversion.
**Remainder**: future interest that becomes possessory immediately and wtihout conditions upon natural expiry of previous estate - does not cut short
**Executory interest: **cuts short another estate
**Reversion**: ownership reverts back to grantor
126
What is a fee tail?
Limits the estate to the grantee's lineal blood descendents
127
What is the difference between a vested and contingent remainder?
Vested: requires the interest holder be ascertainable and there be no conditions precedent.
Contingent: everything that's not vested
128
What are the four possessory estates?
1. Fee simple absolute
2. Life estate
3. Defeasible fee
4. Fee tail
129
What future interest accompanies the fee simple subject to condition subsequent?
Right of entry
130
What future interest accompanies a fee simple determinable?
possibility of reverter
131
What happens if a lease prohibits assignment or subleasing?
A lease can prohibit assignment/subleasing but the tenant can technically still make the transfer.
However, the landlord may terminate for breach and recover losses.
132
What are the 3 possible future interests that go with the life estate?
(1) Remainder
(2) Executory interest
(3) Reversion
133
What are the four commonly recognized negative easements?
- Light
- Air
- Support
- Stream water from artificial flow
134
A landlord transfers their interest to someone else. What can the new landlord do/not do?
The new landlord is bound by the terms of the existing lease.
New landlord must get permission from tenant to make any changes.
135
A landlord transfers their interests to a new person. What are the tenant's obligations with respect to their new landlord?
Tenant's obligations arise automatically upon notice of the assignment to a new landlord.
136
What is the majority and minority position on when a landlord may deny a tenant permission to assign or sublease?
**Majority**: may only deny permission for a reasonable commercial reason.
**Minority**: can deny permission at their discretion
137
A tenant rents from a landlord. The landlord conveys the property to a new owner. Must the new owner perform all burdens imposed by the previous lease covenant?
Yes
138
What is attornment?
The tenant's acknowledgement of the new landlord
139
# True or False
A sublessee can enforce all covenants made by the original lessee but not any made by the landlord.
True! Sublessees are not in privity of estate with the landlord, so they cannot enforce any covenants.
140
What needs to happen for a tenant to get out of being rent-liable to a landlord in an assignment/sublease situation?
The tenant will be liable for lease covenants (including the duty to pay rent) unless there is a **novation**.
141
In an assignment, the landlord is in privity of __________.
privity of contract with the original tenant and privity of estate with sublessee
142
In a sublease, the landlord is in privity of ____________.
privity of contract and estate with tenant
(nothing with sublessee)
143
What is a sublease?
Where a tenant transfers something less than their entire lease term to another.
Tenant retains a reversionary interest.
144
What is an assignment?
A complete transfer of the remaining lease term
145
What are the tort liabilities of a landlord at common law?
Liable for:
* Injuries in common and public areas
* Non-common areas under the landlord's control
* Hidden defects and faulty repairs done by the landlord or their agent
146
What are the tort liabilities of a landlord in the modern trend?
General duty of reasonable care. Liable for defects prior to the tenant's occupany, failures to repair, and criminal activities of third parties who injure the tenant.
147
What are the tort liabilities of the tenant?
Tenants owe a duty of care to invitees, licensees, and foreseeable tresspassers. They may also be liable for dangerous conditions and activities that cause harm.
148
Where should a tenant's security deposit be kept and what happens to it after a lease ends?
A tenant's security deposit should be kept in a separate escrow account. After the lease ends, it should be returned promptly to tenant unless reason for retaining it.
149
What is the retaliatory eviction doctrine?
The retaliatory eviction doctrine prevents landlords from evicting tents who either:
- Make a good faith housing code violation
- Withhold rent due to the landlord's breach of the warranty of habitability
150
# True or False:
A landlord is not responsible for nuisance behavior of off-premises third parties.
True!
151
Under the covenant of quiet enjoyment, landlords are also responsible for _______ and _______.
addressing nuisance behavior of other tenants
controlling common areas
152
To show constructive eviction under the implied covenant of quiet enjoyment, what four elements must be present?
1. The property is unusable for its intended purpose
2. The tenant notified the landlord of the problem
3. The landlord did not correct the problem
4. The tenant vacated the property after a reasonable period.
153
What is the implied warranty of quiet enjoyment?
When the landlord takes action that wholly or substantially makes the premises unsuitable, and the tenant is constructively evicted as a result.
154
A tenant must vacate if which of the covenants are breached?
The implied warranty of quiet enjoyment
155
A tenant believes their home is uninhabitable. What must they do before withholding rent?
They must notify the landlord and give the landlord a chance to fix the issue.
156
What is the implied warranty of habitability?
The landlord promises to maintain the property so that it is suitable for residential use.
Our concern with this warranty is with conditions that threaten health and safety.
157
Can a tenant waive the implied warranty of habitability?
No, tenants cannot waive the implied warranty of habitability (even if they have knowledge of defective conditions).
158
A landlord breached the implied warranty of habitability. What may the tenant do?
If the premises is not habitable, the tenant has three options. She may:
* Refuse to pay rent
* Remedy the defect herself and offset the cost against her rent due
* Defend against eviction if the landlord tries to evict for non-payment of rent
159
What are the two implied warranties a landlord makes to their tenant(s)?
(1) The implied warranty of habitability
(2) The implied warranty of quiet enjoyment
160
A tenant causes damage to the property during their lease. Must the landlord make the repair?
No, the landlord does not have to repair tenant-caused damage.
161
What is the legal consequence if a landlord fails to deliver possession?
| Majority
A landlord's failure to deliver possession relieves the tenant of their obligation to pay rent.
162
What is the landlord's duty to deliver a tenant possession?
| State both the majority and minority view
**Majority**: the landlord must deliver actual, vacant (phyiscal) possession.
**Minority**: the landlord need only deliver legal possession.
163
# True or False
A landlord who accepts late rent from a tenant retains the right to sue to remove them.
False - acceptance of late rent waives the right to evict.
164
Is anticipatory repudiation available in most states for landlord/tenant disputes?
No, anticipatory repudiation is not availabe in most states for landlord/tenant disputes. Even where it is available, damages are limited to the difference between the future rent and either (i) reasonable rental value, or (ii) actual rent collected from re-letting.
165
What qualifies as a holdover? What does not qualify?
A holdover is where the tenant remains on the property past the expiry of their lease term.
Merely leaving behind a few personal items or staying behind for a short period due to an unavoidable reason beyond tenant's control (e.g. severe illness) does not qualify as holding over.
166
What can a landlord do if a tenant holds over after their lease ends?
If a tenant holds over after their lease ends, the landlord may:
* Move to evict the tenant
* Bind the tenant to a new periodic tenancy
167
What can a landlord do if a tenant fails to pay rent but remains on the property?
| Discuss both the common law and modern trend
At common law, the landlord can only sue for money damages.
The modern trend allows the landlord to seek money damages and also evict the tenant and terminate the lease.
168
What can a landlord do if a tenant pays rent late?
A landlord is entitled to damages if a tenant pays rent late. If on-time rent is a material breach according to the contract, a landlord may even sue to remove the tenant.
169
What can a landlord do if a tenant breaches a non-rent related covenant in a lease?
This depends on the terms of the lease. They may be able to evict if the breach is material or get damages.
170
A landlord knows that tenant has breached a non-rent covenant in the lease, but does nothing about it and accepts rent as normal. Can they later sue to evict the tenant?
No, if the landlord knows about a breach and accepts rent anyways, she has waived the breach and cannot terminate.
171
What can a landlord do if a tenant unjustifiably abandons a lease?
If a tenant unjustifiably abandons a lease, the landlord may:
1. Terminate the lease and 'accept their surrender'
2. Do nothing
3. Re-let the property and mitigate their losses
172
A tenant unjustifiably abandons their lease. What is their liability?
Depends on what the landlord decides to do. If the landlord accepts their surrender, they are released from future rent liability.
If the landlord re-lets the property, the tenant is liable for any shortfall.
173
Can one party unilaterally convey or encumber property in a tenancy by the entirety?
No - because of the unity of person, neither party can alienate or encumber property without consent.
174
What does a conveyance do to a joint tenancy?
A conveyance severs a joint tenancy and turns it into a tenancy in common.
175
What does a mortgage do to a joint tenancy?
The impact of a mortgage on a joint tenancy depends on the state.
In **lien theory** states, a mortgage is just a lien so the joint tenancy is not affected.
In **title theory** states, a mortgage is a transfer of title so the joint tenancy is severed.
176
What does a lease do to a joint tenancy?
There is a split of opinion here.
In some jurisdictions, a lease by one joint tenant severs the joint tenancy by destroying unity of interest.
In others, the lease temporarily suspends the joint tenancy, which resumes upon the expiry of the lease.
177
One joint tenant intentionally kills another. What happens? Explain the two approaches.
**Constructive Trust Approach:** the killer joint tenant holds the shared property in constructive trust for the victim's estate so the killer does not profit off their crime
**Statutory Approach:** the killing severs the joint tenancy and converts it into a tenancy in common
178
What is a joint tenancy?
A joint tenancy is when two or more people own property together with the right of survivorship.
179
What is a tenancy by the entirety?
A tenancy by the entirety is a joint tenancy between married people.
180
The right of survivorship applies to which concurrent estates?
Joint tenancy and tenancy by the entirety
181
What is the default presumption when property is owned by two or more people?
The default presumption for cotenants is that they hold property as tenants in common.
182
What is a tenancy in common?
When two or more cotenants have equal rights to possess property.
The tenancy is common does not have the right of survivorship.
183
What additional unity is needed for a tenancy by the entirety?
Unity of person (i.e. marriage)
184
What happens if one of the four unities is no longer present (either at the beginning or at any other point)?
The joint tenancy is severed and the cotenants hold as tenants in common.
185
Define all four unities needed for joint possession.
Possession: equal right to posses the whole
Interest: equal shares in the same property
Time: recevied their interests at the same time
Title: received their interests in the same legal instrument of title
186
What mnemonic is used for remembering the four unities?
PITT
Possession
Interest
Time
Title
187
What langauge creates a fee simpel determinable?
To create a fee simple determinable, we need durational langauge such as:
* During
* So long as
* While
* Until
188
What language creates a fee simple subject to condition subsequent?
To create a fee simple subject to condition subsequent, we need conditional langague such as:
* But if
* On condition that
* Provided that
189
Which of the four unities is needed for a tenancy in common?
The only unity needed for a tenancy in common is the unity of possession.
190
What are the three concurrent estates?
Joint tenancy
Tenancy in common
Tenancy by the entirety
191
What four-step approach should you use to answer a RAP question?
1. Does RAP apply to the stated interest?
2. What is the measuring and validating life?
3. What is the condition to be satisfied for vesting?
4. Will this conditions vest (or fail) within 21 years of a life in being?
192
A mortgage obligation can be discharged through...?
| 3 ways
(1) Full payment of debt
(2) Acceptance of a deed in lieu of foreclosure
(3) Application of the doctrine of merger to eliminate the mortgage
193
The rights of a senior mortgage interest is generally ______ while the rights of junion interests are generally ________.
unaffected
destroyed
194
The purchaser of property at a foreclosure sale takes the property _______ and ____________.
Free and clear of any junior mortgage and subject to any senior mortgage.
May also be subject to mortgagor's statutory right of redemption if available.
195
What are some exceptions to the first in time rule with mortgages?
| 3 important exceptions
**1. Purchase Money Mortgage:** takes priority above all
**2. Recording Act Exception:** a properly recorded subsequent mortgage may have priority over an unrecorded earlier one
**3. Future Advance Mortgage**: priority depends on whether the advance is obligatory (retains priority) or options (may lose priority with notice)
196
What is the general rule for determine which mortgage interests survive a valid foreclosure?
A valid foreclosure terminates junior interests, but does not affect senior interests.
197
What is the general rule for which mortgage interests have priority?
The general rule for determining priority of mortgage interests is 'first in time, first in right'
198
How is a tenancy by the entirely severed?
Divorce
199
What standard do cotenants owe each other? Are fidicuiary duties owed?
Cotenants owe each other a duty of fair delaing. They do not owe each other fiduciary duties unless they jointly purchased property in reliance of each other.
200
What is the FHA and what does it protect?
Fair Housing Act
Protects against discrimination in the sale, rental, and financing of homes. Also applies to advertising and zoning.
201
What's the rule for cotenants and granting easements?
A cotenant may unilaterally grant an easement but it is only enforceable against the cotenant who created it.
Cotenants may also create an easement together.
202
Who can unilaterally seek a partition?
Tenants in common and joint tenants
But NOT tenants by the entirety
203
What are the two kinds of partition? Which is preferred?
1. Partition by sale
2. Partition in kind
Partitial in kind (physical division) is preferred.
204
Can cotenants seek contribution for improvements?
No, cotenants may not seek contributions for improvements.
However, they may be able to recouop indirectly and be entitled to the additional value they contributed if the property is sold/partitioned.
205
What happens if a cotenant pays more than their share of necessary property-related expenses (e.g. taxes)?
The cotenant who pays more than her share can compel her other cotenants to contribute based on ownership share
206
Can cotenants compel others to contribute to repairs?
No, cotenants cannot compel others to contribute to repairs. But they may recover indirectly during accounting or partition.
207
Must cotenants share income collected from third party renters?
Yes, cotenants must share income received from third party renters. If they do not, they may be subject to an action for an accounting of that income.
208
What is the rule for cotenants sharing *individual* profits received from their use of property?
A cotenant is not required to share their individual profits earned from their use of the property.
209
Can a cotenant in exclusive possession (no ouster) be an adverse possessor against her other cotenants?
No, a cotenant in exclusive possession who has not ousted the other(s) will not be an adverse possessor - no hostility!
210
One cotenant has ousted the other. If that cotenant is in exclusive possession for the statutory period, will they be able to claim the property through adverse possession?
Potentially. Ouster is the act of wrongfully excluding someone from a property, and it can be used to gain adverse possession of that property.
211
What is ouster, and what may an ousted cotenant do?
Ouster is where one cotenant refuses to allow access to the property to another. The cotenant in possession must refuse a demand of entry.
The ousted party may seeek an injunction to regain access or recover damages.
212
Do cotenants have to pay each other rent if one is not in possession of the property?
No, cotenants are not required to pay rent to other cotenants for the value of their use. All have a right to possess the whole.
213
What happens if there is still a deficiency after a foreclosure on mortgaged property?
If there is still a deficiency, the mortgagor remains liable for the deficiency. The court can order a deficiency judgment for the balance.
214
What is the equity of redemption? When must it be exercised?
Common law righ theld by a mortgagor which allows them to reclaim title and prevent foreclosure upon full repayment of the debt.
The equity of redemption must be exercised before foreclosure sale.
215
What are the two primary methods of foreclosure?
(1) Judicial sale under court supervivison
(2) Power of sale (power of sale) held by lender
216
What is a deed in lieu of foreclosure?
Mortgagor can convey the property to the lender directly in exchange for a release of outstanding debt obligations.
217
What does it mean to 'clog' the equity of redemption?
To clog the equity of redemption means to make it harder for a borrower to exercise her right to redeem.
218
What is intermediate title theory?
Intermediate title theory is a modified title theory approach. The mortgagor retains title until default, at which point the lender can take possession.
219
What happens if there is a transfer of a mortgage without a note? What if the note is transferred without the mortgage?
Mortgage Without Note: some states treat the transfer as void, while others treat the transfer as automatic unless agreed otherwise.
Note Without Mortgage: the mortgage follows the note
220
If a deed is silent or ambiguous, the transferee is considered to have ___________ the mortgage.
taken subject to
221
What does it mean for a subsequent transferee to take 'subject to' a mortgage?
If the transferee takes subject to the mortgage, then they are **not** personally liable upon default.
222
What does it mean for a subsequent transferee to assume a mortgage?
If a transferee assumes the mortgage, they share personal liability with the mortgagor.
223
What is a due on sale clause?
A due on sale clause allows a lender to demand immediate payment of the full amount due if property is transfered wtihout permission.
224
What is a due on emcumbrance clause?
A due on encumbrance clause is triggered by additional encumbrances (i.e. a second mortgage). If the mortgagor takes on additional encumbrances, the lender can accelerate payment owed.
225
If a transferee assumes a mortgage then the borrower is ______.
The borrower is secondarily liable.
If the borrower makes payments she can seek reimbursement from the transferee.
226
Can a mortgagor transfer the mortgaged property? What becomes of their liability to pay lender?
Yes, mortgaged property can be transfered by sale, will, deed, or intestate succession.
The mortgagor remains personally liable unless (i) the lender agrees to release them, or (ii) the lender modifies the transferee's obligations.
227
What are the two primary types of mortgages?
**Purchase Money Mortgage:** a loan taken out for someone to purchase property
**Future Advance Mortgage:** a line of credit for home equity, construction, and commerical loans
228
What is a conditional sale and repurchase?
A conditional sale and repurchase is where property is sold by the borrower to the lender and then leased back to the borrower in exchange for a loan.
The grantor may attack this transaction later as a disguised mortgage.
229
What is an absolute deed?
A landowner need to raise money may 'sell' property to a person who will pay cash and may give the 'buyer' an absolute deed rather than a mortgage. An absolute deed transfers unrestricted title free of encumbrances.
230
What is a disguised mortgage?
Usually comes up in the context of absolute deeds and conditional sale/repurchase.
If the court concludes, by clear and convincing evidence, that the deed was really given for security purposes, the court will treat it as an equitable (or disguised) mortgage.
231
What is an installment land contract? What happens if the buyer breaches?
A contract where the seller retains title until the buyer makes the final paument under an installment plan.
The traditional approach is that the seller gets to keep possession of the property (and keep all payments) if buyer fails to make even one payment.
This is harsh! Many states assist a buyer in default.
232
What are some of the ways states assist a buyer in default under an installment land contract?
1. Treat the contract as a mortgage and require the seller to foreclose on the property
2. Offer buyer the equitable right of redemption
3. Allow the seller to keep property but order restitution to buyer
233
What is a deed of trust? What happens if the buyer defaults?
A deed of trust is where the landowner delivers title to a third party trustee as security under the condition that the trustee re-conveys the property back to borrower upon repayment of loan.
If borrower defaults, the lender can instruct the trustee to sell the property.
234
Can a lender as part of a deed of trust transaction purchase property being sold by their trustee?
Yes! The lender is allowed to purchase the property.
235
# True or False
A mortgage does not need to satisfy the Statute of Frauds
False! As a conveyance of an interest in land, a mortgage must satisfy SOF.
236
What are the 4 mortgage alternatives?
1. Absolute deed
2. Installment land contract
3. Conditional sale and repurchase
4. Deed of trust
237
What are the 6 implied covenants in a general warranty deed?
PRESENT
1. Seisin
2. Right to convey
3. Against Encumbrances
FUTURE
1. Quiet Enjoyoment
2. Warranty
3. Further Assurances
238
What are the three present implied covenants in the general warranty deed? What does each do?
PRESENT
**Seisin**: grantor owns the land described in the deed
**Right to Convey:** grantor has the right to convey the property
**Against Encumbrances:** no undisclosed encumbrances on the property that may limit its value
239
What are the three future implied covenants in the general warranty deed? Describe each.
Quiet Enjoyment: grantee's possession will not be disturbed by a third party
Warranty: grantor will defend grantee against future title claims
Further Assurance: fix future title problems
240
What is a special deed warranty?
A special deed warranty is where the grantor warrants against defects caused by them personally.
Includes the six implied covenants, but they apply only for grantor acts.
241
What is a common remedy for a breach of a deed warranty?
Damages
242
What is a quitclaim deed?
A quitclaim deed is where the grantor makes no warranties as to the health of the title being conveyed
243
If a grantor keeps a deed, is parol evidence admissible to establish whether the grantor had the intent to transfer?
Yes
244
What does it mean for a devise of property to 'lapse'?
A devise of property may lapse (or fail) if the named beneficiary in the will dies before the testator and no alternative is named.
245
What is ademption?
Ademption is when a devise of property fails because the testator no longer owns the property upon their death.
246
What is escheat?
If a decedent dies without a will and without any heirs, their property goes to the state.
247
What is an anti-lapse statute?
An anti-lapse statute prevents a gift in a will from failing if the named beneficiary dies before the testator. It allows the gift to go to certain close relatives instead of their estate.
248
When are restraints on alientation allowed and how does the court decide?
Courts generally disfavor restraints on alientation. They allow them when they are deemed reasonble. The court balances the utility of the restraint against the harm caused by enforcing it.
249
What is the tenant's duty to repair?
In a residential lease, the landlord usually is responsible for repairs. The tenant generally has no duty to make substantial repairs.
In a commerical lease, the tenant may be required to repair and maintain.
250
Does a tenant have a duty to make substantialiasing repairs? Ordinary repairs? No responsibility at all to repair?
Tenant must make ordinary repairs to keep property in its pre-rental condition. This is supporte by the doctrine against permissive waste.
251
What are the three major exceptions to a tenatn's duty to pay rent?
1. Material breach of a covenant by the landlord
2. Eviction of tenant (either complete or partial)
3. Destruction of property
252
What are the two basic duties of all tenants?
1. Pay rent
2. Avoid waste
253
What type of tenancy is created if a landlord elects to re-rent to a holdover tenant?
A periodic tenancy
254
What is a tenant liable for / obligated to pay during a tenancy at sufferane?
A tenant at sufference is obligated to pay reasonable value of occupancy at the rate set under their previous rental agreement.
Also liable for any foreseeable damages caused by their holdover.
255
How is a tenancy at sufference created? Terminated?
A tenancy at sufferance is created when a tenant refuses to leave after the expiry of their lease.
It will be terminated when the holdover tenant vacates, the landlord evicts, and/or the tenant agrees to re-rent the property.
256
Who has the right to terminate a tenancy at will?
Both parties have the right.
If an agreement gives only the landlord the right to terminate, the tenant is impliedly given the right to terminate too. A landlord cannot have the sole ability to terminate.
257
Is notice required to end a tenancy at will?
At common law, no notice was required - could be terminated at will. But today, most states require notice to teriminate.
258
What is a tenancy at will? How is it terminated?
A tenancy with no specific term or period, which continues as long as the landlord and tenant desire.
Can be terminated by either party or through operation of law (e.g. death or sale)
259
For a periodic tenancy, is an oral notice to vacate allowed?
No, most states require written notice.
Although some states do allow oral notice for residential (but not commerical) leases.
260
Is notice required to terminate a periodic tenancy? If yes, how much notice do you need to give?
Notice is required, and it must be given before the start of the last period.
If yearly, 6 months notice (some states allow one month)
261
Does the Statute of Frauds apply to a periodic tenancy?
Yes, but only if the inital term is greater than one year
262
How is a periodic tenancy created?
| There are three ways
1. Express agreement
2. Implication
3. Operation of law (i.e. holdover tenant)
263
A lease specifies the total amount of rent for a defined period but allows payments in installments. What kind of tenancy is this?
A periodic tenancy
E.g. Alta 801 has annual rent of 120,000 payable in monthly installments of 10,000.
264
How is term in a periodic tenancy determined?
The term in a periodic tenancy may be explictly stated or implied by action (e.g. monthly payments of rent implies a monthly tenancy)
265
Does a tenant in a tenancy for years have a right to renew?
No, a tenant in a tenancy for years has no right to renew. Any right to do so must be explict in the agreement - otherwise, the tenancy terminates automatically at the end of the fixed period.
266
How is a tenancy for years terminated? Is noticed required?
A tenancy for years terminates automatically at the end of the fixed term.
No notice is required.
267
Can a tenancy for years be terminated early?
Yes, a tenancy for years may be terminated early by surrender or through a material breach of a covenant by the landlord.
268
Does the Statute of Frauds apply to a tenancy for years?
Yes, the Statute of Frauds applies to a tenancy of years if the tenancy is longer than one year.
269
What must a lease include in a tenancy for years?
The lease agreement in a tenancy for years must:
- Identify the parties
- Identify the premises
- Specify the duration of the lease
- State the rent payable
- Be signed by the party to be charged
270
What are the four types of tenancies?
1. Tenancy for Years
2. Periodic Tenancy
3. Tenancy at Will
4. Tenancy at Sufferance
271
When might we ignore the law of the situs general rule?
| four situations
There are four situations where we might ignore the law of the situs.
1. When another jurisdiction is indicated by the parties
2. Marriage: the domicile of the parties may control
3. Mortgage: where money must be paid in another state
4. Fraud cases: the state where the fraud occurred may override law of situs
272
What is the major rule/test for conflict of law cases in real property?
The **law of the situs** - controlling law is based on where the property is located
273
# True or False
Statistical evidence of the impact of discrimination is sufficient for the Fair Housing Act.
False.
The plaintiff must show that the defendant's policy caused the discriminatory result. General statistical evidence is insufficient.
274
What is a major challenge in most FHA claims (i.e. what is a reason most fail)?
A reason most FHA claiims fail is because of the disability in establishing causation.
The plaintiff must show that the prohibited behavior was linked to the protected basis.
275
To establish a claim under the FHA, a plaintiff must show proof of...
Discrimination
276
Can cotenants agree not to partition their property?
Yes, agreements not to partition are enforceable if: (i) they are clear, and (ii) the time limitation is reasonable.
277
What are the exemptions to the FHA?
There are three major exemptions to the FHA.
1. Owner-occupied homes with four or fewer units
2. Single family homes without a broker
3. Religious organizations and private clubs
278
What are the protected classes under the FHA?
Race, religion, color, national origin, disability, family status (including having children under 18 and being pregnant), sex (including sexual orientation and gender identity).
279
For racial discrimination under the FHA, a plaintiff must show...
Plaintiffs claiming racial discrimination under the FHA must show a **disparate racial impact**
There is no need to show racial intent or racial purpose.
280
If a restraint on alientation is valid then...
If a restraint on alientation is invalid then...
any attempt to alienate will be null and void
the restraint is rejected and the property can be alienated freely
281
What are the four types of alientation restraints?
1. Disabling restraint
2. Forfeiture restraint
3. Promissory restraint
4. Discriminatory restraint
282
What is a forfeiture restraint on alientation? Are they valid?
A forfeiture restraint causes forfeiture if owner attempts to transfer.
They are valid for future intersts and life estates only.
283
What is a disabling restraint on alientation? Are they valid?
A disabling restraint is a total prohibition on transfering property.
Disabling restraints are alwasy void!
284
What is a promissory restraint on alientation? Are they valid?
A promissory restraint is where the owner promises not to transfer property.
Promissory restraints are valid for life estates.
285
What is a discriminatory restraint? Is it valid?
A discriminatory restraint is a restraint based on race, ethnicity or religion.
Discriminatory restraints are not valid.
286
What is a general warranty deed?
A general warranty deed is where the grantor warrants against all defects, even if they did not cause the defect.
287
What is the shelter rule?
A grantee protected under a recording act can transfer that protection to a subsequent purcahser, even if the subsequent purchaser has notice of a prior claim.
288
What are the three kinds of deeds a seller may give to a buyer?
1. General warranty deed
2. Special warranty deed
3. Quitclaim deed
289
To be protected under any of the three recording statutes, a grantor must...
To be protected under a recording act, the grantor must pay value for the property interest.
290
What is estoppel by deed?
Estoppel by deed arises when a grantor conveys land they do not own. If they later acquire title, they are estopped from trying to repossess on the grounds that they did not have title when they made the first conveyance.
291
What is a wild deed? What's the problem with wild deeds?
A wild deed is a deed that is not properly connected to the chain of title.
The problem with wild deeds is that they provide no constructive notice to subsequent purchasers.
292
What are the three types of recording statutes?
Who wins in each?
1. **Race**: first to record wins
2. **Notice**: a subsequent purchaser wins if she acquires her right without notice of a prior but unrecorded interest
**3. Race-Notice**: a subsequent purchaser must both take without notice and record first to win
293
What are the three types of notice?
Actual
Constructive (Record)
Inquiry
294
What is the common law recording rule for a deed?
First in time, first in right
295
A deed has a forged grantor's signature on it. Is a BFP protected anyways?
No, if the deed has a forged signature on it the deed is void and provides no protection, even to a BFP.
296
What are the two kinds of fraud related to deeds?
What happens to the deed in each situation?
**(1) Fraud in factum:** grantor is unaware that what they are signing is a deed. VOID.
**(2) Fraud in execution**: grantor is misled into signing the deed. VOIDABLE by grantor, but enforceable by a BFP.
297
What is the equal dignities rule?
Agency authorization for real estate contracts must be in writing
298
What are the requirements for a valid deed?
There are four requirements for a valid deed. The deed must:
- Identify the parties by name
- Use words of transfer (i.e. a granting clause)
- Describe the property
- Be signed by the grantor
299
A transfer of ownership of property at death through a will can take effect through ________ or a ____________.
specific devise
a residuary clause
300
When a decedent does not leave a valid will, the property is transfered pursuant to ___________.
Intestate succession
301
If a decedent has no heir, property typically _________ to the state.
escheats
302
