Property Flashcards
1, Parties identities, 2. Words, indicating parties intent to buy or sell, 3. Adequate description of property and 4. Purchase price. (591 cards)
1
Q
Essential Terms
A
- Parties identifies, 2. Words, indicating intent to sell or buy, 3. Adequate description of property 4. Purchase price.
2
Q
Warranty
A
Seller’s promise to deliver marketable title at the closing.
3
Q
Equitable conversion
A
Buyer is equitable owner of property during executory period before closing.
4
Q
Equitable conversion: Seller
A
gets the equitable right to be paid the purchase price.
5
Q
Majority: Buyer bears
A
Risk of loss during the executory period. if the property is damages; the buyer must complete the purchase and pay full price at closing.
6
Q
CL
A
Caveat emptor. Let the buyer be aware
7
Q
Modern: Disclosing material defects
A
requires seller of residential property to disclose known any material defects that buyer cannot reasonably discover.
8
Q
Deed
A
The most common transfer.
Deliver and accept the deed.
Words, actions that demonstrate a present intent to immediately transfer the property.
Ex. Physically hands it, or relinquishing control.
9
Q
Deed- The 3rd party receives the deed
A
Grantor has relinquished control of the deed to make an immediate transfer.
10
Q
Delivery doesn’t occur:
A
Grantor still retains control over the deed.
Grantor reserves right to retrieve the deed from the 3rd party.
11
Q
Death Escrow:
A
Oral death conditions usually invalid as an attempt to circumvent the requirements for a will.
12
Q
Doctrine of Merger
A
Sales contract merges into the deed upon delivery.
Any contractual guarantees about title disappears. + Buyer’s remedies for title problems are limited to the covenants of title contained in deed.
13
Q
Recording
A
Filing a property in the public record office. It does not make a deed valid between grantor and grantee. Once transferred, deed is valid regardless of recording it.
14
Q
Recording
A
puts 3rd parties on notice of the relevant property interest.
15
Q
First in Time Rule
A
a Given property interest has priority over those that arise later.
16
Q
Bona Fide Purchasers for value
A
Innocent purchasers who buy property without sufficient notice of preexisting interest.
17
Q
Race statutes
A
a recorded interest prevails over any interest recorded later. Extinct.
18
Q
Notice Statutes
A
A bona fide purchaser prevails against any prior interest of which he lacked notice, regardless of when or whether the BFP records.
19
Q
Race notice Statute
A
a bona fide purchaser prevails against any prior interest of which he lacked notice, but only if the bona fide purchaser records first.
20
Q
Legal theories about the nature of mortgage
A
Lien theory, title theory
21
Q
Lien theory
A
mortgage gives mortgagee a security interest in the property with no change in title.
22
Q
Title theory
A
mortgage gives the mortgagee title to the property until the debt is paid.
23
Q
unless mortgage agreement provides otherwise,
A
the mortgagor (beggar) is free to sell the property.
24
Q
the sale of the house does neither automatically
A
remove the mortgage, nor satisfy the underlying debt.
25
Due on sale clause:
if the mortgagor beggar sells the mortgaged property, the mortgagee (bank) may declare the entire underlying debt to the immediately due and payable.
26
Mortgage: seller defaults:
the bank can take the property from the one who purchased the property. Foreclosure: taking the house from the buyer even if the buyer did not assume the debt.
27
If the seller has defaults on debts, and the buyer did not assume the debts,
the seller is the only person responsible for deficiency.
28
If the seller has defaults with remaining debts, and the buyer subject to mortgage & agreed to assume the underlying debts upon purchase,
The buyer is personally, and primarily liable for the debt.
The seller is secondarily liable on the debt unless released.
29
Foreclosure
The mortgagee may seize and sell the property if the mortgagor defaults.
30
Equity of redemption
Mortgagor's (beggar) in Common law, equitable right to avoid foreclosure by paying remaining mortgage debt before the foreclosing sale.
31
Statutory Redemption
Entitles mortgagor (beggar) to purchase property from foreclosure buyer specified period of time. e.g., auction.
32
Foreclosed sale is distributed to
lien holder priority order.
33
Purchase money mortgage
provides money to buy the property.
PMM is priorized to any preexisting liens.
34
Future advance mortgages
The lender (beggar) makes an initial lump sum payment followed by periodic disbursements.
35
If the future advance lender is required to make the periodic disbursement,
all disbursements 1,2,3,4,,, has the same priority as the initial distribution.
36
If the disbursement is optional, then, the priority....
the Priority depends on the initial notice of the second mortgage.
37
If there is no notice,
priority is to the entire loan.
38
If notice about the 2nd mortgage,
All the other disbursements are junior to the second mortgage.
39
1. Cost of foreclosure and sale: court cost, lawyer cost;
2. mortgage being foreclosed;
40
3. all junior liens and mortgages in priority order and
4. Beggar if anything left.
41
Mortgagor can sue the mortgagee for deficiency.
liens left.
42
Liens senior to the foreclosing mortgage
unaffected by the foreclosure.
43
Liens junior junior lienholder is joined or properly notified then
The foreclosure extinguishes the junior lien. the foreclosure does not automatically eliminate the underlying junior debt.
44
If the junior lienholder is not joined, not noticed;
The junior lien survives and will encumber the property after the foreclosure sale.
45
Defeasible Estates
Fee simple determinable, Fee simple subject to a condition subsequent.
46
Fee simple determinable can
1. Immediate right of possession; 2. No definite ending date, 3. Is defeasible; because it can be cut short by another estate.
47
If the condition occurs in Fee Simple Determinable,
Fee simple will end automatically; and property will return, revert to grantor. The future interest: is the banker's interest of possibility of reverter.
48
Fee simple determinable
"so long as no one smokes on the property"; once smoking, fee simple determinable ends, and the property revert to the banker in fee simple.
49
Fee simple subject to a condition subsequent:
Doesn't end automatically when condition occurs. Grantor must take step of reentering the property and retaking possession; Banker has right of entry.
50
Right of reentry
Someone smokes: & Grantor wanted to reclaim the land; then, must affirmatively enter the land and retake possession.
51
Life estate
determinable.
52
Remainder
future interest that typically follows the life estate.
53
Fee simple subject to a condition subsequent: Conditional language
But if, on condition that, unless, provided that
54
Life Tenant (farmer) has a duty to
preserve property by avoiding several types of waste.
55
Duty to avoid permissible waste
life tenant to take reasonable steps to maintain the premises. (EX. Tax)--> if farmer did not pay, the daughter can pay, and daughter can be reimbursed from the life tenant.
56
Life tenant's obligation
limited to amount of income that could be derived from the land whether that is property's rental value or value of other resources.
57
Life tenant must avoid voluntary waste;
Life tenant must not alter the property in ways that materially decreases its value.
58
Life Tenant may not engage in
ameliorative waste; which constists of altering the property in ways that change its character, even if those changes increase the propery's value.
59
The farmer, LT, cannot change it into residential subdivision, even if it will increase the value of the land.
because it changes the character of property and can create the ameliorative waste.
60
Remainder:
may not cut the life estate short; becomes possessory only on natural conclusion of the preceding life estate (death). immediately upon termination of the preceding estate.
61
Executory interest
can cut off a fee simple estate. can become possessory after some gap in time between it and the prior estate.
62
Fee simple subject to an executory limitation
defeasible interest
63
Transferability of future interests
gift, sale, will, intestate distribution.
64
TiC
50%, 30%, 20%... Cotenant's interest don't have to be equal; each holds undivided interest.
65
TiC
Each cotenant is entitled to possess the entire property simultaneously. Each may not exclude each other from the property; each may transfer his share without consulting the others.
66
TiC Son can sell
his 20% to a complete stranger; a Stranger becomes cotenant with Son A and B.
67
TIC Son B 30% can lease
to lessee who would have the same right of possession during the leasehold; the lessee's right the same as Son A and Son C.
68
Most states, TiC presume
conveyance to multiple grantees creates a TiC unless the words specify otherwise.
69
Joint Tenancy with the right of survivorship 4 unities:
Possession, Interest, Time, and Title. (PITT).
70
Unity of Time
Requires that JT interest must vest simultaneously
71
Unity of Title
requires the JT must drive their ownership from the same deed or other instrument.
72
Unity of Interest
Requires that joint tenants must hold the property in equal shares.
73
Unity of Possession
requires that each joint tenant must have the right to use the entire property.
74
Most states: require clear language to create a joint tenancy
Jointly with a right of survivorship
75
Courts infer JT from words such as
share and share alike; especially if the 4 unities are present.
76
Right of survivorship
if one joint tenant dies, then, his share ceases to exist and the shares of the remaining joint tenants increase proportionately.
77
Right of survivorship: if Son A sells to James Choi (1/3): the sale cause :
Severance.
78
Severence
One joint tenants interest drops out and is no longer subject to survivorship.
79
Severed interest (1/3 of James Choi) becomes held as a TiC, while
the remaining interest continue in joint tenancy.
80
so if Son B dies, Son C gets
2/3. Because of Son B's death.
81
The most common method of severance
Sale or other conveyance of one joint tenant's share.
82
Minority Jurisdictions;
if joint tenant leases his interest
83
What if Son A mortgaged his interest?- Lien theory states;
A mortgage creates a lien against the property but doesn't transfer ownership.
Most states: mortgage does not sever the joint tenancy.
84
Title Theory States
Mortgage transfers title to the mortgagee (bank) until the debt is paid. In this case; a mortgage severs the joint tenancy because it destroys the unity of title.
85
Equitable conversion
severs the joint tenancy. because it destroys the unity of title (not C, as C sold it to Z. Z has conferred equitable ownership of C's share.
86
Sale contract of C --> Z brings about severance
even before the sale is finalized.
87
What if A executes the will? If A dies,
A's interest vanishes upon A's death; Will left nothing; but B (1/2), and C (1/2).
88
Carrying costs
Expenses that affect the entire property; cotenants are responsible for carrying costs in proportion to their ownership %.
89
Partition;
judicial proceeding in which the court will end the cotenancy and divide the property among the cotenants.
90
Partition in kind
Property is physically divided in proportion to each cotenant's interest.
91
If physical partition is not available; (house or undivivable.)
Property is sold and the proceeds divided in proportion to each cotenant's interest.
92
Tenancy for years
lasts for a specified time, which could be more or less than a full year.
93
Periodic Tenancy:
lasts for a specified time period with automatic renewal for same period unless terminated; notice must usually equal one lease period.
94
Tenancy at will
last for an unspecified period and can be terminated by either party at any time.
95
Holdover tenants
stays after the lease terminates
96
if holdover tenants pays the rents & the Landlord accepts it;
creates periodic tenancy. Period equals to frequency of rent payments.
97
Tenant's duties
1. Pay rent, 2. Avoid waste, 3. Refrain from abandoning the premises.
98
LL's duties
1. deliver the premises 2. Honor the implied warrant of quiet enjoyment.
99
Legal possession:
no 3rd party has rights in the property sufficient to evict the tenant.
- Neither the LL nor someone holding through the LL has possession when the lease begins.
- exclusive right to possess the property.
100
Actual possession
The property is free from any holdover tenants or other wrongful occupiers when the lease begins.
101
Optometrist was a trespasser with no legal right of possession.
if the applicable law only requires legal possession, then, the dentist (2.1.-) can sue optometris (ended 1.1) for trespass; but she has no claim against the ll.... The LL failed to deliver the actual possession.
102
If the law requires actual possession;
LL had a duty to remove optometrist before dentist took possession; then, 1. Dentist can sue optometrist for trespass & sud LL for damages.
103
Warranty of quiet enjoyment
neither LL nor anyone with superior title will disturb tenant's possession.
104
Constructive Eviction
if the LL creates or fails to resolve a probelm, or breaches some duty to tenants, so as to substantially deprive tenant of the sue and enjoyment of the property.
105
First, in Constructive Eviction;
the tenant should notify LL of problem and provides opportunity to cure.
106
If LL fails to cure; then,
tenant can vacate, terminate lease, and seek damages.
107
Some states;
tenant to stay on the premises and stop paying the rent until problem is fixed.
108
E.g., Dentist and optometrists disagree who removes the garbage. The dentist just left leaving the keys to the landlord What are Ob & Rights? Dentist had to prove LL had a duty to remove garbge + would have had to prove other elements of constructive eviction were met;
Dentist would justifiably vacate the premises and could have properly terminated the lease.
109
LL would have argued that dentist improperly abandoned the premises
Abandonment;
- 1. LL may accep the T's surrender of the premises and terminate the lease.
110
Acceptance of tenant's surrender:
1. Express agreement, 2. Releaseing the premises to a new tenant at the same or a higher rate, 3. Substantially reconfiguring the premises so as to change their character.
111
2. LL may release the premises on the abandoning tenant's behalf
and then may recover the difference between the new tenant and that owed by the abandoning tenant.
112
3. LL may allow the premises
to remain vacant and sue the tenant for rent as it becomes due.
113
CL: LL faced with an abandoning tenant
has no duty to mitigate damages.
114
Doctrine of Retaliatory Eviction
prevents a LL from evicting or otherwise acting against a tenant in retaliation for the tenant's protected activity.
115
Protected Activity:
complaining about defects, asserting that LL failed to keep the premises in a habitable condition.
116
Condemnation does not breach
Covenant of Quiet Enjoyment.
117
Condemination;
entire property lease is terminated
118
If only a part of the Condemnation:
lease continues; on the part of the property; and tenant must still pay rent. Tenant can be entitled to a reduction ;or abatement to reflect diminished value of property.
119
Who gets $ upon condemnation
depends on Lease. If absent, tenant may be entitled to share of condemnation award in proportion to value of leasehold interest as compared to value of the property taken.
120
Assignment
occurs when a tenant, as assignor, assigns his entire remaining leashold interest to an assignee.
121
Privity of K between LL and Assignor extinguishes when
LL novation--> substitution to Assigneee
122
Privity of K
All covenants alive
123
Privity of estate: (David Schimmer is occupying)
Landlord and Assignee are liable to one another for any lease covenants that run with the land.
-1. Original parties intend it to do so; and;
-2. Touches and concersn the land: if it burdens or restricts the use or the enjoyment of th eland.
124
Covenant runs with the land
if the covenant makes the leasehold more valuable.
125
Because butcher, assignee has only privity of estate,
- the jeweler (assignor) is a party in all covenants of lease,
- the butcher (assignee) is a party with the covenants that run with the land.
- So, who is liable to pay the rent?
126
Pay rent: the obligation runs with the land.
Both the assignee, and the assignor but the assignee (butcher) is primarily liable, and the assignor (jeweler) is secondarily liable. LL can collect either one.
127
Fixing heating: (lease includes ll cov)
Covenant run with the land:
- Butcher (assignee) is affected to use and enjoy .
Under the privity of estate: the butcher is entitled to the benefit of the covenant. And she may require the repair of the heating system.
128
20% discount on the lamb meat: (written in the lease)
it does not touch and concern the land; it does not relate to anyone's use or enjoyment of the premises. it is personal between the jeweler and the landlord. Butcher (assignee) is not privity of contract with the landlord; covenant that is all but not rusn with the land, only Tenant
129
Sublease
the prime tenant still holds the leasehold interest; sublease is separate from the prime lease.
130
Privity of K & privity of estate:
The prime tenant and subtenant ar all liable for all covenant int eh sublease, but not liable for thoose in prime lease.
131
Pay rent: sublease:
Prime tenant is liable for LL.
Subtenant is Liable for Jeweler. Butcher is not liable for LL because there is no privity. This lack of privity makes Butcher : she cannot enforce the LL to fix the heating. the Butcher can still ask jewelr first assuming the prime lease requires the jewelr to make such repairs.
132
20% discount: sublease
Butcher is not liable because there is no privity.
133
Easement
A property interest giving someone a limited right to use someone else's land for a specified purpose.
134
Dominent tenement
the farmer's land that is benefited by easement.
135
Servient Tenement
the Plumer's land that is burdened by easement.
136
Easement
runs with the land. It binds on all successive owners of the servient tenement who take with notice of the easement.
137
Easement formed;
express grant (writing), express reservation, (if grantor conveys the land and retains an easement ofr himself).
138
Prescriptive easement: e.g.,
for 10 years the farmer openly drove the land, to reach the highway, without the plumer's permission. SoL was 8 years then, Creates prescriptive easement.
139
Prescriptive easement elements
1. openly, 2. without permission, 3. Continuously for entire time required by statutes.
140
Open
visible, or notorious, use would be apparent upon a rasonable inspection of property.
141
Continuous
if AP regularly uses the property as a reasonable owner might. SoL was 8 years for trespass (here, 10).
142
Lack permission
The farmer lacked plumber's permission.
143
Prescriptive easement: needs not be exclusive use to
confer.
144
Existing prior use IF
1) 2 parcels are severed from Common Ownership.
2) At the time, there was an apparent, continual use of one parcel for the benefit of the other; such the use might be expected to continue after severance.
3) Existing use is important or necessary to the use of the benfitted parcel.
145
Existing prior use: Necessary or important:
most courts it means, difficult or expansive to change the existing use.
Some courts existing use must be reasonably necessary or conveient for use of the benefitted parcel.
146
Necessity:
Easement is absolutely required for the use of the dominant parcel. Strict necessity. much higher need than easement of the implied, existing use. The Farmer has no access to a public road without the easement.
147
Conveying an easement without specifying it precise location or dimensions; can be fixed when
1) use, 2) consent, 3) acquiescence. Then, it cannot be changed unilaterally by either party.
148
if the farmer just said, "you can use it." but did not identify where;
the farmer used: for five years: still, farmer cannot change unilaterally by either party.
149
Easement terminates
1) expires, 2) Estopped, 3) government condemns.
150
Merger
what if the plumber grants the easement and sold it to the farmer.
the easement expires. One person owns both the servient and dominant tenement. if the farmer sells to someone else in the future the easement will not be revived.
151
Abandonment
the holder by words or by conducts intendds to give up all rights in the easement. (no use + no intent)
requires no use + evidence of intent to give up the easement.
152
Deed states
The parties their successor and their assigns agree there will be no shooting on the hunters' remaining property after 8 pm.
153
Restrictive Covenant:
agreement to sue to limit the use of one tract of land for the benefit of another tract.
154
Servient tenement: Burdened by the agreement
The hunter's land
155
Dominant tenement: benefited by the agreement
the teachers land because it has reduced noise.
156
Restrictive covenants
1. Real Covenants (money damages), 2. Equitable servitudes (injunctions or sp).
157
Restrictive Covenant is enforceable by or against the successors (purchasers of the land)
1. In writing, 2. Intent, 3. T&C, 4. notice.
158
Here, deed restricts the farmer not to shoot after 8 pm.
1. deed is in writing, 2. Deed is intentional, 3. T&C: because use of the land benefits the nurse 4. Notice: farmer can search public records -->
so the nurse can enforce the farmer the covenant between the hunder and the teacher. It is not subject to RAP.
159
License - tickets to sports
Formed when property owner gives someone else permission to use land for specified purpose.
160
License is not
interest in land.
It does not need in writing.
It does not run with the land.
Revocable anytime.
Man's revocation may be estopped if licensee expends money, property, or labor under licensing agreement.
161
F25. Revocation of licensing might also be restricted
if the licensee has acquired a license via contract. (tickets purchasers)
162
Controlling land use
1- 사: Restrictive covenants and licenses.
2- 공: Zoning laws gov.
163
Variance
Exemption from a zoning law.
164
Area variances
involve physical requirements
165
Use variances
allow uses that would otherwise be prohibited.
166
Most courts grant a variance only if it is
1. Consistent with public interest OR
2. Necessary to prevent hardship to the property owner.
not because it is convenients the deed restrictions XXXX.
167
Grantor and grantee cannot use a deed
to control zoning laws application.
168
Nonconforming use
when zoning law started, baker already using commercially.
169
Nonconforming use:
the gov may not immediately limit the use. It may allow it to some limit on continuing to use the current bakery.
170
EX. Nonconforming use
GV : Bakery can make small changes to the use; but may not undertake substantial expansion or other significant changes. So baker can continue to commerce but cannot expand.
171
Amortization
Requires the owner to gradually phase out nonconforming use over specific reasonable period of time.
172
Zoning law v. restrictive covenant:
the stricter of two limitations prevails.
173
Recording
usually, local county's recording office.
174
Recorded Document
provides notice of relevant property interest. Any document reflecting interest in land can be recorded. Recording does not invalidate a valid transaction, or a forged document. Recorded documents are indexed to make them accessible.
175
Grantor grantee index
grantor and grantee names
176
Records search
enables someone identify all recorded interests in a tract or property by establishing the chain of grantors and grantees
177
Recording: First in Time Rule
a given property interest has priority over those that arise later.
178
Bona Fide Purchaser for Value
without notice of the prior interest.
Someone who got as a GIFT is not a BFPV.
179
Without the notice of a prior interest
Notice is evaluated at the time the purchasers interest arose. Not in some later time. BFP who acquired notice after his purchase, remains the BFP.
180
1. Actual notice
when purchaser subjectively knows about the prior interest
181
2. Record or constructive notice
when an interest is properly recorded in public records; where someone could find it with a reasonable search.
182
Inquiry notice
notice based on possession; when someone is aware of facts that would lead a reasonable person to investigate a prior interest. e.g., house, powerlines.
183
Quitclaim deed provides
Inquiry notice because a quitclaim provides no covenants of title and thus is somehow suspicious. (minority cts)
184
Race notice statute
BFP prevails against any prior intreset of which he lacked notice; but only if the bona fide purchaser records first. Here, the credit union lacked notice of the unrecorded mortgage (bank) ; but the bank (1st mortgagee) recorded first; the credit union is bona fide purchaser and the bank recorded first; the bank has priority.
185
Estoppel by Deed
Doctrine of After Acquired Title.
186
Doctrine of After Acquired Title
Applies if a grantor purports to convey property that he doesn't own (grantor has no title) to a grantee who lacks notice of this problem.--> upon the grantor gets a title later on, the grantee now gets title.
187
In other words - Doctrine of after acquired title
the grantor is estopped from denying grantee's title.
188
Traditionally, estoppel by deed applies only against a grantor
who conveyed the land through a warranty deed; which contains the covenants of title.--> The grantee must assert the same quality of title that the deed purported to convey.
189
Common grantor
The subsequent grantee (teacher) is required to search for all conveyances by the seller; if she does, she finds seller-DR deed, and she has record notice of building restrictions on the Western Tract.
190
Common grantor
The subsequent grantee (teacher) is not required to search for all conveyances by the seller; She would not be charged with notice of seller DR deed and would not have record notice.
191
Wild deeds
Deeds from a seller who is outside a later buyer's chain of title and which generally don't provide record notice.
192
Properly indexed recording system
Someone can trace a chain of title by looking up all successive grantors and grantees.
193
If the builder searches at County Recorder Grantor Grantee Index,
She can't find the wild deed because both investor and developer are outside of the chain of the title.
194
The builder has no record notice;
BFP. Superior Claim.
195
Shelter rule
BFP's grantee is protected from prior interest to the same extent as the BFP grantor, even if the grantee is NOT BFP.
196
Title insurance
protects the policyholder against defects in the legal title to the property.
197
Owner's policy
insures the property's owner against losses from title defects
198
Lender's policy
protects a mortgage lender from title related losses.
199
Title insurance
personal to the insured; does not run with the land.
200
Each successive buyer or lender
should buy the policy if it wants coverage.
201
Title Insurance Policy
usually transfer to owners who succeed to the insured by operation of law as opposed to those who succeed by purchase.
202
EG policyholder sold the property to a buyer
buyer is not covered by title insurance.
203
EG policyholder died and left the property to her heir (title insurance)
heir covered by title insurance.
204
Owner's policy
continues to protect owner against title related liabilities even after owner sells the land.
205
Both owner's policy and lender's policy
insureer defends and indemnifies the insured against covered title defects, paying either the cost of curing the title defect or reduction in market value; up to the policy limit.
206
Delivery and Acceptance of the deed
1. Teacher must deliver the deed.
2. The farmer must accept the deed (Giving $$$).
207
Delivery occurs
words or actions that demonstrate a present intent to immediately transfer the property.
Grantor must lose the control of the deed with intent to immediate transfer. e.g., physical hand off is the clearest example of delivery. eg., taking it from the teacher: accept.
208
If acceptance is not clear; the law presumes acceptance.
if the grantee is benefitted from transaction.
209
Grantor may not take back the deed.
Grantee is advised to record the deed.
210
Deed requires
The identifiable, existing grantee. E.G., Grantee; Farming INC XXXXX (사실 그런 회사가 없는 경우, 죽은 사람도 마찬가지)
211
Deed is effective to transfer title
regardless of any consideration paid. e.g., GIFT OK. No requirement a deed must refer to consideration paid by the grantee.
212
Recording: public office: just notice of someone's title.
nothing to do with transfer of the deed.
213
Teacher orally says, "don't record the deed before I die" to the farmer, and died: her will wrote, "everything to my sister." Who owns the deed?
Farmer. Teacher delivered the deed with intent to transfer the property.
214
Teacher told her brother to give the deed to the farmer asap.
A week later, Teacher want her brother destroy the deed: doesn't work. Farmer wins the sue.
215
No preconditions:
Delivery is complete when the 3rd party - brother- receive the deed.
216
Delivery
intent to relinquish the control fo the deed & make immediate transfer.
217
Right reserved
The grantor might expressly reserve the right to retrieve the deed from the 3rd party, so delivery doesn't occur; because the grantor did not intent to immediately transfer the property.
218
"I go to Bahama. Pass this deed to the farmer." "Will you do it asap?"
1. No conditions on bro's transmission of the deed.
2. No rights reserved to take the deed back.
3. Delivery was complete.
219
"Here's the deed for the farmer. Would you give it to him when I die?" "Don't return to me for any circumstances."
Lawyer larry received: Death Escrow.
Teacher cannot get it back.
Delivery is complete.
Court finds teacher beyond her control of the deed.
220
Direct Delivery with Death Condition (Teacher gives the deed to the farmer and says, "I want yo to have the land after I died. Deed won't be effective until then."
Doesn't work.
221
Teacher's intent to transfer property upon her death
may use a will or a 3rd party death escrow. No direct giving deed, verbally conditioned on the grantor's death.
222
Teacher locked the executed deed in her desk--> even if the farmer steals it, records it, and sells it to his daughter
Daughter has no interest because teacher never delivered the deed.
223
Forged deed
Someone other than the grantor executes the deed without the grantor's authorization. VOID.
224
F25 Fraud in the execution
The grantor is tricked into thinking that she is signing sth other than a deed. VOID.
225
Fraud in the inducement
The grantor understands that she is signing a deed, but she is deceived into doing so by reliance on a misrepresentation of material fact. VOIDABLE.
226
Teacher says to the lawyer, "this is a deed for the farmer. Will you give him when I die? and says, "Please keep it handy, just in case I want it back."
She did not intent to place deed beyond her control & She still reserved the right to retract the deed.
Doesn't work.
No delivery
227
Deed poll
a deed that signed by the grantor but not by the grantee.
228
The farmer NOT signed the deed himself:
Even so, he is bound by the no fencing condition. (Deed poll).
229
Quitclaim deed
includs no covenants of title; it simply conveys whatever interest the grantor has in the property; if any; with no guarantees.
230
Special Warranty deed
typically includes all 6 covenants of title: deed only warrants against defects created by the grantor; not defects created by previous owners.
231
General Warranty deed
includes all 6 covenants, however, it warrants against defects created by anyone, including any previous owner.
232
Title covenants
Expressly written in a deed or incorporated by law.
233
State statute:
define a warranty deed to include certain covenants; whether they spell out in the document. The grantor and grantee can negotiate on what kind of deed they can provide.
234
6 covenants
Seison, The right to convey; the covenant against encumbrances, quiet enjoyment, warranty, further assurances.
235
Present covenants
Seison, right to convey, and covenant against encumbrances: breached only at the moment when seller conveys to the buyer;
236
Future covenants
Quiet enjoyment, warranty, and further assurances: can be breached after the conveyance.
237
Covenant of seisin:
promises that the grantor actually owns the property that the deed purports to convey
238
Covenant of right to convey
promises the grantor has the legal authority to transfer the property
239
Covenant of Right to Convey
promises that the grantor has the legal authority to transfer the property.
240
In modern property;
seisin, and right to convey are functionally identical.
241
Covenants against encumbrances
promises that there are no encumbrances on the property except those identified in the deed.
242
Some courts:
open and visible encumbrances don't breach this covenant, even if they are not in the deed.
243
Many courts:
a grantee's mere knowledge of an encumbrance does not waive the covenant.
244
Future covenant- Covenant of Quiet Enjoyment
promises that no one with superior title will interfere with the grantee's possession and enjoyment of the property.
245
Future Covenant: Covenant of Warranty
Promises that the grantor will defend and indemnify the grantee against claims by anyone with superior title.
246
Future Covenant: Covenant of Quiet Enjoyment and Covenant of Warranty
functionally identical.
247
Covenant of Further Assurances
promises that the grantor will take any steps that are reasonably necessary to perfect the grantee's title; e.g., executing an appropriate document.
248
Future covenant is breached
only if someone with superior title actually interferes with the grantee's possession or enjoyment by asserting a valid claim to any part of the property.
249
Grantee
must suffer 1) actual eviction and 2) constructive eviction to argue breach.
250
Actual eviction
if the grantee is lawfully dispossessed of some or all of the property by someone with superior title.
251
Constructive eviction
involves some infringement of the grantee's use and enjoyment short of dispossession. even if the grantee is not wholly dispossessed.
252
For example, the lady says, "I am suing to enforce the easement,"
The grantee is constructively evicted.
253
Eviction requirement
a potential claim against the grantee's title that is never actually asserted does not breach the future covenants.
254
Future covenants are limited
to valid claims of superior title.
255
A grantor has
no obligation to defend the grantee against invalid or frivolous claims.
256
Title covenants apply to matters affecting title;
title covenants don't apply to every problem that might arise with property. e.x., physical condition of the property; or problems with highway access; are not covered by the title covenants. because those problems are unrelated to the title.
257
The grantee can ask breach of
ANY covenant in his title. The grantor is liable for damages.
258
Remote grantees:
grantees who come later in the chain of ownership.
259
Remote grantees: present covenants:
Most courts don't allow a remote grantee to sue a remote grantor for breach of present covenant.
260
Future covenants runs with the land.
most courts, remote grantees can enforce them against any grantors in the chain of title who were bound by the future covenants.
261
Damages for breach fo title covenant
limited to the purchase price that the grantee paid (with interest).
262
Brokers
can fill out the standard, form based contracts.
263
Broker is seller's agent
there is a fiduciary duties towards the seller. E.g., brother must work diligently and must deliver the best interest. Avoid CoI.
264
Broker that failed to disclose CoI
liable for damages, and/or forfeit her commission.
265
Seller & Broker
listing agreement.
266
Listing agreement
specified length of broker's engagement (listing period) plus broker's commission.
267
3 types:
1. Exclusive right to sell agreements, 2. Exclusive agency agreement, 3. Open listing agreements.
268
Exclusive right to sell agreements:
The broker earns commission if property sells during listing period (no matter who finds it).
269
Exclusive agent agreements
provide the broker will be the seller's only agent for the sale. Broker earns commission if anyone except seller finds buyer during listing period.
270
Open listing agreement gives
the broker non exclusive right to sell the property. Broker earns commission only if broker finds buyer during isting period.
271
If the broker is procuring the cause of the sale:
the broker found the buyer.
272
Procuring cause:
sale that would not have occurred without broker's involvement.
273
When a broker has earned the commission?
The seller and the broker entered the agreement regarding the listing of the house.
274
If listing agreement does not specify when the commission owed:
The broker found the buyer and the seller entered K; but the buyer changed her mind: doesn't matter. Broker gets commission. YES.
275
Broker's commission:
entitled to producing buyer who is ready, willing, and able to buy. Either on the terms in the listing agreement; or On other terms acceptable to the seller.
276
Broker is deemed to produce the buyer;
when the buyer and the seller entered sales contract: even if the buyer backed out in closing: the broker it entitled to commission.
277
The seller said, $300,000. The buyer offers $295,000. The seller accepted. They entered the sale contract.
Broker gets commission. because it is acceptable to the seller.
278
What if the buyer offered $1 less than the listing price? Can the seller say no?
The seller can say no. because the seller is not required to explain to broker why he rejected such an offer. If seller acts arbitrarily or in bad faith the seller liable for commission if he rejects a ready, willing, and able buyer who can meet seller's terms.
279
Fair Housing Act:
prohibits discrimination in the sale or rental of any dwelling based on race, color, religion, sex, familial status, national origin, or disability.
280
The FHA prohibits,
refusing to sell, or rent to someone upon receiving bona fide offer; discriminating in terms, conditions, services, or privileges of sale or rental; adveertising any preference or limitation regarding renters or purchasers, misrepresenting availability of any dwelling for inspection, rental, or purchase, refusing to permit reasonable accommodations for occupatns' disability, e.g., allowing modificatin of dwelling at occupatn's expense.
281
Mrs. Murphys' rule:
FHA Exemption:
Sale or rental of single family home by private owner; without broker (그러나 그러한 광고는 안 되는 것으로)
282
FHA Exemption
LL who own no more than 3 single family dwelling, LL of owner occupies apartment buildings with 4 or fewer units., religious groups. (이러한 경우도 광고는 안 되는 것으로)
283
Violation of Act
Engaging in disparate treatment, actions that produce disparate impact.
284
Disparate treatment (이질적인 부분들 사람들로 이루어진)
Intentionally discriminating against members of a protected class.
E.g., If landlord says, "I only rent to US citizens," --> disparate treatment based on national origin.
285
Disparate impact
occurs if a facially nondiscriminatory practice has the effect of disadvantaging member of a protected class more than others; even if not intended.
286
e.g., LL, "only for English Speaking Tenants." XXX
This policy does not facially discriminatory but its effect of disadvantaging non English speakers more than others: effect based on national origin. --> Disparate impact.
287
Waiver of Fair housing protections
1. knowling, 2. voluntary. --> The person does not waive fair housing rights merely by signing it that includes the discriminatory provision.
288
Sales Contract
1. Must be in writing, 2. Must be signed by the party against whom enforcement is sought, 3. Must contain the agreement's essential terms.
289
Essential terms of enforceable real estate sales contract:
1. Parties identifies, 2. Words indicating parties intent to buy or sell, 3. Adequate description of property, and 4. Purchase price.
290
Real Estate Sales contract: Signature requirement,
anything that reflects a party's intent to authenticate the writing; e.g., monograph signature, or name typed email.
291
Property description:
must be specific enough to distinguish the land being conveyed from any other real property.
292
Purchase price;
it may be stated as a total amount or as a per acre price.
293
Anything that lacks any element: (in writing, 2. must be signed by the party against whom enforcement is sought, 3. must contain the agreements essential terms;
Unenforceable.
294
Executory period
Between K formation & Closing (buyer pays the seller and the seller delivers the deed.)
295
Real Estate Sales Contract
may or may not specify the closing date.
296
If Contract does not specify closing date but still;;;;;;
unless contract specify otherwise, time is not of essence and parties have reasonable time to perform or enforce.
297
One exception to the SoF: is Part Performance
enforces a verbal sales agreement if the buyer takes certain steps explanable only by a contract rather than another type of relationship.
298
Part performance (SoF exception)
enforces a verbal sales agreement if the buyer takes certain steps explanable only by a contract rather than another type of relationship.
299
Has the buyer done at least two of the following (Part performance)
1. Taken possession of the property; 2. Paid all of the purchase price, 3. Made substantial improvements to the property. --> unless, they are just sales contract.
300
Part performance:
they did not write, just orally agreed, but if parties: say, "We agree;" and "Fully performed," then, ok, SoF exception
301
Remedies for breach (sales contract)
1. Specific performance, 2. Rescission and restitution, or 3. Damages.
302
Liquidated Damages Clause
The seller is allowed to retain the buyer's deposit as liquidated damages.
303
Liquidated damages clause enforceable
if the liquidated amount is reasonable given the transaction and actual losses.
304
Liquidated damages clause unenforceable
if it appears to be a penalty instead of reasonable compensation.
305
Options to buy
might appear as part of a deed. Contract in which optionor gives optionee exclusive right to buy optioner's property.
306
Right of first refusal
might appear as part of a deed.
307
Option agreement
price + expiration date.
308
After option agreement, the optionee can exercise his option:
notifying the optionor that he wants to buy on terms in option agreement --> Sales Contract. If the optionee offers different terms, then, this is a counter offer, not an option exercise,
309
Right of first refusal
Contract that gives the holder of the right to buy the property at a specified price if the owner decides to sell within a certain time period.
Preemptive right: allows the holder to preemptive sale to the 3rd party.
310
Right of First Refusal Agreement- PRICE
Fair market value at time of purchase.
Price seller is willing to accept from 3rd party;
May be enforceable in court.
311
Both option to buy & right of first refusal
Subject to Rule against Perpetuities.
312
Sales or Property Contracts
Seller might have a duty to make certain disclosures about the property's physical condition.
313
CL: Caveat emptor (let the buyer beware)
a seller - in arms' length transaction - has no duty to disclose known defects if buyer had opportunity to inspect.
- Governs most sale of commercial property.
314
Modern: Disclosing material defects
requires seller of residential property to disclose known material defects that buyer can't reasonably discover.
-Some states requires seller to disclose all known defects.
315
Duty of disclosure exists
-applies only to defects known to the seller;
-doesn't apply to those defects of which seller is unaware.
316
"The house is being "AS IS."
Disclaimer: must be clear, and specific; to be effective.
317
Implied Warranty of Quality and Workmanship on the sale of new houses
by Builders, developers, and anyone else in the business of selling new construction;
318
Implied warranty of fitness or of habitability
1. seller guarantees that house was built in careful, workmanlike manner and is fit for habitation.
2. Is breached by any substantial defect buyer couldn't reasonably have discovered before sale.
319
Implied warranty of habitability -
also in Landlord Tenant Law.
320
A few courts have held that
only the original buyer may invoke this implied warranty; but most allow subsequent purchasers to bring warranty claims for a reasonable time after the original sale.
321
Doctrine of Merger
When seller delivers deed to buyer, sales contract merges into deed.
322
Any contractual guarantees about title disappear once merger.
Buyers' remedies for title problems are limited to the covenants of title contained in deed.
323
Merger
only applies to matters affecting title; it does not apply to other matters like property's physical condition.
324
Mortgagor a grocer is free to sell
the Mortgaged property unless the mortgage agreement provides otherwise.
325
Mortgage prohibits a sale
Mortgagor a grocer sells anyway, mortgagor's violation has no effect on buyer's ownership. But the bank might have a claim against mortgagor for breach of contract.
326
Due on Sale
Acceleration Clause
327
Acceleration clause
If mortgagor sells or otherwise transfers mortgaged property, mortgagee may declare entire underlying debt to be due and payable. Alternatively, mortgagee may choose not to invoke the clause.
328
Due on Sale
Any transfer of the property will trigger acceleration.
1. Conveyance by deed,
2. Sale under an installment contract.
329
Sale or other transfer of mortgaged property
does not automatically remove mortgage nor does not automatically satisfy underlying debt.If property
330
is subject to mortage at time of sale;
1. Seller pays off the mortgage in connection with sale using buyer's purchase money.
2. Buyer takes the property subject to the mortgage,
3. Buyer agrees to assume the debt underlying the mortgage.
331
Payoff by seller
1. required if mortgagee invoked due on sale clause.
2. needed to deliver marketable title to buyer because mortage is encumbrance that makes title unmarketable.
332
A mortgage or other lien that's satisfied from the sale proceeds does not affect marketablility
because it will not encumber the buyer's ownership.
333
The buyer agrees to take the property subject to the mortgage but without assuming underlying debt.
The seller must continue to make the mortgage payments, mortgage will remain in effect even though the buyer now owns the land. So if the seller defaults on the debt, mortgagee may foreclose on the property. Then, it is buyer's responsibility on the house. The seller 's responsibility is deficiency the seller alone.
334
If the buyer assumes the underlying debt
1. Mortgage remains on the proeprty and buyer becomes personally and primarily liable for the debt.
2. Seller remains secondarily liable on the debt unless mortgage agrees novation. Which releases the seller and places all personal liability to a buyer.
335
Assumption of the debt
requires buyer's express agreement; contained in a stand alone document or accepting a deed that includes provisions about assuming the debt.
336
Buyer might implicitly assume the debt
if the purchase price is discounted to the mortgage balance. --> would receive a windfall if he could both get a discount and avoid the debt.
337
If the builder (buyer) missed 3 payments, and the farmer (grocer, seller) made the missings, then,
The farmer can recover payments from the builder. The farmer in this situation acted as a surety for the debt. Having made several payments as surity, the farmer can recover those payments from the debtor.
338
Equity of redemption
after default.
Mortgagor's common law, equitable right to avoid foreclosure by paying remaining mortage debt before the foreclosure sale.
339
Concurrently Owned Property
cotenant might mortgage only her own property interest.
340
Cotenant
can redeem her interest by paying the mortage balance.
341
If a mortgage attaches to all cotenant's interest
cotenant can't redeem her own interest separately from the others. There is no such thing as partial redemption. To redeem the property, one or more tenants have to pay the entire debt.
342
Statutory redemption
Mortagor can regain the property after foreclosure sale
343
Statutory redemption
gives the mortaggor a period of time after the foreclosure sale to redeem the property (auction)
Statutory right, not CL right.
344
To redeem, the mortgagor must pay foreclosure sale price, plus, interest and costs, to the foreclosure buyer.
Most mortgagor remains in possession until redemption period expires.
345
After foreclosure sale,
proceeds to satisfy: foreclosed mortgages, and other liens too... then, what is the priority?
346
First in time rule
a given lien has priority over an liens that arise later.
If recording act applies, then, time of recording might determine priority instead.
347
1. PMM:, 2. Future advance mortgages: mandatory disbursements take priority over intervening liens.
3. Optional disbursements; junior to any intervening liens only if the future advance lender made the disbursements with notice of those liens.
348
Liens that are senior to the foreclosing mortgage are
unaffected by foreclosure.
349
foreclosure buyer will take the property
subject to all senior interests.
350
Effect of foreclosure on a junior lien
whether it made a part of the foreclosure process.
351
If the junior lienholder is joined in the foreclosure case, or notified of the sale; then,
the junior lien is extinguished, but not the underlying debt. because junior lien has opportunity to beat at the foreclosure sale or act to protect its interest.
352
Once a junior lien is extinguished, it can't be reinstated
even if the defaulting mortgagor later repurchases the property.
353
If the junior lienholder is not notified or joined,
the junior lien survives and will continue to encumber property.
354
Once sales are complete, and appropriate liens are extinguished,
the proceeds are distributed in priority.
355
Senior lien paid in full
before junior lien paid.
356
1. Cost of foreclosure sale,
2. Mortgage being foreclosed,
357
3. All junior mortgages or other liens,
4. Beggar.... Still, if the debt remains, it is "Deficiency."
358
Mortgagee can sue the mortgagor for
deficiency judgment for this debt.
359
EX. 1 Mortgage to bank: $200K. 2. Credit union: $75K.
The bank foreclosed, and join the credit union as a party; then, both mortgages were extinguished. allowing the buyer to take free of encumbrances. --> Proceeds?
360
1. $5000 Fees and Court cost, 2. $200K bank mortgage
3. $45K credit union, although the 2nd mortgage extinguished, the underlying debt remained.
361
4. Farmer still owed the credit union $30 K.
no money
362
Rule of Marshalling can affect foreclosure... Mortgagor has 2 properties.
1st: house: mortgaged to a bank.
2nd: house: first mortage in bank's favor; second mortgage in credit union's favor. then,
all three mortgages are in default.
363
2 funds rule of marshalling says,
If the senior creditor can foreclose on 2 properties of same debtor, and junior creditor can foreclose on only one of the properties, then a court in equity may order senior creditor to proceed first against the property to which the junior creditor lacks access.
364
The bank first, could have been foreclosed the first property
Before foreclosing on the second. this rule protects the junior credit to require the senior creditor to exhaust other assets before proceeding properties.
365
Lease agreement says, The farmer can repurchase the farm for $1 if he makes all 36 monthly payments on time.
The businesswoman tried to evict him because farmer missed one payment. Can the farmer claim the foreclosure protection? YES.
366
Equitable mortage
if a transaction involving real property is intended to secure a debt.
Mortgage debtor entitled to foreclosure procedures and other debtor protections.
367
Identifying an equitable mortgage;
1. whether debtor keeps possession of property;
2. whether debtor acutely needs money at the time
3. Whether the transaction allows debtor to reclaim or repurchase property after making some payment.
4. Relationship btw amounts paid to and repaid by debtor,
5. Whether debtor sells property for less than its FMV.
368
Sale and leaseback arrangement
equitable mortgage
-Farmer needed money to equipment.
- he sold the farm for only 1/3 of MV.
he received 30K (principal)+ 6K (interest)
-The farmer can repurchase the farm for $1 if he makes all 36 monthly payments on time.
CT says, Transaciton is a $300 K loan to secure the farm. ... Less than a FMV.
369
Deed of trust
security deed.
Debtor executes a deed conveying property to 3rd party trustee, who holds property in trust for creditor to secure repayment.
370
Deed of trust: debtor keeps possession of property, if debtor defaults,
Trustee can sell property to satisfy debt.
371
Absolute conveyance
without trustee. Resembles deeds of trusts.
372
Absolute conveyance
debtor gives creditor a deed to the property.
373
Deed of Trust
Creditor agrees to sell property back when debt is paid. If debtor defaults, creditor keeps property.
374
Installment land contracts
contracts for deed.
375
Installment land contracts
buyer takes possession and remits purchase price in a series of installments.
376
Installment land contract
Seller retains title until the price is fully paid.
Contract later specifies that late or missed payments are a breach fo the contracts.
377
Historically, if buyer breached, seller could rescind contract, evict buyer, and retake without foreclosure.
CL allowed seller to keep all of buyer's previous payments even if the buyer paid most of the price.
378
Installment land contracts
mortages.
If buyer breaches, seller may keep payments only to extend reasonably related to sellers' damages.
Any payments beyond that amount must be refunded to the buyer.
379
Deed in lieu of foreclosure
does not impact mortgage,
affect mortgage enforcement.
a mortgagor facing default or foreclosrue is allowed but not required to tender a deed to the mortgagee.
380
Ct considers deed in lieu of foreclosure is not
coercion or taking advantages of mortgagor.
OR
If property is a way more worth; than the remaining debt.
381
Mortgage is evidence
that secures debt. Debt is evidenced by the promissory note.
382
Mortgagee is free to
transfer or assign its rights under the note and the mortage.
383
Mortgage assignment rules 2
1. Mortgage follows the debt. If the mortagee assigns the note alone, then the mortgage is automatically assigned along with it.
384
Mortgage assignment rules 2
2. The mortage has no validity apart from the debt. Assignment without the note is void.
385
E.G. Businesswoman can transfer the note; and the mortgage lien follows
not permistted: is that, the business woman cannot tranfer only the lien, while, keeping the note, for herslef.
386
Easement implied use of (MEE)
1. Servient tenement is reasonably necessary to enjoy dominant parcel
2. 2 Parties intention to use continues after division of property.
387
Easement appurtenant
2 parcels of the land - Dominant, and Servient.
388
Implied use of the easement: Reasonably necessary: degree:
Court thinks difficulty of using the alternatives.
389
Adverse Possession
transfers title of property under certain conditions. 1. Possessor must physically enter the property
2. Possessor must use it as a reasonable owner would.
390
Continuous use
occurs without substantial interruption, or if the advers possessor uses the property consistently.
391
Hostile possession under a claim of right
AP uses the land without owner's permission.
392
AP must be
deliberately hostile to the owner's right or must sincerely believe that the advers possessor owns the land.
393
The farmer acted without the teachers' permission
Hostile possession: AP uses the land without owner's permission.
394
Open and notorious
The adverse use must be visible upon reasonable inspection.
395
Exclusive
AP need not be the only person on the land, but he must use it in a way that's incompatible with the owner's rights.
396
Fulfillment of AP:
couldn't return the point to the teacher apologizing, would have to formally transfer the property by deed.
397
Tacking
add previous user's possession time if the users are in privity. (Farmer 8 years + Sister 2 years = 10 ok.
398
AP
takes only whatever title original owner had. e.g., drainage easement: subject to drainage easement.
399
AP
applies only o whatever portion of someone's property the adverse possessor uses
400
Under color of title:
AP: adverse claim can extend to the entire tract described in the purported title.
401
Multiple AP acts in concert:
1/4, 1/4, 1/4, and 1/4. Title: equal shares. Tenancy in Common.A
402
Asserting authority to lease property
"your rent is due." --> AP gets the rent. by acting like the owner. yes,
403
Equitable conversion
buyer gets equitable title, seller has equitable right to receive purchase money.
Seller's right is deemed to be personal property. not real property.
404
After sister died, the personal representative (sister)
inherited her personal property, so sis was entitle to the sale proceeds.
405
Teacher out of 52, left the will: 50 to bro, 2 to my sister.
Teacher sold 50 to the 3rd party for 1 million.
406
Specific devise:
arises when testator leaves particular, identified parcel of real property to a specified beneficiary; if that property isn't in testator's estate upon her death, then that gift is adeemed.
407
Adeemed, ademption
to revoke or to satisfy it by some other gift. 유증철회.
408
Teacher's brother (50 ) --> sold it before she died.
Gift was adeemed and bro takes nothing.
409
Teacher's sister: left all
left all real and personal property. (2 acre tract, and $)
410
Eg 2. Teacher's will, "I leave all my property to my nieces and nephews."
CL: if a devisee predeceases the testator, then the gift to that devisee lapses.
That class closed upon teacher's death because the gift to the nephew has been lapsed.The only remaining class members are 2 nieces. Nephew's 2 children gets nothing.
411
Antilapse statute
prevents lapses unless the will states otherwise.
Preserve gifts to beneficiaries who have a specified familial relationship to the testator;
Gift passes to the beneficiary's lineal descendants.
--> nephews children.
412
Assume State A: teacher left will, State B: teacher died, State C: property exists.: If disputes, which state laws applies?
Situs Rule
413
Situs rule
State C. The property is located in State C.
414
Implied warranty of marketability
the seller's promise to deliver the marketable title at the closing. Every sale contract, unless explicitly states otherwise.
415
Marketable title:
one that reasonably prudent buyer would accept or one reasonably free from doubt, and free of encumbrances that might interfere with possession.
- No 3rd party interest that might interfere the buyer's right of possession.
416
Encumbrances
any interests or claims in the property; held by anyone other than the buyer that affect the property's use or value.
E.g.,
-Mortgages,
-easements,
-restrictive covenants, and
-uncertainties about the quality of title (defective deeds or gaps in title history.)
- Future interests
-Zoning violations, but not zoning laws itself.
- risks of title related litigation.
417
Marketable title
doesn't have to be perfect.
- trivial defects, or remote possibilities of litigation: are ok.
418
Buyers may agree to accept title subject to specific encumbrances.
If the buyer does so, those encumbrances won't count against marketability.
Written encumbrances in K: Buyer expressly agrees to buy subject to those encumbrances.
419
Open, obvious easements:
Powerline, highways --> don't affect marketability.
420
If a seller fails to deliver marketable title, the buyer holds seller in breach; or buyer accepts title anyway-->
if Buyer accepts anyhow, then, no breach occurred.
421
Time to deliver marketable title
-Seller must deliver marketable title at the closing (not before closing).
-Buyer who discovers encumbrances must give seller chance to remove it by closing unless it appears unlikely or impossible.
422
Buyer agreed the sale contract without agreeing to accept any encumbrances;
before closing the buyer discovered tax lien on the property. Seller was not aware.
423
Then, buyer has to notify the seller of the lien.
and allow him the reasonable time to remove it before closing.
424
Installment contract
The buyer agrees to make a series of payments to the seller before the closing takes place and title passes.
425
In installment contract; if the buyer discloses the seller a problem of title, then,
the buyer should give a reasonable time to correct the problem before closing.
426
Seller can sign a valid sale contract even if they don't yet own the property
if they acquire property within reasonable time.--> Enforceable K.
427
Equitable conversion = executory period
1. Buyer is equitable owner of proeprty during executory period. (Interest in real property).
2. Seller is equitable right to be paid the purchase price, secured by equitable lien. (Personal property)
428
Effect on Title
Buyer is equitable owner, but hasn't paid yet.
Seller retains bare legal title.
429
Seller holds bare legal title in trust to be delivered at closing.
Buyer exchanges payment and adds legal title to equitable ownership.
430
Risk of loss: distribute? during executory period
Unless Contract, law steps in.
- Buyer (majority): even if the property is damaged or destroyed before purchase, the buyer must pay the full price.
431
If the seller receives an insurance payment for the damage,
the buyer is entitled to a credit in that amount.
432
Abatement (seller bears the risk of loss)
Minority states.
433
Uniform Vendor and Purchaser Act (UVPA)
places the risk of loss on whatever party possesses the property during the executory period.
434
During the executory period:
the house was struck by lightening, $100K damage:
- Major: Buyer pays.
- Minor: Seller pays. allow buyer to rescind the contract, or abatement (and convey the property).
435
Equitable conversion:
insurable interest: but no affirmative duty to insure property during executory period.
436
House
to secure the loan: Mortgage.
437
Debt
is evidenced by promissory note.
- Whoever signs the note is personally liable for the debt.
438
Debtor and mortgagor
are usually the same person; but they don't have to be.
439
Sister mortgaged her house to secure her bro's debt.
The sister has no personal liability for the debt because she did not sign the note.
But if the grocer defaults, the bank can foreclose the sister's house.
Any debt remaining is the grocer's personal responbility.
440
Technically,
Promissory note + Mortgage lien = mortgage.
441
Installment contract
can be mortgages (monthly payments). Buyer pays the seller over time.
442
Prepayment
can deprive the mortgagee of future interest payments. The mortgagor has no right to prepay unless the mortgage says otherwise.
443
Mortgage clauses prepayment forbidden:
enforceable.
444
Financial prepayment penalty (reasonable)
Enforceable.
445
Lien theory
a mortgage confers a security interest in the property with no change in title.
446
Title theory
a mortgage gives the mortgagee title to the property until the debt is paid.
447
Priority: installment contract
1. Senior lien (lien with priority over another)
2. Junior lien (lien with lower priority).
448
First in time rule:
a given lien is senior to liens that arise later and junior to liens that arose earlier.
449
Judgement lien has priority because
judgement lien arose first.
450
PMM
provides the money to buy the proeprty and has priority over any preexisting liens that arise through the mortgagor.
451
here, the house was PMM.
Mortgage of a house has a priority over the judgment lien.
452
Future advance mortgage
Initial distribution + per month * 5 months = 1 million. (mandatory)
453
if the grocer took out the second mortgage, credit union, after two disbursement from the bank,
whether it is mandatory disbursements.
454
First in time rule + Future advance mortgages
if the future advance lender is required to make the periodic disbursements (mandatory), then, the disbursements have the same priority as the initial distribution. = Bank has priority even though notice.
455
What if optional disbursement?
the priority depends on whether the bank had notice about the credit union. X
456
no notice of intervening lien
the future advance lender has priority as to the entire loan, just as if the disbursements were mandatory.
457
if there were notice of intervening lien,
all disbursements made after intervening lien are junior to that lien. Most juris require the future advance lender to have actual notice of intervening lien (no constructive, record notice)
458
Recording act can also affect
mortgage priority.
459
Grocer: 1. Bank, 2. Seller (defaulted) who has the priority?
Bank. because Bank secured the house as a mortgage, seller did not.
Secured debt has a priority over unsecured debt.
460
RAP
No interest in property is valid unless it must vest; or forever fail to vest; within 21 years after the end of some life in being when the interest is created.
461
Property interest VOID
When there is any possibility that it could vest longer than 21 years after all relevant lives in being when the interest is created.
462
RAP
does not apply to vested interests, no interest in property is valid unless it must vest.
463
"to the builder in fee simple, but to my daughter if she gets married."
Daughter: executory interest. Daughter's life: measuring life; by the time of her death; for sure; it is sure that the property interest is vested or not.
--> RAP OK.
464
"the banker, plus his heir and assigns, gran the builder, plus his heirs an dassigns, a right of first refusal to buy the land if the banker, his heirs, or his assigns, ever sell it."
Right of first refusal: becomes vested. It is because right could be vested more than 21 years after any conceivable measuring life.
When his heirs, assigns, and builders, has assigned to sell it--> then, it can happen 200 years later.
465
Wait and see rule
preserves an interest that would otherwise violate the rule either until it vests or until the perpetuities period expires; whichever comes first.
466
Cy pres
as near as possible.
If interest would violate the rule, Ct rewrites the conveyance to comply with the rule while capturing the grantor's intent as closely as possible.
467
"Conveyance to a grantee for life, then to the 1st of the grantee's children to turn 25."
The court will approximating to 21. to approximate grantor's intent.
468
Cy pres
can preserve charitable trust. if the trusts's specified charitable purposes can no longer be fulfilled.
1. Settlor has expressed general charitable intent; then, the court may use cy pres to determine another charitable use.
2. Settlor's intent is specific. "to benefit the particular charity," then, cy pres wont apply.
469
Fixture
an item of personal property that has been attached or annexed to real property with the intent to make the chattel part of the property.
470
Annexed
physically incorporate into a structure; removing it would damage the realty.
471
The party who annexes chattel must
intend to make a permanent accession to realty or to another fixture on realty.
472
Evaluating intent:
the court must consider all cir.
1. nature, use of chattel,
2. relationship between the use of the chattel and the use of the realty,
3. relation to the annexing party to the realty.
--> intent.
473
If the life tenant intend to make hot tub permanent part;
the hot tub becomes a part of the property;
personal representative may not remove it.
474
tenant lacked intent to make hot tub a permanent part of the house;
personal rep may remove it.
475
fixtures in LL & T
Trade fixture.
Tenant annexes to the realty during the lease term.
A chattle annexed to the land by T to carry on a trade or a business.
The tenant can remove trade fixtures;
LL succeeds to ownership of all trade fixtures that tenant fails to remove by the lease's end.
476
Tenants in Common can transfer their interest with
Deed of conveyance
477
TiC
can Mortgage, sell, licensee access, etc.
478
Ouster
when you kick someone out who is entitled to be in possession of the property.
479
Eviction
someone who has not entitled to possession.
480
Limit right of partition
restraint on alienation.
481
Joint Tenancy terminated by
SPM: Sale, Partition, and Mortgage.
482
Tenancy in Common terminated by
Mortgage, Ouster, Death, and Partition (MODP)
483
Tenancy for years
specified time; A leases to B from April 20th to April 21st OK.
484
Tenancy that is uncertain duration, and greater than one year
Statute of Fraud; should be in writing.
485
Periodic Tenancy
for a fixed period of time which then repeats unless a party terminates the lease by giving notice. usually, written notice; equal one lease period.
486
Periodic tenancy is created by
implication.
487
3 situation Periodic Tenancy by Implication
1. tenant just starts to pay the rent month to month.
488
3 situation Periodic Tenancy by Implication
2. If there is term of years; and it violates the statute of frauds;
489
3 situation Periodic Tenancy by Implication
3. Holdover tenant + niceguy landlord --> if a tenant stays in their rental unit beyond the stated lease date; they are holdover tenant; if landlord allows them to stay on, the new rent is measured by the way they are now doing it.
490
Periodic tenancies are automatically renewed
until there is notice of termination.
491
Notice of termination in periodic tenancy
AT LEAST one period in advance; or you have to continue to pay the rent.
492
Tenancy at will last
as long as the landlord and tenant will that it lasts. It has no fixed duration.
493
Either party can terminate the lease at any time
by giving notice to the other party. (Tenancy at will). Notice of termination immediately effective upon receipt unless it states a future termination.
494
Payment of regular rent
will give rise to an implied periodic tenancy.
495
Tenancy at sufference
holdover tenant.
Causing the landlord to suffer.
496
Implied covenant of quiet enjoyment (between LL and T).
both residential & commercial.
LL violates when 1) actual wrongful eviction; 2) breach by constructive eviction.
497
Breach by constructive eviction (LL)
1. failure to make necessary repairs,
2. Harass tenant, making threats, entering the premises without permission
3. Interference with essential services like water, laundry, and parking.
498
Constructive eviction; Tenant must prove SING
1. Substantial, 2. Interference (action or failure to act) 3. Notice must be within reasonable time, 4. Goodbye (Tenant must vacate) - If tenant stays for 6 months; it is a waiver of their consturctive eviction rights.
499
LL is not liable for the act of the 3rd party.
Also, LL is not liable for the acts of other tenants. LL has duty not to allow nuisance (gambling etc) and also duty to control the common areas.
500
Implied warranty of habitability
only residential. Minimal living requirements must be met in all residential leases. Plumbing, running water, heat in the winter, etc. Nonwaivable.
501
Breach of implied warranty of habitability remedies:
1. Move out and terminate the lease.
2. Repair and deduct.
3. Reduce their rent or withhold all of the rent until Ct decides Fair Rental Value.
4. Remain possession and pay rent then affirmatively sue for cash money damages.
502
Protected activities against retaliatory eviction
1 complaining about defects
2 asserting that the ll failed to keep the premises in a habitable condition.
503
LL is barred from penalizing the tenant by either
1. Ending the lease.
2. Raising their rent,
3. Harassing the,
4. Or just fucking with them.
504
Eviction is retaliatory if
it happens within 6 months of tenant brining a claim for a non habitable lease or a withholding of rent by the tenant for a legit reason. BOP is on the landlord to show eviction was not retaliatory.
505
Privity of estate
someone who has the reversionary interest if you fuck up your rent obligations.
506
Nonpayment of rent:
landlord can sue assignee under privity of estate. If the assignee stops payment, the property will REVERT back to ll since The assignor (T1 ) signed off his whole interest in it.
507
Assignment LL to Assignee
they are liable to each other for all covenants in the original lease, that runs with the land; promise to pay rent, pay taxes, promise to repair or paint the premises.
508
There is no privity of contract between LL and Assignee unless
Assignee assumes the contract of the Assignor.
509
There is no privity of estate but privity of contract between LL and Assignor
They signed a contract, but Assignor no longer has any interest in the land and Assignor will not get the land kicked back to him if Assignee doesn't pay the rent .
510
Sublease
giving only part of their interest to a new tenant; some time left over under the lease.
511
Vertical privity
Wholesale Costco
512
Horizontal Privity
1. Instantaneously when a land transfer includes convenant or
2. When we have a promise related to a simultaneous interest of 2 landowners; e.g., easements that run across 2 parcels, a promise to paint the fence.
513
Horizontal privity
Only burden. It either exists or doesn't exist the moment the covenant is entered into.
514
Horizontal privity
The covenant is in the deed.
515
Instantaneous horizontal privity
"here is a covenant in the deed: you promise me you will not go in the bottom play area."
Instantaneous transfer.
516
Horizontal privity
2. Simultaneous interest in land and make a little promise related to that simultaneous interest.
e.g., "easement: with a fence." "you will repair and maintain the easement and fix up the common fence on the easement."
517
Horizontal privity
no random neighbor rule.
518
Inquiry notice
when you look at the land and you see that it is burdened by a covenant.
Most Cts would say that someone should infer that if you saw SHITS you should reason that the lots were restricted. E.G. "Could you infer that it was not allowed to have satellite TV dishes." "you didn't see any motorcycles in the garages."--> Would this allow you to infer that motorcycles were not allowed? How you can infer from absence?
519
Covenants can be terminated by
1. Merger.
2. Abandonment or Estoppel
3. Eminent domain.
520
Horizontal Privity
WITH-N (Burden)
521
Vertical Privity
WIT- V. (Benefit)
522
Equitable servitude
WIT-N.
523
Equitable servitude can be terminated by
1. Release by a party
2. Abandonment or estoppel
3. Merger,
4. Purpose of the servitude no longer existing.
5. Condemnation by Uncle Sam.
524
Implied equitable servitude
common plan subdivision
If the developer subdivides land and SOME of the deeds contain negative covenants, while others do not, the negative covenants are then binding on ALL of the plots of LAND.
Even the ones where the deed did not say shit about a negative covenant.
525
Common Scheme
Covenants are in the original sub plot deeds.
526
Defense:
1. Change 2024.
2. Unclean hands: when the person seeking enforcement of a covenant is violating a similar restriction on their own land. "Don't paint your house blue, but they are indeed painting their house robins egg blue."
527
Creation of Easement
PING Pong.
Prescription, Implication, Necessity, Grant.
528
Easement by Grant
Statute of Fraud applies. Writing .
Express easement, we expressly grants it by words.
529
EG Grant
Owner 1 and 2 writes up "driveway" so he can get his car out. Writing in a deed. Include legal description of the servient land in it. To satisfy SoF, just write in the servient land.
530
Easement implied by prior use
ACR. Always Carry Raincoats.
Apparent, Continuous, Reasonable.
Emanuel:
1. Land severed from common ownership.
2. The use of the easement existed prior to this severance.
3. The easement was reasonably necessary to enjoyment of Lot 2.
531
Easement by necessity
1. Common ownership before severance.
2. at the time of severance, Landlocked.
3. Strict necessity (no other access).
532
Prescriptive easement
unlike express easement or implied prior use easement, it doesn't have K.
533
Prescriptive easement
OCAN.
1. Open and notorious.
2. Continuous. (not constant)
3. Actual. (not like I intent to use)
4. Non permissive. (from the owner).
534
Difference between Prescriptive Easement and AP
Prescriptive Easement: USE of the land.
AP: Possess the land.
535
License
personal privilege
536
Equity and fairness
prevent revoking license.
537
MEE Fixture
Annexation, Adaptation, and Intention. (AAI).
538
Intention
without intention, it is not fixture. Intention: the person did not intent to it to be fixture XXX
539
Tenant installation qualifies fixture?
If it is in K, it controls.
If K is silent, Substantial harm test: tenant can remove chattel as long as removal does not cause substnatial harm to the property.
540
Commercial tenant can remove
trade fixture. even if the lease does not allow to do so. as long as tenant materially does not damage the property.
541
Rule 2: trade fixture
1. Before the lease terminates, tenant removes.
2. Commercial tenant must restore to original condition.
542
Zoning
comprehensive master plan.
543
Zoning
different land uses should not be next to each other.
544
CTs are outright hostile to
spot zoning attempts.
545
Spot zoning (장점)
Beneficial public purpose.
546
Challenge zoning
no rational basis.
547
Conditional use permits
owners wants to use their landin a way that is not otherwise permitted within the zoning district.
548
Zoning board can impose
conditions (exactions) on the property owner that are designed to benefit the community; so long as these exactions are substantially related to a specific need or burden that the proeprty owner is creating with their building.
549
Conditional use permits
you can use your property for this even if it is not normally allowed.
550
Variances
you can build your property this way even if it is not normally allowed.
551
Variances
allow to vary from the zoning ordinances.
Show,
-1. Undue hardship essentially no effective use of the property can be made if the variance is denied; more than inconveniences.
(hardship: cannot be self inflicted; nor created).
-2. Hardship must be unique.
552
Prior Non conforming use
Grandfathered in. so it is allowed.
1. You can't intensify the use.
2. If your McDonalds burns down, you can't build new.
3. Nonconforming use can run with the land : (e.g., inheritance, etc.)
4. Continue to use as is.
553
Amortization
Cities can reasonably amortize the no conforming use to force it to stop at some point.
Gradual reduction.
Eventual shut down.
- Schedule:
1. Amount of your investment,
2. Degree of offensiveness of your use.
3. Balancing public interest v. Private and cost.
4. Nature of use.
554
Amortization
Substantial hardship. 4 points.
555
Deed of estoppel
after acquired title.
556
Mortgage
voluntary transfer of security interest in your land to secure a debt.
557
Mortgage
SHOULD BE in WRITING.
Should not require consideration. (underlying obligation is enough).
558
Right of redemption
mortgagor, grocer has the right to pay off the full mortgage at any time during the mortgage and own property free and clear.
It also gives the grocer the right to use and enjoy the property so long as the mortgagee obligations are met.
559
Can you mortgage your own land to secure the debt of another?
Yes
560
Purchase money mortgage (PMM)
funds are used directly to buy a home.
561
Recorded PMM have priority over
NON PMM, even for ones that were recorded before the PMM.
562
Any judgment properly filed shall be a lien on the real property
then owned or subsequently acquired by any person against whom the judgement is rendered.
563
Future Advance mortgage: mandatory
Mandatory payments with the mandatory triggering condition e.g., property being 50% done.
OK.
Then, all the new payments have the same priority as the original mortgage. (MEE essay 답과 같음)
564
When payments are mandatory,
the junior lien is junior to both the initial payment and future advance payment down the line.
565
Optional future advance
The junior lien lender has priority over amounts tranferred later on after the lien.
566
Installment contract
the sale of land where the buyer buys the land by making payments in installments over time and the seller keeps title until the last payment is made.
567
If the buyer fails to make an installment payment,
CL:buyer loses all past payments and have to fuck off.
now, Forfeiture clause. Time is of the essence,
Modern: seller is only allowed to keep the reasonable value of the rental value at the time the buyer lived there.
568
Installment K: if the buyer defaults;
Seller can sue for breach of contract, restitution, foreclosure, quiet title, or try to rescind K.
The seller can also Self help.
If seller defaults; buyer can sue
569
Absolute deed as security
equitable mortgage
570
Instead of mortgage on land,
Security interest
Rainbow asks for the deed itself with a writing,"after the loan is paid back, Goat can get the deed back for Gym."
"You give me the deed and I will give you $200,000. /You pay rent to me. Once you pay the full $200,000 back, I will give you the option to buy the deed back." "lease and option."
Selling he deed adn leasing it.
- Disguised mortgage.
571
Deed of trust
when the title is given to a 3rd party a trustee, to hold as security for a loan between a borrower and a lender. Upon default, trustee can sell it to satisfy debt.
572
Title theory (minority)
mortgage granted by one joint tenant severs the joint tenancy and it turns to Tenancy in Common.
573
Lien theory (majority)
if one joint tenant takes out a mortgage, it is only considered a lien and will not sever the joint tenancy.
Does not break up the unities. JT survives
574
Acceleration clauses
triggered by nonpayment of the mortgage but they are also triggered by failing to pay insurance premiums on the house. Your mortgage payments can be accelerated by failure to pay insurance if this is what the acceleration says.
575
Due on sale
creditor to demand full payment of a loan if the mortgagor transfers any interest in the property without the lender's consent.
576
Due on sale clauses
both valid and enforceable and they are not a restraint on alienation.
577
Deed in lieu of foreclosure
1. Transaction must be fair and equitable.
2. Deed must be effective immediately.
3. Junior lienholders are not cutoff, only the main mortgage. The borrower is still liable to junior lienholders after giving over the deed.
578
Special warranty deed (goat)
1. Grantor promises that they have the right to convey; (only to grantee) &
2. The property is free from encumbrances that arose when the grantor had a land or that were created by the grantor.
- The grantor will not defend title if the encumbrance or claim is about some shilt the old owner did before them.
Grantor says, "I own this, I can give it to you and when I was living there I did not do any weird shit to it like put an easement mortgage or lien on it."
579
Deed is void
forged, not delivered or fraud in the factum.
580
Deed is voidable
1. They were made by minors or incapacitated people.
2. Made through mistake.
3. Made through undue influence or
4. Fraud in the inducement makes it voidable.
581
Owner's policy covers heir and retroactive claims that arises later on with the 28101st buyer. BUT
they do not run with the land and cover friends and random subsequent buyers.
582
Present covenants
when the land is conveyed you can only sue the person who actually sold you the land at present covenants. NOT run with the land so people later on can't use.
583
Future covenants
protect the grantee from random shit that could happen in the future.
Run with the land. so a present owner can sue the person before the grantor if the earlier person causes the covenant to be broken.
584
Cov of seisin
promise that you are in possession of the land that you are sell.
585
Cov of Right to convey
a promise that you have a legal right to sell the land; if you are in possession you have a right to sell. if you are trustee, you don't own it but you have a right to sell.
586
Cov against encumbrances
there are no rights on the land held by third parties.
Easements cov, servitudes, mortages lients.C
587
Cov quiet enjoyment
breached by 1. Eviction by grantor 2. Someone screwing up with superior title.
588
Cov of Warranty
grantor will pay your legal costs if someone shows up with better title than you. Defend against them and shit.
589
Cov further assurances
a promise to make sure the title is always good. If defect, grantor will give you a new one. he will take care o flater discovered liens that spring up from 3rd parties.
590
Rule of Convenience: Class Gift
Unless a grant shows a contrary intent, a class closes when, any class member becomes eligible to receive a distribution.
Only persons who are actual class members at that time may participate in the class.
Persons who are not yet eligible to join the clas may not join it after that point and will not receive a share of the class gift. (Life ESTATER가 죽은 그 포인트에 살아 있던 자들만 받음)- 후에 태어나거나 그 포인트에 죽은 사람은 아님. 1명만 받으면 그 때 닫힘.
591
