Property Flashcards
Life Estate, wording, and duties
Life estate: Ex.: “To A for life.”
• Life tenants must pay taxes, pay interest on the mortgage, and make repairs. Life tenants cannot commit waste.
• Restrictions on alienation (transfer) are permitted.
Fee Simple Determinable, magic words, future interest
Ex.: “To A for so long as A is in college.” A has a FSD. O has a possibility of reverter.
• Measured by time
• Magic words of creation (SUWD): so long as, until, while, and during
• This estate ends automatically when the time period ends.
FI: possibility of reverter
Fee simple subject to condition subsequent (FSSCS), magic words, future interest
“To A but if A smokes, O reserves a right of entry.” A
has a FSSCS. O has a right of entry. Tip: if you see FSD and FSSCS language, there is a preference for a court
to find a FSSCS.
- Conditional; measured by the occurrence of an event
- Magic words of creation: a right of entry must be reserved for the owner (O) (usually you’ll see “conditional” words too like “but, if, upon condition…”).
• This estate ends when O enters.
- Right of entry
Fee simple subject to executory interest (FSSEI)
: Ex.: “To A but if A smokes, to B.” A has a FSSEI and B has the executory interest.
• You will see durational or conditional language, but it will go to party B instead of back to O. ( ie not grantor, some 3rd party, or heir)
Vested Remainder
Held by grantee
Remainder: usually follows a life estate
A remainder is vested when the remainderman is ascertained and it is certain to become possessory
Contingent remainder (UUU)
It is contingent when the remainderman is (UUU) unborn, unascertained, or if it is uncertain to vest due to a
condition
Springing vs Shifting Executory interests
- Shifting: when B divests a third party of his interest. A shifting executory interest divests some interests in another transferee prior to its natural expiration, thereby cutting short the prior estate.
- Springing: when B divests O of his interest. A springing executory interest divests the transferor in the future and has a gap of time.
Restraint on Alienation
Restraint on alienation is a restriction in a deed or will conveying real property on future conveyance of that real property.
A grantor can place a reasonable restraint on the grantee’s ability to freely transfer
If the restraint is unreasonable, a court will strike it from the conveyance
Tenants in Common
Creation: Only the right to possess the whole is needed.
Unified possession of estate—each tenant owns an undivided interest in the entire property
No right of survivorship; interest is freely devisable or transferable
In most states there is a presumption that a conveyance to two or more people is a tenancy in common
Joint Tenancy (TTIP)
Creation: (TTIP) time, title, interest, possession, plus express language needs to be used (e.g., “as joint tenants with a right of survivorship”). Joint tenants have a right of survivorship.
• Destruction:
*It can be partitioned.
Or, it
*can be severed by (GSAM) giving it away,
signing a contract of sale,
*an actual judicial sale by a creditor,
*or granting a mortgage in a title theory state.
Tip: one cannot give a JT interest away by will.
If one joint tenant conveys his interest, it severs (destroys) the joint tenancy and creates a tenancy in common
TENANCY BY THE ENTIRETY
Creation: Similar to a JT but the parties must
be married.
It can only terminate by
- death,
- divorce,
- mutual agreement, or a
- mutual creditor of both executing on its interest
Cotenants-Possession, and Ouster and Adverse Possession of property
Possession—each cotenant has the right to possess the entire property
• Ouster—A cotenant who is being denied access can bring a court action to regain access to the property
• Adverse Possession—If one cotenant ousted the other, he can make a claim for adverse possession if he meets the requirements.
Cotenants Profits Sharing
In general, a cotenant does not have to share profits that he makes through his own efforts from the land.
Exceptions: if there is ouster, depletion of natural resources
in a way that decreases the value of the land, or lease to a third party
Ie: • A cotenant must share rents received from a third party
Cotenants Repairs and Improvements,
4) Repairs and Improvements
• A co-tenant does not have a right to be reimbursed by other co-tenants for repairs, even if necessary.
• A co-tenant may only seek contribution for necessary repairs if the co-tenant gave notice of the need for repairs.
In general, a co-tenant is not entitled to reimbursement for repairs. However, most jurisdictions allow contribution for necessary repairs in actions for accounting or partition. In some jurisdictions, a co-tenant can maintain a separate action for contribution so long as the other co-tenants had notice of the necessary repairs.
Cotenants-operating Expenses
Operating Expenses (e.g. taxes, mortgage payments)—a cotenant can generally collect expenses if he paid more than his share
3) Right to contribution: for taxes,
mortgage payments, and necessary repairs.
4 Types of Leases and what they are
TYPES OF TENANCIES
• Term for years: a tenancy for a specific period of time
(not necessarily “years”).
• Periodic tenancy: a tenancy without a specific end date.
• Tenancy at will: a tenancy that either party may
terminate without notice.
• Holdover tenancy: a tenancy that occurs when a tenant
stays past the end date of his lease
Tenants Duties under lease
Tenant’s Duties—pay rent, avoid waste, and make reasonable repair
Avoid Waste—tenant cannot damage the property and must repair damages he cause
If tenants fails to pay rent, what can the landlord do and when does rent payment obligation end?
Pay Rent—if fails to pay rent, landlord can sue for damages and eviction
- Surrender—tenant transfers lease back, and landlord accepts, tenant no longer obligated to pay rent
- Abandonment—if the tenant abandons the property, landlord can accept as an offer of surrender
Termination—occurs automatically at the end of the lease term OR if surrender occurs
land Lord duties (Not elements, just what they are)
1) Duty to Repair—landlord must repair damages under residential leases, unless the tenant caused the damages
2) Implied Warranty of Habitability
3) Covenant of Quiet Enjoyment
Implied Warranty Of habitability , and How does Tenant enforce it, and their options of Landlord fails?
here is an implied warranty of habitability for residential property where the landlord must keep property in
habitable condition (Look for failure to provide heat, electricity, running water, or
plumbing. These would render a property unfit for residential use.)
Tenant must give notice to the landlord and reasonable opportunity to repair
If the landlord fails to make repairs, the tenant may:
i) Stay in the property and deduct rent until the repair occurs;
ii) Stay in the property, pay for repairs, and deduct the cost from rent; or
iii) Terminate the lease and move out
Covenant of Quiet Enjoyment
• Applies to residential and commercial leases
• The landlord cannot disrupt the tenant’s possession or enjoyment of the property
a) Constructive Eviction:
i) Landlord substantially interferes with the tenant’s use and enjoyment of the
land;
ii) Tenant gives notice of the problem and reasonable time for the landlord to
repair, but the landlord does not repair; and
iii) Tenant vacates the premises in a reasonable amount of time
Tip: the tenant must actually leave to win an eviction action.
Assignment of Lease, liability
When a tenant assigns his entire interest, he
is liable on the lease under privity of contract. The assignee
is liable under privity of estate
Sublease, liability
When the tenant rents his land to a sublessee
but has some interest left, the sublessor (Ie person who originally had lease) is liable on the
lease under privity of contract and estate.
The sublessee is not liable to the landlord on the lease (but may be sued by the sublessor)
sublease vs assignment
o Assignment—a transfer of the tenant’s entire remaining lease to a new party
o Sublease—a transfer of a portion of the tenant’s lease (less than the remainder of the lease)
Non-assignment clauses/non sublease
nonassignment and nonsublease clauses are
enforceable, but they are strictly construed and courts
will try to find a waiver.
If the lease prohibits only assignment, the tenant may still sublease
If the tenant violates the prohibition, the landlord can terminate the lease
• Waiver—if the landlord accepts payment from the new tenant, he waives the right to enforce the prohibition clause
Consent—some clauses allow assignment or sublease only with landlord’s consent
• The landlord can only withhold consent on a commercially reasonable ground
What is the Duty to mitigate for Landlord
3) Duty to mitigate: The landlord must try to mitigate
damages by re-renting the land. (Note: this duty did not
exist at common law.)
o Landlord has duty to make reasonable efforts to re-rent the property
o The duty applies even if the tenant improperly breached the lease
o If a tenant moves out early and the landlord has multiple vacant apartments, the landlord is
not obligated to prioritize the tenant’s vacant apartment
Adverse Possession Elements (OCEAN)
a. Continuous—possession must be continuous and uninterrupted through the statutory
period
Tacking—allows subsequent possessors to “tack on” to prior possession periods
• Requires some type of privity (e.g., blood, contract, deed, will)
b. Actual—adverse possessor must have actual possession of the land
c. Open and Notorious—must make use of the land as a reasonable owner would
d. Hostile—must be without the owner’s permission
e. Exclusive—must not share the land with the true owner
Note: if the true owner has a disability (JIM: jail, insane, minor) at the time the adverse possessor enters, then the statutory time period is tolled until the disability
is lifted
Scope of Possession for Adverse Possession
o Generally, only transfers title to the portion that was actually adversely possessed
o Color of title (i.e., enters pursuant to a deed or will that is not actually valid)—allows the possessor to obtain title to the whole property under constructive adverse possession
o Still subject to existing easements on the land
Transfer by will concepts (WILLS)
Transfer by will concepts: If property is specifically devised but the testator does not own it when he dies, the gift adeems (fails). There are exceptions (e.g., if insurance proceeds were paid after death, the beneficiary will take those).
Note: if the beneficiary dies before the testator, the gift will lapse (unless the jurisdiction has an antilapse statute that saves the gift).
Exoneration (WILLS)
At common law, if a testator makes a specific devise of real estate that is subject to a lien, the devisee is able to have the lien exonerated and paid off by the testator’s residuary estate. (Most states have abolished this doctrine.)
Requirements for Deed Requirements
- Must identify the parties,
- must be signed by the grantor,
- must include words of transfer, and
- must contain a reasonably definite property description
Intent to Transfer a Valid Deed, to grantee
Grantor must intend to make a present transfer of the property interest to the grantee
a. Transfer to grantee—creates a presumption of intent to transfer
Intent to Transfer a Valid Deed, to 3rd party agents
b. Transfer to Third Party Agents
1) To an independent third party for delivery to the grantee, but the grantor reserves the right to take the deed back—not deemed delivered
2) If the grantor does not reserve the right to take the deed back, the grantor’s intent to presently transfer the property is determined by the facts.
a) If the grantor intended to presently transfer, he cannot void the gift later
b) If the grantor did not intend to presently transfer, the transfer is not valid
3) Testamentary Transfer
• If the grantor gives the deed to an independent third party for delivery upon the grantor’s death, the grantor’s intent to make a present transfer is determined by the facts.
• If the grantor intended to transfer only upon his death, it is not a present intent to
transfer; it is a testamentary transfer and is governed by the wills requirements
General Warranty Deed, (6), and when breaches occur
a. Three Present Covenants
1) Covenant of Seisin—the grantor owns the land as described in the deed
2) Covenant of the Right to Convey—the grantor has the right to transfer title
3) Covenant Against Encumbrances—no undisclosed encumbrances
* Breach occurs at the time of conveyance
* Present covenants do not run with the land; a later grantee cannot sue the original grantor
b. Three Future Covenants
1) Covenant of Quiet Enjoyment—the grantee’s possession will not be interfered with by a third party’s claim for title
2) Covenant of Warranty—the grantor will defend against a third party’s claim for title
3) Covenant of Further Assurances—the grantor will do whatever is necessary to pass title to the grantee
* Breach occurs when there is interference with possession
* Future covenants run with the land; a later grantee can sue the original grantor
Quitclaim deed
o Contains no covenants of title
o The grantee receives whatever interest the grantor possessed
Special Warranty Deed
A special warranty deed contains the same covenants of title as a general warranty deed but only warrants against defects arising during the time the grantor has title.
Implied Warranty of Fitness or Suitability
for new homes sold by a builder-seller, there is an implied warranty of fitness.
o Seller warrants he used adequate materials and workmanship
o Covers hidden (i.e., latent) defects and obvious (i.e., patent) defects
o The buyer has a duty to reasonably inspect the residence
o Buyer may sue for breach against the builder, developer, and contractors within a
reasonable time after discovery of the defect
