Property Flashcards
(45 cards)
Fee simple subject to a condition subsequent
Defeasible fee that is created through specific conditional language (but if, unless, provided that). Upon the condition, the grantor or their successors in interest has the right to reenter to terminate the FSSCS if the right was explicitly retained in the conveyance.
What are the rules regarding taxes and repairs for cotenants?
Taxes: a cotenant can collect contribution from the other cotenants for paying more than their portion of necessary or beneficial operating expenses. Cotenant in sole possession can collect only for the amount that exceeds the property’s rental value.
Repairs: no right to be reimbursed for repairs absent an agreement to the contrary.
What is the relationship between joint tenants and mortgages?
A joint tenant may only grant a mortgage on his/her own joint tenancy interest wihtout the other joint tenant’s consent. Therefore, a mortgage executed by one joint tenant will only attach to that tenant’s property interest. In a lien theory state, the mortgage does not sever the joint tenancy unless the mortgage is foreclosed. In a title theory state, the mortgage transfers title and severs the joint tenancy. If both joint tenants execute a mortgage, then the mortgage can be enforced against both.
What may a landlord recover when a tenant breaks the lease?
The monthly rent as it becomes due.
When is a right of first refusal not subject to the RAP?
When it is granted in a lease
A mortgage will continue to encumber a property even after the property is transferred. When will the mortgage not encumber the property?
If the transferee is protected by the recording act in the jurisdiction. For instance, in a race jurisdiction, a purchaser for value who records first will prevail over a prior conflicting interest regardless of whether the purchaser knew of the interest.
How are competing property interests prioritized?
Look at the jurisdiction’s recording act. In a notice statute, a purchaser for value need only have purchased without notice of the prior interest to prevail.
What constitutes notice in a notice or race notice jurisdiction?
Actual: direct personal knowledge
Constructive: when notice is given through proper recording of a prior interest
Inquiry: when a reasonable investigation would have disclosed the existence of a prior interest
What does the doctrine of lapse do?
Under the common law, the doctrine of lapse will make a devise of real property fail if the beneficiary dies before the testator and no alternative beneficiary is name, unless the testator indicates a clear intent that the devise is to survive the beneficiary’s death. If the devise fails, the lapsed gift gift will become part of the residuary estate. However, all jurisdictions have anti-lapse statutes, which prevents a gift from lapsing when:
the gift is made to parties specified by the statute (usually the immediate relatives) and
those parties leave children or other descendants who survive the testator
A mortgagor is free to sell mortgaged property unless the agreement states otherwise. The mortgage remains attached to the property and the debtor remains personally liable for the debt secured by the mortgage. What are the buyer’s obligations with respect to the debt?
This depends on whether the buyer:
too subject to the mortgage, in which case the buyer does not agree to pay and is not personally liable for the debt or
assumed the mortgage in which case the buyer expressly agrees to pay and becomes primarily liable for the debt, while the debtor becomes secondarily liable as a surety
What effect does the modification of a senior mortgagee’s priority over junior mortgages or liens have?
There is normally no impact on the priority. However, a modification that materially prejudices a junior interest will subordinate the senior mortgagee’s interest only as to the modification. The senior mortgagee’s original interest will therefore remain superior to the junior interest.
Priority of modifying senior mortgages after the creation of junior mortgages if the modification is not prejudicial
Senior mortgage + modification > junior interest
Priority of modifying senior mortgages after the creation of junior mortgages if the modification is prejudicial
Senior mortgage > junior interest > modification
What is the first in time first in right rule?
The “first in time, first in right” rule is used to prioritize interests when, as here, no recording act is provided. And modification of a senior mortgage generally does not forfeit that mortgage’s priority over a junior mortgage. But if the modification materially prejudices the junior mortgage, then the senior mortgagee subordinates its interest as to the modification—but the original mortgage remains superior.
What is the priority of a purchase money mortgage?
A PMM has a super priority over all the other liens that arose before it, regardless of whether the PMM or those liens were recorded.
Lien priority
Purchase money mortgage > first recorded liens > all other recorded liens > unrecorded liens
What is an easement appurtenants and how may it be used?
A nonpossessory right to use another’s land that benefits the easement holder’s land. Unless otherwise stated, an easement appurtenant cannot be used for the benefit of property other than the dominant estate.
Explain a covenant and its effects.
Promise between parties to do or not to do something on land that is enforceable by an injunction or an action for money damages. The promised parties are bound under contract law, but their successors are only bound if the covenant runs with the land.
For the benefit to run: writing, intent to run, touch and concern, limited vertical privity
Burden: writing, intent to run, touch and concern, horizontal and vertical privity, and notice
How may an easement be terminated?
By written release, prescription, estoppel, condemnation, and abandonment. Abandonment requires the owner of the easement to act in an affirmative way that clearly shows intent to relinquish the easement right. Mere nonuse is not sufficient.
A warranty of fitness or suitability is implied in almost all jurisdictions in a contract for the sale of a newly constructed resident. What does this warranty do, and who may claim it?
The seller asserts that he used adequate materials and workmanship for the residence. The implied warranty generally covers latent construction defects or problems that do not manifest themselves until after the sale. The buyer has a duty to reasonably inspect the residence for patent defects but is not required to employ an expert home inspector. Generally, a suit for breach of the implied warranty may be brought against builders, developers, and contractors within a reasonable time after discovery of the defect. A majority of jurisdictions permit both the initial homeowner-purchaser and subsequent purchasers who do not contract directly with the commercial developer to recover damages.
What happens when the mortgagor sells mortgaged property?
Unless the lender (mortgagee) agrees to release the borrower (mortgagor) from liability for the loan, the borrower remains personally liable on the loan obligation after the mortgaged property is transferred. If a deed is silent or ambiguous as to the buyer’s (transferee’s) liability, then the buyer takes title to the property subject to the mortgage and is not personally liable upon default. But although the buyer has title, which allows him to possess the property, the property is still subject to a potential foreclosure action upon default. Then, only the seller (transferor) remains personally liable for a deficiency.
What happens if the buyer assumes the mortgage in a sale?
the buyer and the original mortgagor are both personally liable to the lender. If the mortgage obligation is unpaid, the lender may sue either the mortgagor-borrower or the transferee-buyer personally and if there is still a deficiency, sue the other. Most jurisdictions do not require that the assumption agreement be in writing; if proven, an oral agreement is enforceable
What are the three present covenants?
The three present covenants are the covenant of seisin, the covenant of the right to convey, and the covenant against encumbrances.
When is a breach of the covenant against encumbrances not operative?
Some states do not recognize a breach if the grantee had knowledge of the encumbrance, if it was visible, or if it benefitted the land.
