MBE Property Flashcards
1
Q
Defeasible Fees
A
(R) A fee simple estate of potentially infinite duration that can be terminated upon the occurrence of some specified event. Three Types: 1. Fee Simple Determinable (FSD) 2. Fee Simple subject to Condition Subsequent (FSCS) 3. Fee Simple subject to an Executory Interest (FSEI)
2
Q
Defeasible Fees - FSD
A
(R) Property automatically terminates and reverts back to the grantor upon the happening of a given event or condition. Grantor retains a possibility of reverter. Absolute restraints on alienation are void. Hint: Phrases such as 1. “For so long as” 2. “While” 3. “During” 4. “Until” Example: If A stops practicing law property automatically reverts back to grantor
3
Q
Defeasible Fees - FSCS
A
(R) Grantor retains the power to terminate grantee’s estate upon the happening of some given event or condition. The Grantor retains a right of reentry. Absolute restrains on alienation are void. Example: To A, but if he wins the lottery, grantor reserves the right to reenter and retake.
4
Q
Defeasible Fees - FSEI
A
(R) Property automatically transfers to a third party upon the happening of a given event or condition. The third party holds the shifting executory interest. Absolute restraints on alienation are void. Example: “To A, but if A is ever arrested, then to B”
5
Q
Life Estate
A
(R) An interest that lasts only for the life of the interest holder. If the life estate is measured by the life of another person, however, that life estate will be pur autre vie. Duties and rights of life tenants include that a life tenant cannot injure interests of remainder or reversion holder, which can be present through the mechanics of waste.
6
Q
Life Estate - Doctrine of Waste
A
(R) The doctrine of waste holds that a life tenant cannot injure the interests of a remainder or the reversion holder. There are three forms of waste: (1) affirmative, (2) permissive, and (3) ameliorative.
7
Q
Life Estate - Doctrine of Waste (Affirmative)
A
(R)The life tenant cannot consume or exploit natural resources, except: (a) where necessary for repairs or maintenance of land, (b) when grant expressly gives the right to exploit, or (c) if land was used for exploitation prior to the grant - open mines doctrine; if extraction of materials was done on land before life estate began, life tenant may only extract from mines already open.
8
Q
Life Estate - Doctrine of Waste (Permissive)
A
(R) Life tenant has a duty to repair and maintain property up to extent of income and profits derived from land or rental value of land.
Failure to do so constitutes permissive waste.
9
Q
Life Estate - Doctrine of Waste (Ameliorative)
A
(R) Acts that economically benefit land’s value; usually permitted under modern authorities.
10
Q
Future Interest - Grantor
A
(R) A grantor may have a future interest in three ways:
(1) possibility of reverter, which accompanies a FSD,
(2) a right of reentry and power of termination, which accompanies a FSCS, or
(3) a reversion, which defaults future interest for grants of an estate smaller than a fee simple - life estate or leasehold.
11
Q
Future Interest - Grantees/Third Person
A
(R) A grantee or a third person may have a future interest in three ways:
- (1) vested remainder,
- (2) contingent remainder, or
- (3) an executory interest.
There are three types of vested remainders:
- (a) indefeasibly vested remainder,
- (b) vested remainder subject to total divestment, and
- (c) vested remainder subject to open.
12
Q
Remainders
A
(R) A future interest in a third person that arises immediately upon the termination of the preceding estate. There are two types of remainders; vested and contingent.
A vested remainder can take the form of either:
- (1) indefeasibly vested remainder,
- (2) vested remainder subject to total divestment/executory limitation, or
- (3) vested remainder subject to open.
A contingent remainder arises, however, if:
- (a) there is a condition precedent to the future interest becoming possessory,
- (b) the future interest vests in an unascertained taker, or
- (c) both a and b.
13
Q
Remainder - Vested
A
(R) A vested remainder automatically becomes possessory upon the natural expiration of the preceding estate, but is subject to two limitations, in that, it cannot be subjected to any condition precedent or vest in an unknown or unascertained person.
There are three types of vested remainders:
- (1) indefeasibly vested remainder,
- (2) vested remainder subject to total divestment, and
- (3) vested remainder subject to open.
14
Q
Remainder - Vested (indefeasibly vested remainder)
A
(R) An indefeasibly vested remainder becomes possessory immediately upon termination of the prior estate.
15
Q
Remainder - Vested (Subject to total divestment)
A
(R) A vested remainder subject to total divestment is subject to some condition subsequent, such that the remainderman could be divested after taking possession.
Example: “To A for life, remainder to B; but if B weds, to C”
16
Q
Remainder - Vested (subject to open; class gift)
A
(R) A vested remainder subject to open vests in a described class of takers, at least one of whom is capable of taking possession - by virtue of being alive - and not subject to any condition precedent.
A class may be either open or closed.
A class remains open to allow for future class members and closes when additional class members are impossible.
RULE OF CONVENIENCE - Class closes whenever any class member can call for distribution of her share; does not apply if it conflicts with the grantor’s expressed intent.
17
Q
Remainder - Contingent
A
(R) A contingent remainder will be contingent if it is either:
(a) subject to a condition precedent, or
(b) created in favor of an unascertained or unborn person.
18
Q
Remainder - Contingent (condition precedent)
A
(R) A contingent remainder subject to condition precedent exists where the remainder’s taking is subject to a condition precedent, i.e., contingent as to an event. Once the grantee satisfies the contingency, the interest automatically becomes an indefeasibly vested remainder.
Example: “To A for life, then to B and his heirs when B gets married.” If B is unmarried: A - life estate B - Contingent Remainder Grantor - reversion
19
Q
Remainder - Contingent (unascertained persons)
A
(R) A contingent remainder subject to unborn or unascertained persons exists where a remainder is contingent, if created, in favor of unborn or unascertained persons. The remainder is contingent on the grantee becoming born or ascertained.
Example: “To A for life, then to B’s heirs.” If B is alive upon conveyance, remainder is contingent because heirs of B cannot be ascertained until B dies.
20
Q
Rule of Destructibility
A
(R) At COMMON LAW, a contingent remainder is destroyed if it remains contingent - i.e. the condition is not satisfied - when the preceding estate ends.
Under MODERN LAW, however, gives a reversion to grantor or grantor’s heirs until grantee satisfies the condition.
21
Q
Merger (Shelley’s Rule)
A
(R) At COMMON LAW, the remainder merges and A has a fee simple absolute.
Under MODERN LAW, however, A has a life estate and A’s heirs have contingent remainders.
Example: “O grants to ‘A for life, then to A’s heirs’ and A is alive” Note: O - Has a reversion because A could die without heirs.
22
Q
Doctrine of Worthier Title
A
(R) The contingent remainder in O’s heir is void; A instead has a life estate and O has a reversion.
Example: “O conveys ‘to A for life, then to O’s heirs’”
23
Q
Executory Interest
A
(R) An executory interest is a future interest in a third party that takes effect by cutting short some interest - two types: shifting and springing.
Hint: Phrases such as 1. “But if” 2. “Then to” 3. “For so long as” Note: EI holders lack standing to sue for waste **
24
Q
Executory Interest - Shifting
A
(R) A shifting EI always follows a defeasible fee, which serves to cut short someone other than the grantor.
Example: “To A and his heirs, so long as the property is used for storage. But if used for any other purpose, to B and his heirs”
Note: A - FSEI B - Shifting EI
25
Executory Interest - Springing
(R) A springing executory interest cuts short the interest of the grantor or his heir.
Example: "To A, if and when he gets married" Note: A - EI Grantor - FSEI
26
Rule Against Perpetuities (RAP)
(R) No property interest is valid unless it must vest, if at all, no later than 21 years after the death of a life in being at the time the interest was created.
**That is, a future interest is void if there is any possibility, no matter how remote, that it will vest more than 21 years after the death of the measuring life.**
**RAP Applies To:**
* 1. Contingent Remainders
* 2. EI
* 3. Vested remainder subject to open
* 4. Option and rights of first refusal
* 5. Powers of appointment
27
RAP - Special Considerations (Right of first refusal/Class gift)
(R) With respect to rights of first refusal and RAP, a contingent interest in property violates RAP if they could possibly be exercised outside the time period allowed by RAP.
As for class gifts and RAP, for a class gift to satisfy RAP, the class must be closed with all conditions precedent satisfied for every member - the rule of convenience for class gifts may save a class that would otherwise violate RAP.
28
RAP - Special Considerations (Fertile Octogenarian)
(R) The presumption that any woman is capable of giving birth, regardless of her age or condition.
29
RAP - Special Considerations (Charity- to-Charity)
(R) RAP does not apply to conveyances from one charity to another.
30
Tenancy in Common - (Presumption under modern law)
(R) A TIC is an estate with multiple tenants in which each co-tenant owns an individual part and each has a right to possess the whole.
TIC are
* freely transferable,
* co-tenants share the right to possession,
* there is no survivorship rights, and
* a co-tenant may force a partition at any time and take sole ownership of her share in the estate.
31
Joint Tenancy
(R) In order for a JT to be created, four conditions must concurrently exists when the tenants take their interest:
* (1) time - JT's must take their interest at the same time,
* (2) Title - JTs must receive their conveyance through the same instrument,
* (3) Interest - JTs must take equal and identical interests, and
* (4) Possession - JTs must have equal right to possessory rights.
The grantor must expressly intend to create a JT; otherwise, a TIC is presumed.
JT's are transferable, but not devisable or descenbile.
JT, further, provides a right of survivorship.
32
Joint Tenancy - Severance/Transfer
(R) Severance by any JT creates a TIC with respect to the severed interest.
Moreover, a JT interest becomes a TIC upon transfer; this does not destroy the entire JT if two or more JT's remain.
33
Joint Tenancy - Mortgage
(R) The MAJORITY (lien theory), holding that a JT can take a mortgage on her interest without severing JT because no title passes to mortgagee.
The MINORITY (title theory) holds, however, JT is severed if any JT takes a mortgage on her interest because title passes to the mortgagee.
34
Tenancy by the Entirety
(R) While only recognized is certain COMMON LAW jurisdictions, TBE is similar to JT, but it is a marital estate between a husband and wife. A TBE requires the same four unities as a JT. While there is a right to surviviorhship, unlike JT, there is no right of partition.
35
Tenancy by the Entirety - Severance
(R) There are four ways in which a tenancy by the entirety can be severed, which created a TIC: (1) death of one co-tenant, (2) mutual agreement of the parties in writing, (3) issuance of a divorce decree, or (4) execution by a joint creditor, e.g., foreclosure.
36
Co-Tenants Rights and Duties
(R) The following rules generally apply to concurrent estate tenants: 1. Possession - each co-tenant (CT) has rights to possess the whole 2. Rent from a CT in exclusive possession - a CT in exclusive possession is not liable to CT for rent. 3. Rent from third parties - a CT leasing premises out must account to CT for their share of rental income. 4. Adverse Possession - Tenants may not acquire title to the exclusion of CT through adverse possession. 5. Carrying Costs - each tenant is responsible for his fair share of taxes, interests, etc. 6. Repairs - CT may seek contribution for reasonable repairs, but must inform CT before making repairs. 7. Improvements - no right to contribution for improvements; but CT are entitled to credit for an increase in value attributable to the improvement (and also liable for any resulting loss) 8. Waste - a CT can bring an action for waste against another CT during the life of the tenancy. 9. Partition/Forced sale - JT's and TIC may bring an action for partition, or seek a forced sale and apportion the proceeds.
37
Leasehold - Periodic Tenancy
(R) A periodic tenancy is a leasehold that is continuous for successive intervals until either party gives notice of termination.
A periodic tenancy can be created either expressly, impliedly, or by operation of law. An express agreement is conveyed to a tenant for agreed interval.
A creation by implication is a lease that does not specify duration, but provides for rent to be paid at set intervals.
Lastly, by an operation of law, occurs in two situations: (1) invalid lease, or (2) holdover tenant.
* Invalid lease - (R) Occurs if a tenant takes possession despite an invalid lease, that is it violates SOF, a periodic tenancy arises upon the landlord's acceptance of payment.
* Holdover tenant - (R) Occurs if a landlord accepts rent from a holdover tenant, a periodic tenancy arises for the period the payment overs
38
Leasehold - Periodic Tenancy (Termination)
(R) When a tenant gives proper notice, a leasehold may be terminated. Effective notice is given when there is (1) sufficient time - tenant must give notice one full period in advance; year-to-year tenancies require six-month notice, and (2) effective date - must be at the end of the period of the tenancy. \*\*Note: Parties can agree to modify these requirements.
39
Tenancy at Will
(R) A tenancy at will is a tenancy with no fixed duration, terminable by either party at any time without notice. It may be created via an express agreement. Without an express agreement, courts will treat the lease as an implied periodic tenancy.
40
Tenancy at Will - Termination
(R) A tenancy at will may be terminated by will or operation of law. Termination by will occurs when either party can terminate the lease at any time without notice, but a reasonable demand to vacate the premises is usually required. On the other hand, termination by operation of law occurs upon: death of either party, waste by the tenant, assignment by the tenant, transfer of title by the landlord, or lease by the landlord to a third party.
41
Tenancy at Sufferance
(R) A tenancy at sufferance is a default tenancy that arises when a tenant continues to possess property after the lease expires (i.e. a holdover tenant). A tenancy at sufferance is created when the tenant holds possession beyond lease expiration. The expired lease's terms and conditions automatically carry over to the tenancy at sufferance.
42
Tenancy at Sufferance - Landlord Options
(R) Once a lease expires and the tenant is still in possession of the property giving rise to a tenancy at sufferance, a landlord may either: (1) sue to evict, or (2) impose a new periodic tenancy. If the landlord choses option 2, the landlord can demand higher rent for both the holdover period and any new periodic tenancy if he gave notice of the increase before the lease expired or in commercial leases, if the expired lease was for one year or longer, the new periodic tenancy can be year-to-year. EXCEPTION: (R) Imposing a new periodic tenancy must be reasonable. A new periodic tenancy is unreasonable if: (a) the tenant only remains in possession for a few hours, (b) the tenant is not at fault for delay in vacating - i.e. illness, or (c) seasonal leases.
43
Tenant's Duties at COMMON LAW
(R) At COMMON LAW, a tenant has a duty to:
(1) repair,
(2) pay rent,
(3) not use the property for illegal purposes, and
(3) owes a duty to third parties.
44
Tenant's Duties at COMMON LAW - Repairs
(R) A tenant's duty to repair can be largely modified by lease terms: (a) tenant must maintain premises and make ordinary repairs - mitigated by implied warranty of habitability, (b) tenant must not commit waste, and (c) with respect to destruction of premies without fault of landlord or tenant - CL holds the tenant liable for any loss, and ML holds tenant can terminate lease.
45
Tenant's Duties at COMMON LAW - Rent
(R) A tenant has a duty to pay rent, and a tenancy at sufferance arises upon breach.
46
Tenant's Duties at COMMON LAW - Duty to not use property for illegal purposes
(R) If tenant uses premises for an illegal purpose, landlord may terminate lease or obtain damages and injunctive relief. Occasional, minor illegal activities do not constitute a breach.
47
Tenant's Duties at COMMON LAW - Liability to third parties (in tort)
(R) Tenant is liable for injuries sustained by third parties invited by tenant EVEN IF landlord promised to make repairs.
48
Fixtures
(R) Once-moveable chattel that is annexed (attached) to real property, indicating an intent to permanently improve property it becomes a fixture. If a tenant removes fixtures he commits voluntary waste. Fixtures pass with ownership of the land. Tenant installation qualifies as a fixture if there is an express agreement between the landlord and tenant - if no agreement, tenant may remove the chattel that tenant installed as long as removal does not cause substantial harm to the property.
49
Landlord's Remedies for Tenant Breach
(R) If a tenant breaches his leasehold duties, the landlord's options depend on whether tenant retains possession, i.e. remains on premises.
**If the tenant retains possession, the landlord may: file for notice of eviction or continue the lease and sure for rent due.**
On the other hand, **if the tenant abandons the premises, the landlord may:**
* **surrender** - release the tenant from the lease,
* **ignore** (MINORITY RULE) - hold tenant liable for unpaid rent, or
* **re-let** (MAJORITY RULE) - lease premises to new tenants and hold the breaching tenant liable for any losses.
* **Note**: A landlord may not engage in self-help upon the tenant's breach, that is, they cannot forcibly remove the tenant or tenant's belongings, etc.
**Security Deposit**: (R) A landlord must return deposit to tenant once lease terminates, however, a landlord may subtract damages she has suffered.
50
Landlord's Duties and Warranties
(R) Landlord's have the following duties to tenant:
(1) duty to deliver possession,
(2) implied covenant of quiet enjoyment,
(3) implied warranty of habitability, and
(4) tort liability.
51
Landlord's Duties and Warranties - Deliver Possession
(R) Under the MAJORITY RULE, a landlord must deliver actual possession.
Under the MINORITY RULE, however, the landlord must only deliver legal possession, and thereby the tenant is responsible for any holdovers on property.
If the landlord breaches this duty owed to the tenant, the tenant may seek monetary damages.
52
Landlord's Duties and Warranties - Quiet Enjoyment
(R) A tenant has an implied right to quiet use and enjoyment of the premises, without interference from the landlord.
Breach of this covenant may be either actual eviction or constructive eviction
53
Landlord's Duties and Warranties - Quiet Enjoyment (Constructive Eviction)
(R) Landlord's actions or inactions render the property uninhabitable.
The following elements must be present for a constructive eviction to be present:
* (1) **substantial interference** - major and/or chronic problems,
* (2) **notice** - tenant must inform the landlord and give him a reasonable opportunity to repair; landlord must fail to act meaningfully, and
* (3) **vacate** - tenant must vacate within a reasonable period after the landlord fails to repair.
54
Landlord's Duties and Warranties - Quiet Enjoyment (Retaliatory Eviction)
(R) Landlord is prohibited from retaliatory eviction if a tenant lawfully reports housing code violations.
55
Landlord's Duties and Warranties - Implied Warranty of habitability
(R) Under the doctrine of IWH, a residential property must be fit for basic human dwelling. IWH is not applicable to commercial leases, and it cannot be modified by lease terms.
If a landlord breaches his duty of IWH to a tenant, a tenant may:
* (1) move - vacate/terminate the lease,
* (2) repair - make reasonable repairs and deduct the costs from future rent,
* (3) reduce or withhold rent - tenant can reduce rent or stop payment until a court determines the fair rental value given the breach; tenant must place withheld rent in escrow, or
* (4) remain - tenant can remain in possession and seek money damages.
56
Landlord's Tort Liability to Tenants
(R) A landlord may be liable for injuries occurring on leased property. A landlord is liable for injuries involving:
**Common areas** - (R) Landlord must exercise reasonable care in maintaining and repairing common areas
**Latent Defects** - (R) Landlord has a duty to disclose hidden defects he should reasonably know of
**Assumption of repairs** - (R) Landlord is liable for harm caused by negligent repairs he chooses to undertake
**Public Use** - (R) Landlord is liable for known defects if he knows the property is for public use and tenant is unlikely to repair
57
Assignment and Subleases - Assignment
(R) An assignment occurs where the tenant transfers the entire leasehold to the assignee.
An assignee then is in privity of estate with landlord - the two are bound by all covenants that run with the land.
The assignor, however, remains in privity of contract with the landlord.
While the assignee owes rent directly to landlord, the assignor may be held liable for unpaid rent.
58
Assignment and Subleases - Subleases
(R) A sublease occurs where the tenant transfers part of the leasehold to a sublessee.
Unlike assignments, however, A sublessor remains is in privity of estate and contract with the landlord.
The sublessee then pays rent to sublessor as her tenant and is not liable to landlord for rent and is not bound by any covenants unless expressly assumed.
59
Assignment and Subleases - Provisions
(R) Lease provision restricting assignment or sublease are enforceable, but generally construed against landlords. Once a landlord gives a tenant permission to assign or sublet, such provisions are thereafter waived.
60
Easements
(R) An easement is a non-possessory property interest that confers a right to use another's land. The burdened land is called the servient estate, while the benefit land is called the dominate state.
61
Easement - Appurtenant
(R) An easement appurtenant entitles a dominate estate owner to use a servient estate's land, attaches to the dominate estate, and passes automatically (even if not mentioned in a conveyance)
62
Easement - In gross
(R) An easement in gross entitles an individual or entity (not a dominate landowner) to use the servient estate.
63
Easement - Affirmative
(R) An affirmative easement entitles its holder to make affirmative use of the servient estate.
64
Easement - Negative easement
(R) A negative easement entitles its holder to restrict the servient estate from otherwise permissible activities
65
Easement - By prescription
(R) An easement by prescription is a process of acquiring an easement. It requires that acquirer's use of another's land must be: (1) continuous, (2) open and notorious, (3) actual, and (4) hostile. NOTE: There is no requirement for exclusive possession.
66
Easement - By Implication
(R) An easement by implication is an easement legally implied based on prior use by a common grantor on land subsequently divided into multiple plots. An easement by implication requires: (1) easement exist prior to division of a single tract of land, (2) common grantor's use is continuous and apparent, (3) use is reasonably necessary for enjoyment of the dominant tenement, and (4) parties intended the use to continue after division of the land. EXCEPTIONS: (R) An easement may be implied without prior use if: (a) subdivision plat - lots in a subdivision are sold with reference to a map plan, or (b) profit a prendre - holder of a profit a prendre has an implied easement to pass over the land's surface as reasonable necessary to extract materials.
67
Easement - By Necessity
(R) An easement by necessity arises if access to or from a property is impossible without the easement.
An easement by necessity terminates automatically when the necessity ends.
68
Express Easement
(R) An easement may be expressly created by grant or reservation. A grant is an express grant of the easement. A reservation exists where a grantor conveys title to land but reserves the right to continue using the land for a designated purpose. Grantor may only reserve an easement for himself, and is void if reserved for the benefit of another. An express easement must meet the following requirements: (1) in writing, (2) signed by the servient estate holder, and (3) satisfy deed formalities - lawfully executed and delivered.
69
Scope of Easements
(R) An easement's scope is determined by the terms or conditions that created it.
In interpreting an easement's scope, courts will consider the reasonable intent of the original parties.
70
Scope of Easement - Expansion
(R) An easement holder cannot unilaterally expand the scope of their easement.
In the event that an easement holder does unilaterally expand the scope of their easement, one can seek an injunction.
\*\*Notes: Misuse or overuse does not terminate the easement.
71
Scope of Easement - Duty to repair
(R) An easement holder has a duty to make repairs if he is the sole user.
If both the servient landowner and the easement holder use an easement, the repair costs are apportioned.
72
Termination of Easements
An easement may be terminated in the following ways: (1) estoppel, (2) necessity ends, (3) destruction of servient tenement, (4) release, (5) abandonment, (6) merger, (7) prescription, or (8) expiration.
73
Termination of Easement - Estoppel
(R) Where servient owner reasonably relies on an easement holder's conduct or representations indicating an intent to abandon the easement; non- use is sufficient.
74
Termination of Easement - Necessity ends
(R) Easements by necessity expire when the need that created them ends.
75
Termination of Easement - Destruction of servient tenement
(R) Unless destruction results from willful conduct of the servient owner
76
Termination of Easement - Release
(R) Easement holder can terminate the easement by giving a deed of release to the servient tenement owner.
77
Termination of Easement - Abandonment
(R) Easement is terminated if its holder physically demonstrates an intent to permanently abandon it. Mere words or nonuse are insufficient
78
Termination of Easement - Merger
(R) Easement terminates automatically if one person acquires title of both the easement and the servient land. Re-dividing the merged title will not revive easement.
79
Termination of Easement - Expiration
(R) If easement was established for set term, or to expire upon stated conditions, expiration of the term or occurrence of the stated conditions will terminate easement.
80
Negative Easements
(R) Negative easements entitle the holder to prevent the servient landowner from engaging in otherwise permissible actions on his own land. A negative easement may only be created by express grant - writing signed by grantor. Four categories of acts may be prevented: (1) light, (2) air, (3) support, (4) and stream of water from an artificial flow.
81
License
(R) A license is a right to use lincensor's land that is revocable at the licensor's will. A license may be oral or written.
Accordingly, it does not need to meet the requirements of SOF.
A licensor may revoke the privilege at any time, unless estoppel applies.
82
Profit
(R) A nonpossessory property interest entitling its holder to enter a servient estate to remove resources such as minerals, timber, soil, or fish.
All rules governing easements apply to profits.
A profits may be extinguished thorugh misuse or over use of resources on the servient estate.
83
Covenants (seeking money damages)
(R) A covenant is a promise to do or refrain from doing something related to land. Covenants are not property interests.
A covenant concerning real property runs with the land at law and thereby subsequent owners may be burdened by the covenant or may enforce it.
An affirmative covenant is a promise to do something related to land.
A restrictive covenant is a promise to refrains from doing something related to land.
84
Covenant - Termination
(R) Termination of a covenant can occur by: (1) written release, (2) merger of benefited and burdened estates, or (3) condemnation of burdened property.
85
Covenants - Burden runs with the land
(R) A successor in interest to the burdened (servient) estate will be bound by a covenant if the following conditions are satisfied: (1) writing, (2) intent, (3) touches and concerns the land, (4) horizontal and vertical privity, and (5) notice.
86
Covenants - Benefit runs with the land
(R) A successor in interest to the benefiting (dominate) estate may enforce the covenant if the following conditions are met: (1) writing, (2) intent, (3) touches and concerns the land, and (4) vertical privity.
87
Equitable Servitudes - (seeking injunctive relief)
(R) An equitable servitude is a promise to enforce in equity against successors though injunctive relief. An equitable servitude is created where there exists: (1) writing, (2) intent, (3) touches and concerns the land, and (4) notice.
88
Equitable Servitude - Defenses to enforcement
(R) A court will not enforce an equitable servitude if any of the following conditions exits: (1) pervasive changes in the neighborhood, (2) estoppel, (3) acquiescence, (4) unclean hands, and (5) laches.
89
Terms/Definitions for Benefit/Burden anlysis
Writing - (R) Original covenant was in writing Intent - (R) Parties intended to bind successors in interest Touches and Concerns the land - (R) Covenant must affect parties' legal relations as landowners. Homeowners association fees satisfy this requirement. Horizontal privity - (R) Relationship between the covenanting parties Vertical privity -
90
Reciprocal Negative Servitudes
(R) Lot owners in residential subdivisions may enforce restrictions on the use of property against other subdivision lot owners. This may be implied from a common development scheme of a residential subdivision. A reciprocal negative servitude may be implied if, when sales began, the developer had a general scheme for all parcels of the subdivision, including the subject lot. This may be evidenced through: recorded plat, general pattern of restrictions, or oral representations to early buyers. Further, a reciprocal negative servitude can be implied by notice. Where the owner of the subject lot had notice of the covenants in the deeds of other subdivision lots - actual, inquiry, or constructive.
91
Adverse possession
(R) A trespasser may acquire title to another's property without compensation by possessing the property for a specified period, in a manner conflicting with the true owner's rights.
AP requires:
* **(1) Actual possession,** (R) Must possess a reasonable portion of the property to the exclusion of the owner and the public
* **(2) open and notorious,** (R) trespasser's possession must be conspicuous, such that the true owner would know of the trespass if he inspected his property regularly.
* **(3) hostile**, (R) Possession must be without owner's permission
* **(4) continuous.**
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Miscellaneous Adverse Possession Rules - Statute of Limitations
Disabilities - (R) SOL does not begin to run if the true owner was under some disability when the adverse possession began. Future Interests - (R) SOL does not run against the future interest holders until the interest becomes possessory.
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Miscellaneous Adverse Possession Rules - Restrictive covenants
(R) Will not run with the land if the adverse possessor's use of land violated the covenant; but covenant will run if the adverse possessor's use complied with the covenant.
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Miscellaneous Adverse Possession Rules - Color of Title
(R) A claim of title to property not actually owned. Adversely possessing part of the property under color of title is sufficient to acquire title to the entire property.
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Miscellaneous Adverse Possession Rules - Govt. Land
(R) Cannot be acquired through adverse possession
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Miscellaneous Adverse Possession Rules - Leasing
(R) Adverse possessor can lease a portion of the land to a third party and still possess the property.
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Miscellaneous Adverse Possession Rules - Non-marketable title
(R) Title taken by adverse possession is not marketable, unless there has been an action to quiet title.
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Adverse Possession - Tacking
(R) Adverse possessors can tack together successive periods of adverse possession to satisfy the statutory period, even if successive possession was by different adverse possessors. There cannot be any gaps between periods of adverse possession. Tacking requires privity between successive adverse holders, that is, if my be via a subsequent possessor takes by descent, devise, or by deed purporting to convey title.
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Adverse Possession - Concurrent owners
(R) Co-tenants may not adversely possess each others' interests unless ouster has occurred for a statutory period that begins once exclusion begins.
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Land Sale Contracts and Conveyances
(R) Land sale contracts are subject to the SOF and therefore must be: (1) in writing, (2) signed by the party against whom enforcement is sought, and (3) articulate essential terms. There is a major exceptions, however, where partial performance exists. A land sale contract is outside the SOF if the buyer takes possession and either: (a) pays all or part of the purchase price, or (b) makes substantial improvements. Process: 1. Contract 2. Escrow period 3. Closing 4. Conveyances
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Equitable conversion and risk of loss in land sale contracts
Equitable Conversion - (R) During escrow, the buyer owns the real property, but the seller owns personal property, therefore the seller holds legal title in the trust for buyer. Death of a party - (R) If the buyer or seller dies before closing, right to the contract pass according to interests held: seller's interest passes as personal property (sue for proceeds), and the buyer's interest pass as real property (sue for specific performance). Risk of Loss - (R) If property is destroyed before closing through no fault of the parties, buyer bears the risk of loss. However, parties can contract differently. Further, the seller must credit any insurance proceeds from loss against the purchase price.
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Implied promises in land sale contracts
(R) Every land sale contract contains two implied promises:
(1) promises to provide marketable title, and
(2) promises to disclose and make no material false statements.
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Implied promises in land sale contracts - Marketable title
(R) Marketable title in implied in every land sale contracts and provides that the title is free from risk of litigation.
That is, the title is free from being acquired by adverse possession, encumbrances, and zoning ordinance violations.
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Implied promises in land sale contracts - Promise to disclose and make no material false statements
(R) The seller must not materially misrepresent facts or make false statements concerning the property.
The seller must disclose latent material defects.
The seller cannot limit liability through disclaimers.
With respect to NEW property, the seller/builder is subject to an implied warranty of fitness/quality in construction.
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Implied promises in land sale contracts - Breach
(R) A buyer must notify seller before closing and give reasonable time for seller to cure defects.
If the seller files to cure, the buyer can rescind, file for damages, demand specific performance, or file suit to quiet title.
If the buyer fails to notify the seller, however, before closing, contract merges with the deed and seller is not liable.
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Deeds
(R) A deed passes legal title from seller to buyer. In order for a deed to be effective, it must meet the following requirements:
* (1) lawfully executed - signed by grantor and reasonably identify parties and land, and
* (2) delivered. With respect to deliver, physical transfer is not required, but rather present intent controls.
Title passes upon effective delivery.
Acceptance is presumed upon valid delivery.
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Deed - Types
(R) There are three types of deeds: (1) general warranty, (2) special warranty, and (3) quitclaim.
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Deed - General warranty
(R) General warranty deeds include six covenants for title:
(1) present covenants - only breached at time of delivery, and
* Present covenants include seisin, right to convey, and against encumbrances
* Seisin - (R) Grantor covenants that he is the rightful owner and that deed covers described land.
* Right to convey - (R) Grantor covenants that he has the right to convey Against encumbrances -
(2) future covenants - only breached after delivery.
* Future covenants include quiet enjoyment, warranty, and further assurances.
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Bona fide purchaser for value (BFP)
(R) A BFP purchases property for value without notice of a prior conveyance. Purchasers include mortgagees for value, but does not include donees, heirs, or devisees, whom are not protected unless the shelter rule applies. Notice may be either actual, inquiry, or record.
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Recording Statutes - Notice
(R) A subsequent BFP always prevails over a prior grantee who fails to record
Sample Language: "No conveyance or mortgage of an interest in land shall be valid against any subsequent purchaser for value without notice thereof unless it is recorded"
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Recording Statutes - Race-Notice
(R) First subsequent BFP to record prevails.
Sample Language: "No conveyance or mortgage of an interest in land shall be valid against any subsequent purchaser for value without notice thereof whose conveyance is first recorded"
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Recording Statutes - Race
(R) First grantee to record prevails, regardless of whether the buyer is a BFP.
Sample Language: "No conveyance or mortgage of an interest in land shall be valid against a subsequent purchaser whose conveyance is first recorded"
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Chain of Title Problems - Shelter Rule
(R) One who takes from a BFP will prevail against any interest the transferor- BFP would have prevailed against, even if the transferee had actual notice of a prior conveyance.
The shelter rules seeks to protect donees, heirs, or devisees of BFP's who cannot qualify as BFP's and would not otherwise receive protection under notice or race-notice statutes.
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Chain of Title Problems - Wild Deeds
(R) A recorded deed unconnected to the chain of title, e.g. due to a clerk's filing error. Record notice cannot be derived from a wild deed.
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Chain of Title Problems - Estoppel by Deed
(R) One who conveys land in which she has no interest is estopped from denying the validity of the conveyance is she subsequently acquires the same interest. Estoppel by deed seeks to prevent one from fraudulently conveying land and later validly acquiring it.
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Real Estate Agents and Brokers
(R) Most real property sales are negotiated by real estate brokers.
**Seller's Agent** - (R) Broker who obtains listing from seller has a fiduciary duty to seller and earns commission from sale of property once the sale closes.
**Buyer's Agent** - (R) Primary relationship is with buyer. Typically, the buyer's agent is compensated by receiving a portion of the listing broker's commission. The buyer's agent owes a fiduciary duty to seller because buyer's agent is technically a subagent of the seller's agent.
**Duty to disclose** - (R) Agents have a duty to disclose material information about which they have actual knowledge
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Mortgage
(R) A mortgage is a security interest in land that serves as collateral for the repayment of a loan. A mortgage must be in writing to satisfy the SOF.
There are two theories governing the parties' rights.
* Under the MAJORITY RULE (lien theory), the mortgagor has title and the right to possession absent foreclosure.
* Under the MINORITY RULE (title theory), the mortgagee has title to the property during loan term.
Equitable Mortgage - (R) Debtor gives creditor a deed to his land as collateral for the debt (instead of executing a mortgage) Acceleration Clauses - (R) Terms in loan agreements that require mortgagor to pay off full loan immediately if certain conditions are met.
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Transferability of Mortgage Interests & Holder in Due Course Status
(R) A mortgagee can transfer his interest by:
* (1) endorsing the mortgage note and delivering it to transferee, or
* (2) executing a separate assignment of the mortgage interest.
(R) A holder in due course takes a mortgage note free of any personal defenses the mortgagor could have raised against the original mortgagee, but still remains subject to real defenses. Requirements for holder in due course status are as follows:
* (1) negotiable title - note must be negotiable, made payable to the named mortgagee,
* (2) endorsed and signed - note must be endorsed or signed by the named mortgagee,
* (3) delivered - note must be delivered to the transferee, and (4) good faith and value paid - transferee must take the note in good faith and pay value.
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Foreclosure & Mortgagee rights to property
**Foreclosure** - (R) Upon default, mortgagee can satisfy debt through foreclosure by judicial action. Property is sold to satisfy the debt in whole or in part. Deficiency judgment exists if the debt exceeds sale proceeds, mortgagee can file suit against mortgagor for debt balance if proceeds exceed the debt balance, junior liens are paid in order of priority.
**Redemption in equity** - (R) At any time prior to the foreclosure sale, mortgagor can redeem the property by paying the amount due. Some jurisdictions allow mortgagor, for a certain period, to buy back the property after foreclosure sale.
**Mortgagee possession** - (R) Mortgagee's right to possession prior to foreclosure depends on the jurisdiction: Lien theory no right to possess prior to foreclosure
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Foreclosure & Multiple Creditors/Interests - Senior/Junior
(R) The priority of creditors depends of who records their interest first because recorded interests take priority in the order recorded. Interests can be classified as either senior or junior.
Senior interests are unaffected by junior interest foreclosures, and therefore the buyer of foreclosed property takes it subject to senior interests.
On the other hand, become terminated by foreclosure of a superior claim. Accordingly, foreclosure terminates all junior interests, and therefore junior interest holders cannot look to the land to satisfy debts.
However, junior interests are necessary parties and must be included in a senior foreclosure action.
\*\*NOTE: Creditors can agree to subordinate priority to a junior creditor.
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Foreclosure & Multiple Creditors/Interests - Purchase Money Mortgages (PMM)
(R) PMM's are superior to all interests.
A PMM is a mortgage given in exchange for funds used to buy the property; property is given either to the seller as part of the purchase price or to a third-party lender (if both, seller's PMM is senior to the third- party lender).
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Lateral Support
(R) Ownership of land includes the right to have land supported in its natural state by adjoining land; landowners can be liable for excavations that cause damage to adjacent land.
Under this doctrine, a plaintiff may bring claims under two theories:
(1) negligence - excavating owner is only liable if he acted negligently, or
(2) strict liability - plaintiff must show his land would have collapsed, even in its natural state, due to D's excavations.
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Subjacent Support
(R) Underground (subjacent) structures must support surface structures existing when the subjacent estate was created.
Subjacent owners are strictly liable for failure to support pre- existing surface structures.
Negligence standard applies for subjacent structures erected prior to surface structures.
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Water Rights in Watercourses
(R) Land bordering watercourses is governed by either the riparian doctrine or the prior appropriation doctrine.
Under the **riparian doctrine**, water belongs to those who own land bordering the watercourse. There are two theories:
* (1) *reasonable use theory* - MAJORITY
* Under the majority view, riparian owners share rights to reasonable use and are liable to other owners fi their use unreasonably interferes with other owners' use.
* (2) *natural flow theory* - MINORITY
* Under the minority view, riparian owners may be enjoined for any use resulting in a substantial or material reduction in others' water quantity or quality.
**Prior appropriation doctrine** - (R) Water rights are acquired by actual use. Priority of beneficial use determines rights to water.
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Water Rights in Groundwater & Surface Water
**Groundwater** - (R) Water beneath the surface not confined to a known channel. Surface owner is entitled to make reasonable use of groundwater, but mot not be wasteful (MAJORITY )
**Surface water** - (R) Water from rain, springs, or other runoff that has not yet reached a natural watercourse, landowners can generally use surface water as they please, but may be liable for interrupting its flow. Liability depends on which theory applies:
* (1) natural flow theory - owners cannot unreasonably alter natural drainage,
* (2) common enemy theory - owners can do anything to change drainage or combat flow unless it causes unnecessary damage to others' land, or
* (3) reasonable use theory - utility of use is balanced against the gravity of harm from that use.
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Variances
(R) Landowners can get govt. permission to be exempt or vary from literal restrictions of a zoning ordinance. To qualify for a variance, a landowner must show:
(1) undue hardship, and
(2) variance will not negatively impact surrounding property values.
127
Nonconforming Use
(R) A once lawful existing use for property, now deemed nonconforming under new zoning laws prohibits the government from eliminating a use all at once unless just compensation is paid.
128
Special Use Permits
(R) Certain property uses require a special use permit even where zoning generally allows the type of use.
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Exactions
(R) Conditions for govt. approval of anew development. Condition is usually a payment or gift of property to govt. to offset the development's demands on public services.
Exactions are unconstitutional unless they satisfy the following:
* (1) **nexus** - there must be a rational relationship between the exaction sought by the govt. and the burden on public facilities, and
* (2) **proportionality** - the exaction must reasonably relate, in nature and scope, to the impact of the development.
