Missed questions 3

Question 1

For a judicially supervised foreclosure sale, the foreclosing mortgagee must give notice to

Answer 1

the holders of any junior interests in the property to eliminate those interests. Any others who have an interest in the property or are liable on the debt may be joined as proper but unnecessary parties.

Question 2

nonrecourse loan

Answer 2

Since the bank gave the investor a nonrecourse loan, the investor (mortgagor) does not have personal liability for the loan and is not liable for any deficiency. However, the bank can still enforce its mortgage through foreclosure (as seen here).

Question 3

However, certain transfers of residential real property are not subject to a due-on-sale clause—including

Answer 3

including a transfer to the mortgagor’s living trust (as seen here), transfer to a spouse, or transfer (to an ex-spouse) as a part of a divorce.

Question 4

An easement holder may increase the manner, frequency, or intensity of an easement’s use so long as

Answer 4

that increase does not unreasonably damage or interfere with the use or enjoyment of the servient estate.

Question 5

express easement and consideration

Answer 5

An express easement need not be supported by consideration. And once created, an easement cannot be unilaterally revoked by the owner of the servient estate.

Question 6

A lease covenant can be enforced by an assignee-landlord if

Answer 6

if the covenant runs with the land—i.e., the original parties intended to bind their successors, the covenant touches and concerns the land, and there is privity of estate.

Question 7

A joint tenant may grant a mortgage on his/her joint-tenancy interest…

Answer 7

without the other joint tenant’s consent. In a lien-theory jurisdiction (majority rule), the mortgage does not sever the joint tenancy—but it does in a title-theory jurisdiction.

Question 8

charitable trust

Answer 8

A charitable trust is one with a stated charitable purpose made to benefit the community at large or a particular segment of the community. As a result, the trust beneficiaries must be reasonably numerous and unidentifiable.

Question 9

grantor-grantee indexing system

Answer 9

Most jurisdictions, including the jurisdiction here, use the grantor-grantee indexing system for real property records. Recorded documents are located using two indexes:

A purchaser first searches the seller’s name in the grantee index to see if and when the seller acquired the property.

The purchaser then searches the seller’s name in the grantor index to see if and when the seller conveyed the property to anyone else.

A recorded deed that falls outside this chain of title is a “wild deed” that is considered not properly recorded and consequently fails to give constructive notice to subsequent purchasers.

Question 10

A seller of residential property has a duty to disclose any known material defects—i.e., defects that

Answer 10

(1) substantially affect the value of the residence, (2) impact the health or safety of a resident, or (3) affect the desirability of the residence to the buyer—that cannot be reasonably discovered by the buyer.

Question 12

A negotiable promissory note can be transferred by endorsing and delivering the note to another, but a nonnegotiable promissory note requires that

Answer 12

a separate document of assignment be executed to transfer ownership. Once properly assigned, the mortgage automatically transfers with the note.

Question 13

A negotiable promissory note can be assigned by

Answer 13

simply endorsing and delivering the note to the assignee. However, a nonnegotiable promissory note requires a separate assignment document to transfer ownership.

Question 14

doctrine of equitable conversion

Answer 14

Under the doctrine of equitable conversion, a buyer receives equitable title to real property upon entering a land-sale contract. In contrast, the seller retains legal title and acquires the equitable right to receive the purchase price upon closing. As a result, a judgment obtained against the seller after the execution of the land-sale contract is not enforceable against the real property—even if the claim arose before the contract was executed.

Question 15

A deed transfers ownership of real property when it is delivered by the grantor and accepted by the grantee. Delivery is shown by

Answer 15

the grantor’s intent to make a present transfer of the property—which can be implied from the grantor’s words and conduct—and acceptance is presumed when the transfer is beneficial to the grantee.

Here, the farmer died before he was able to physically deliver the deed to the friend. However, the farmer’s intent to presently transfer the farm to the friend can be implied from his conduct. The farmer signed and notarized the deed and then started to deliver it to the friend before stopping for lunch. Therefore, the deed was validly delivered (Choice A). The friend indicated his acceptance of this gift, and in any event, his acceptance is presumed because the farm is beneficial to him. Therefore, the farmer likely transferred his farm to the friend.

Question 16

The right to subjacent support—i.e., support from beneath the surface of land—arises when the owner of land grants the right to mine minerals to a third party. The owner of the mineral rights may be:

strictly liable to the surface owner for any failure to support the land and any buildings that existed on the land at the time the mineral rights were conveyed (provided that the damage would have occurred in the land’s natural state) or

Answer 16

liable for negligence for any damage to improvements built after the mineral rights were conveyed.

Question 17

A deed that names a nonexistent grantee is

Answer 17

void as to that nonexistent grantee. So if a nonexistent grantee was conveyed an interest in a tenancy in common, then the grantor would retain the nonexistent cotenant’s interest and have a tenancy in common with the other cotenant(s) named in the deed.

Question 18

mortgagor and waste

Answer 18

A mortgagor (e.g., debtor) in possession of the mortgaged property has a duty not to commit waste that would impair the mortgagee’s (e.g., lender’s) security interest in that property.

Question 19

deficiency judgment

Answer 19

When foreclosure sale proceeds are insufficient to satisfy the mortgage obligation, many jurisdictions allow the mortgagee to seek a deficiency judgment against a party who is personally liable for the loan. Here, the owner is not personally liable because he received a nonrecourse loan.

Question 20

A real covenant will only bind successors in interest if

Answer 20

the following elements are met: (1) writing, (2) intent to run, (3) touch and concern, (4) horizontal privity, (5) vertical privity, and (6) notice if the person to be bound was a purchaser.

Question 22

Under a land-sales contract, the seller can use the proceeds from the sale to eliminate a mortgage obligation on the property. If the proceeds exceed the amount of the outstanding mortgage, then the title defect will

Answer 22

be extinguished and the seller can deliver marketable title to the buyer upon closing.

Question 23

When mortgaged property is transferred to a donee, the donee may assert

Answer 23

the donor-mortgagor’s defenses against the mortgagee-lender. But a purchaser who assumes an existing mortgage obligation as part of the purchase price may not do so.

Question 24

If a future-advances mortgage is optional, then

Answer 24

the future-advances mortgagee has priority with respect to amounts loaned before receiving notice of a subsequent mortgage. But if the advance is obligatory, then the future-advances mortgagee has priority with respect to amounts loaned before and after receiving notice.

Question 25

obligations to repair easements

Answer 25

Owners of an easement have the right and the duty to maintain the easement unless otherwise agreed. So when the easement is shared, the owner who maintains or repairs the easement may seek contribution from the other owners. The owner of the servient estate also has an obligation to contribute if he/she uses the easement.

Question 26

A debtor remains personally liable for the mortgage debt even after the mortgaged property is transferred to another. But the debtor will be relieved of personal liability if

Answer 26

the lender releases or impairs the mortgaged property.

Question 27

Easement by implication essay answer

Answer 27

If the owner of two parcels of land previously used one parcel to benefit the other, then the court may find that, upon the transfer of one parcel, the parties intended the use to continue if that use was continuous, apparent or known, and reasonably necessary to the dominant land’s use and enjoyment (as distinguished from an easement by necessity, which requires strict necessity).

Question 28

trespass to chattels vs conversion

Answer 28

Trespass to chattels v. Conversion Trespass to chattels Minor intentional interference with plaintiff's right to control chattel Liable for actual damages—eg, cost of repairs, loss of use Conversion Substantial intentional interference with plaintiff's right to control chattel Liable for fair market value of chattel at time of conversion

Question 29

A defendant is liable for intentional infliction of emotional distress (IIED) when the defendant,

Answer 29

by extreme and outrageous conduct, intentionally or recklessly causes the plaintiff severe emotional distress. Conduct is considered extreme and outrageous if it exceeds the possible limits of human decency, so as to be entirely intolerable in a civilized society.

Question 30

Under the traditional common-law approach, innkeepers owed the highest duty of care to their guests and could be liable for even slight negligence. However, in most jurisdictions today, innkeepers only owe a duty to

Answer 30

to use ordinary care to protect their guests while they are on the premises.* Ordinary care is the care that a reasonably prudent person would use under the circumstances. To determine whether a defendant has used ordinary care, the trier of fact (e.g., the jury) may consider all relevant factors—including compliance with community or industry custom. But compliance with (or deviation from) custom is not conclusive on the issue of negligence. That is because custom is merely one factor considered by the fact finder to determine whether the defendant acted as a reasonably prudent person.

Question 31

A negligence action requires proof of four elements:

Answer 31

duty, breach, causation, and damages.

Question 32

Under the traditional common-law approach,* land possessors owe

Answer 32

a duty of reasonable care to foreseeable land entrants, including invitees who enter the land for a business purpose. However, an invitee is treated as a trespasser if that person intentionally enters an area without permission. But if that person is a known or anticipated trespasser, the landowner owes a limited duty to: warn the trespasser about, or protect the trespasser from, hidden, artificial (i.e., man-made) dangers that are known to the land possessor but unlikely to be discovered by the trespasser and use reasonable care in active operations conducted on the land. A land possessor who breaches this duty and causes the trespasser physical harm is liable for negligence.

Question 33

Under the traditional standard for res ipsa loquitur, negligence is inferred if

Answer 33

(1) the plaintiff's harm would not normally occur unless someone was negligent, (2) the defendant had exclusive control over the thing that caused the harm, and (3) the plaintiff did nothing to cause the harm. *The modern trend among many courts is to ignore the exclusivity requirement when applying the traditional standard for res ipsa loquitur in negligence actions that involve products liability.

Question 34

Where multiple forces combined to cause the plaintiff's harm and any one alone would have been sufficient to cause the harm, the test for actual causation is

Answer 34

whether the defendant's conduct was a substantial factor in causing the harm.

Question 35

Strict products liability is imposed on any commercial seller in the chain of distribution if

Answer 35

(1) the commercial seller's product contained a defect when it left the commercial seller's control and (2) that defect caused the plaintiff harm.

Question 36

Here the facts state that State A applies the minority theory, which is the title theory of mortgages, as well as the common law four-unities test. Due to this, when the husband granted the mortgage to his friend it severed the joint tenancy because

Answer 36

it was a transfer of title. This also served to sever the four unities in a title theory state, as the husband and wife no longer share an interest that was created at the same time in the same instrument. Thus, the husband’s execution of the mortgage severed joint tenancy with his wife.

Question 37

Impact of a joint tenant leasing their portion of the property?

Answer 37

There is a split among jurisdictions with respect to joint tenancies when one joint tenant leases his interest. Some jurisdictions hold that the lease destroys the unity of interest and thus severs the joint tenancy, while other jurisdictions believe that the lease merely temporarily suspends the joint tenancy, which resumes upon expiration of the lease. The facts do not provide which rule State A follows in this respect. Due to this split in jurisdictional application, whether the husband’s execution of the lease severed the joint tenancy is unclear. If State A holds that a lease destroys the unity of interest, then the joint tenancy between husband and wife was severed. However, if the State A holds that it is merely suspended, then it the joint tenancy was not severed.

Question 38

married co-tenants and rent

Answer 38

A co-tenant must account to other co-tenants for rent received from third parties, but can deduct operating expenses, including necessary repairs, when calculating net proceeds. Third-party rents are divided based on the ownership interest of each tenant. If the execution of the lease did not sever the joint tenancy then the husband and wife own the property still as joint tenants. The third-party rent should therefore be divided equally between the two of them.

Question 39

joint tenant giving lease dies

Answer 39

At death, a joint tenant’s property passes automatically to the remaining joint tenants due to the right of survivorship. Here, assuming the lease did not sever the joint tenancy, the wife still has the right of survivorship after her husband passes. When the husband dies, then, the lease would terminate and the remaining property would pass automatically to her.