Property Flashcards
(189 cards)
1
Q
What are the four different ways property can be transferred (i.e. alienated)?
A
- Sale
- Gift
- Devise - will
- Intestate Succession
2
Q
How are ownerships for estates in land divided?
A
Divided between present and future interests.
KEY distinction is timing of possession. (Who has the right to it now?)
3
Q
What is a fee simple?
A
Largest possessory estate because it is capable of lasting forever.
4
Q
How is a fee simple inherited?
A
upon owners death by will or intestate succession. Also transferred by gift or sale during owner’s life.
5
Q
How is a fee simple created?
A
“and his/her heirs” OR “X to Y”
6
Q
What happens if a grant is ambiguous?
A
We presumed a fee simple absolute. Fee simple absolute is the default estate.
7
Q
What is a defeasible fee?
A
It is referring to a present possessory estate that doesn’t necessarily last forever, and my a be cut short.
A defeaseible fee may be termineted by the occurrence of an event. The condition will cut short the fee simple.
7
Q
What is a fee simple determinable?
A
A possessory interest limited by specific durational language - so long as, during, while, until.
8
Q
What is a fee simple subject to condition subsequent?
A
A possesory interest limited by specific conditional language - but if, provided that, on the condition that.
9
Q
What is a possibility of reverter?
A
A future interest held by a grantor following a fee simple determinable that automatically vests after the durational period ends.
10
Q
What is a right of entry?
A
A future interest held by the grantor following a fee simple subject to condition subsequent that only vests if it is reclaimed.
11
Q
What is a fee simple subject to executory itnerest?
A
A present possessory itnerest that will end upon the happening of an event and the furtuer interst will vest in a third party. The future interest is held by a transferee and not the grantor .
12
Q
What is a life estate?
A
A present estate that is limited by a life?
13
Q
How do you create a life estate?
A
Using the magic words “for life.” If it is ambiguous, you look for the grantor’s intent to create an estate that will end upon the death of the measuring life.
14
Q
How does a life estate terminate?
A
It will end naturally when the measuring life ends. It is transferable.
15
Q
When does the doctrine of waste come into play?
A
When more than one person has an interest in the same piece of real property and there is a change in the value of the property due to the actions/inactions of the party in possession.
(landlord v. tenat, life estate, co-tenant out of posession v. tenant in possession, mortgage)
16
Q
What are the three types of waste for the Doctrine of Waste?
A
1.Affirmative waste - waste caused by voluntary conduct, which causes a decreaes in value
2. Permissive waste - waste caused by neglect which causes a decrease in value
3. Ameliorative waste.- changes actually increase value of property
17
Q
What is a remainder?
A
A future interest that follows a life estate. A remainder can be vested or contingent. But it cannot follow a vested fee simple.
18
Q
What is a vested remainder?
A
An interest that is given to an ascertained grantee (i.e. someone who can be identified) and not subjec t to a condition precedent (i.e. there is no condition that must be satisfied in order for the interest to vest).
19
Q
What happens if the holder of a vested remainder dies?
A
The interest passes to the holder’s heirs.
20
Q
What is a vested remainder subject to open? (Class Gifts)
A
A vested remainder (following a life estate) in a class gift and the full class membership is unknown. At least one person in the class must be vested for it to be vested subect to open, otherwise it is contingent.
21
Q
What does RAP apply to?
A
Contingent remainders; vested remainders subject to open (class gifts); and executory interests.
22
Q
What is the rule of convenience?
A
A class-closing mechanism to avoid the application of RAP to a class gift. If the grant does not have an express closing date, the Rule of Convenience closes the class when any member of the class becomes entitled to immediate possession.
23
Q
What is the Doctrine of Worthier Title?
A
It prevents against remainders in a grantors heirs, creating a presumption of a reversion to the grantor.
(“to Anna for life, then to my heirs”–> no remainder to heirs, but a reversion to grantor to then devise to heirs)
24
What is the Rule in Shelley's Case?
Prevents against remainders in a grantees heirs --- uses the doctrine of merger to create a fee simple.
("to Anna for life, then to Anna's heirs" --> gives Anna a fee simple to then devise to her heirs)
25
What is an executory interest?
A future interest that cuts short (i.e. divests) a prior vested interest.
26
What kinds of executory interests are there?
1. Springing executory interest - divests the grantor
2. Shifting executory interest - Divests a prior grantee
EXAM TIP: count the parties. 2 parties = likely springing; three parties = likely shiting.W
27
What does RAP do?
It prevents remote vesting. The goal of the rule is to test for certainty, operating like a statute of limitations for contingent future interests.
28
What is the method for the RAP?
1. When: Identify when the interests are created.
2. What: Determine if the interests created are subject to RAP.
3. Who: Identify the relevant and, if applicable, validating lives.
29
What is a validating life?
The persom who tells us whether or not the interest vests within the perpetuities period (lifetime plus 21 years).
30
What is the "all or nothing" rule? ( Class Gift Rule)
Applies when RAP applies to class gifts. If the gift to any member of the class is void under RAP,then the gift is void as to all members of the class.
BUT fixable with rule of convenience
31
What are the exceptions to the all or nothing class gift rule?
1. Transfer of a specific dollar amount to each class member.
2. Transfer to a subclass that vests at a specific time, e.g., "to the children of B, and upon the death of each, to that child's issue"
32
WherWhat are the exceptions to RAP
1. Charities - a gift from one charity to another charity.
2. Options - an option held by a current tenant to purchase a fee interest in the leasehold property OR an option (or right of first refusal) in a commercial transaction.
33
What is the "Wait and See" approach?
The most common modern approach to the RAP. Courts "wait and see" if an interest subject to RAP vests or fails within some time period. Some states have changed to 90 years.
34
WHat is Cy Pres?
An equitable doctrine (borrowed from the law of trusts) that allows a court to reform a transfer to avoid RAP.
35
What is a concurrent estate?
It is ownership or possession of a real property by two or more persons simultaneously.
Concurrent owners each have a right to use or possess teh whole of the property. The exception being concurrent owners can contract out the basic rule.
36
What are th three kinds of concurrent ownership/concurrent estates?
1. tenancy in common
2. joint tenancy
3. tenancy by the entirety
37
What is a tenancy in common?
The default concurrent interest.
Concurrent owners have separate but undivided interests in the property.
There is no right of survivorship - each tenancy can transfer freely at death and during life.
38
What is a joint tenancy?
The defining characteristic is hte right of survivorship, whereby the surviving joint tenant(s) automatically take the deceased tenant's interest.
39
How is a joint tenancy created?
The grantor must make a clear expression of intent PULS there must be survivorship language, e.g. "as joint tenants with a right of survivorship"
40
What are the four unitities you need to create a joint tenancy?
PITT
1. Possession - every JT has equal right to possess the whole property
2. Interest - must have equal share of same type of interest
3. Time - JTs must reeive their interests at the same time
4. Title - JTs must receive their interests in teh same instrument of title.
NOTE: if one of the four unities is lost, the joint tenancy is severed.
41
What happens if any of the four unities (PITT) are severed during the JTWRS?
The JTWRS is severed and the interest is converted into a tenancy in common.
42
What happens if a JTWRS is transfered fduring life (inter vivos transfer)?
The transfer will destroy/sever the right of survivorship and convert the estate into a tenancy in common.
BUT if the conveyance is by only one of more than two JTs, it does not destroy the JT of the remaining tenants.
43
What happens to a lein against a joint tenants interest when they dies?
The lien terminates upon the tenant's death, so the surviving tenanat's interests are not encumbered.
44
What happens when a JT grants a mortgage interest in the JT to a creditor?
Majority Approach: lien theory - mortgage is treated as a lien and does not destroy the JT.
Minority: Title Theory - the mortgage severs title and the tenancy between the joint tenants and the creditor is converted into a tenancy in common
45
What happens when a JT leases their share int he property to a tenant?
Differs on jurisdiction:
some jurisdictions hold the lease severs the joint tenancy, others treat the lease as a temporary suspension of the joint tenancy.
46
What is a tenancy by the entirety?
A joint tenancy between a married people. There are five unities. PITT + marriage. It creates a right of survivorship.
Tenants by the entirety cannot alienate or encumber their shares with consent of their spouse.
47
How is a tenancy by the entirety?
Requires the magic words "as tenancy by the entirety, with a right of survivorship". If the grant is ambiguous, courts presume the porperty is held as JTs or TICs.
48
What is an ouster?
A co-tenant in possesion denies another oc-tenant access to the party. This gives ries to remedies for the ousted tenant: (i) get an injunction granting access to the property, and/or (ii) recover damages for the value of hte use while the co-tenant was unable to access the property.
NOTE: you have to ask for access and manifest intent to have ousted remedies.
49
How is rent from third's party's possession of a property divided in concurrent ownership interests?
Divided based on the interests of each co-tenant.
50
How are operatinge expenses divided between concurrent ownershp?
Based on ownership interests of each co-tenant.
Each co-tenant can collect contribution from the other co-tenants for payments in excess of their share of the operating expenses.
51
Is there a right for remibursement for repairs and improvements in concurrent ownership?
No not for improvements or necessary repairs. But the co-tenant who makes the repairs or improvements can get credit in a partition action.
52
What is partition?
An equitable remedy vailable to all holders of a TIC or JT (not TBTE) and is a unilateral right. The court divides concurrent ownership into distinct ownership. Courts prefer in kind division.
53
When will courts order partition by sale and no in kind?
When the pysical partition is not practical (e.g., land has complicated terrain) or not fair to all parties.
54
How are proceeds from a partition divided?
Among co-tenants based on their ownership interest.
55
When is an agreement not to partition enforceable?
The agreement is clear and the time limitation is reasonable.
56
What does the FHA prohibit?
Discrimination in the sale, rental, and financing of dwellings. It also prohibits advertising that states a discriminatory preference. The FHA's primary focus is on multifamily residential housing.
57
Who is not covered by the FHA?
1. Single family housing that is osld or rented without a broker
2. Owner-occupied buildings with four or fewer living units. ("Ms. Murphy's Boarding House") - Ms. Murphy has to occupy at least one of them
3. Religious organizations and private clubs
58
What traits are protected under the FHA?
Race
Color
Religion
National Origin
Sex - both sexual orientation and gender identity
Disability
Familial Status - families with children under 18 or someone who is pregnant
59
What is prohibited under the FHA?
1. Refusing to rent, sell, or finance a dwelling
2. Requiring different rents
3. Falsely denying that a unit is available
4. Providing different services to facilities (EXCEPTION: reasonale accomodations for a tenant with disabilities)
5. Stating a discriminatory preference in an advertisement. - BROADEST (NOTE: single-family without broker exception and Ms. Murphy's exception don't apply to this, but religions organization adn private clubs can list restrictions in their advertisements.
60
What intent is needed under the FHA?
Allows for both intent (disparate treatment) and effect (disparate impact) cases.
61
hat is the rule for conflict of laws in property cases?
The controlliing law is based upon where the prperty is located. (i.e. law of the situs).
62
What does a lease create?
Both a contract interest and a property interest.
63
What are the four types of estates that can govern the landlord-tenant relationship (i.e. tenancies)?
1. tenancy for years
2. periodic tenancy
3. tenancy at will
4. tenancy at sufferance
64
What is a tenancy for years and how is it created and terminated?
A tenancy at will is measured by a fixed and ascertainable amount of time. (doesn't have to be years, can be any length of time)
Created: by an agreement by the LL and T, demonstrating intent to create a leasehold (longer than 1 year = SOL)
Terminated: automatically upon the expiration of the term; OR if T surrenders the lease or T or LL. commit a material breach before term is over.
65
What is a periodic tenancy and how is it created and terminated?
An estate that is repetitive and ogoing for a set period of time (i.e. month-to-month, year-to-year). It renews automatically at the end of each period until one party gives the proper notice of temrination.
Created: parties must intent to create a periodic tenancy. Express intent via signed lease, or implied intent via payment of rent.
Terminated: notice given before the start of what will be the last term. Most jurisdictions require written.
- Old Approach: in a year-to-year lease, must give at least 6 months notice in aadvance.
- New Approach: shorter notice requirement, many states say 1 month.
66
What is a tenancy at will and how is it created and terminated?
A tenancy at will may be terminated by either the landlord or tenant at any time, for any reason.
Creation: by express agreement or implication
Terminated: by either party without notice. (NOTE: right to terminate by impication only applies if LL is given right to terminate at will but not T); death of LL
67
What is a tenancy at sufferance and how is it created and terminated?
A tenancy at sufferance is created when a tenant holds over after the lease has ended.
Creation: created by the actions of the T alone
Termination:
1. T voluntarily leave
2. LL evicts T
3. LL rerents to T
68
What duties does a tenant have?
1. duty to pay rent
2. duty to avoid waste - both affirmative (voluntary) and permissive (negligence). Can do ameliorative waste, but usually need LL's permission
69
What are the three situations where the T's duty to pay rent is suspended?
1. Premises are destroyed and T didn't cause the damage
2. LL completely or paritlaly evicted T
3. LL materially breaches the lease - Implied Covenant of Quiet Enjoyment and Implied Warranty of Habitability
70
What is the Implied Covenant of Quiet Enjoyment?
T can withhold rent when the LL takes actions that make the premises wholly or substantially unsuitable for their intended purposes, and the tenant is constructively evicted.
71
What are the four elements of constructive eviction?
1. Premises were unusable for their intended purposes
2. The T notifies the LL of the problem
2. The LL does not correct the problem
4. The T vacates the premises after a reasonable amount of time has passed
72
What is the implied warranty of habitability?
The LL has an obligation to maintain the property such that it is suitable for residential use. It is concerned about conditions that threaten the T's health and safety.
73
What can a T do about rent if the premises violate the implied warranty of inhabitability?
1. Withhold rent IF the tenant (i) notified the LL of the problem and (ii) gave the LL reasonable opportunity to correc the problem
2. remedy the defect and offset costs against the rent
3. defend against eviction
74
Who has the duty to repair?`
Residential Lease : LL is presumed responsible for repairs. T must notify LL of any needed repairs - but no duty for repairs caused by T's actions.
Commercial Lease: LL can place duty to repair on T.
75
What duties does a LL have?
1. Duty to mitigate damages
- Minority: LL doesn't have to mitigate damages - usually in cases of commercial leases
- Majority: LL must make reasonable efforts to mitigate damages
2. Duty to deliver possession
-Minority: LL only has to deliver legal possession
-Majority: LL must deliver actual/physical possession
3. Duty to ensure quiet enjoyment
- Control common areas
- Control nuisance-like behavior of other Ts
- No duty to control off-premise actions of thrid parties
76
Whatis a lanlords tort liability under common law?
1. responsible in negligence for latent (hidden) defects about which the T has not been warned
2. Responsible for faulty repairs completed by the LL (or the LL's agent) negligently
3. Responsible for negligence that causes injuries in common areas of the property.
77
What is a LLs tort liability under the modern trend?
LL has a general duty of reasonable care.
78
What is an assignment?
An assigment is a complete transfer of a T's remaining term to a subsequent T.
79
What is a sublease?
A sublease is a transfer for less than the entire remaining duration of a lease's term.
80
Who can a LL collect rent from for an assignment?
The first tenant - because of privity of contract.
AND
The second tenant - because of privity of estate
81
Who can a LL collect rent from in a sublease?
The first tenant -- becaue of privity of K and estate.
(NOTE: the first tenant can collect rent from the subsequent tenant)
82
What are the two stages of land sale contracts?
1. contract stage - parties negotiate terms
2. deed stage - parties transfer property
83
What are the statue of fraud requirements for sale of land?
1. must be in writing
2. must be signed by the party to be charged; and
3. must include essential terms (the parties, description of hte property, and price and payment info)
84
What are the exceptions to the SOF requriement for sales of land?
1. Partial Performance (two of the following: payment; possession; improvements)
2. detrimental reliance
85
What is marketable title?
Title that is free from an unreasonable risk of litigation.
STANDARD: that of a reasonable buyer
Buyer's Remedy: recission of K
86
What things would render a title unmarketable?
1. title acquired by adverse possession that hasn't been quieted
2. private encumberance (mortgage, covenant, easement)
3. violation of zoning ordinance.
NOTE: A defect of title must be fixed before closing, at which point hte contract and deed merge and the deed controls.
87
What is the majority rule for risk of loss in a land sale?
Buyer holds the risk between K execution and closing because they hold equitable title.
88
What is the minority rule of risk of loss for sale of land?
Seller holds the risk until the closing and delivery of deed.
89
What duty to disclose do must jurisdictions impose on sellers in sales of land?
A duty on the seller to disclose to the buyer all known, physical and material defects.
- concerned with latent or hidden defects;
- material defect must substantially affect the value of the home, health and safety of its occupants, or the desireability of hte home
- genearl disclaimers "as is" will not satisfy the seller's duty to disclose
90
What is adverse possession?
It allows a person in unlawful possession to acquire good title to a piece of property. Until the person acquires good title, they are a trespasser.
91
What are the elements of adverse possession?
1. continuous for the statutory period (use is consistent with type of property being possessed) - tacking okay if privity between currend adverse possessor and prior
2. open & notorious - would put a reasonable true owner on notice
3. hostile
- majority rule: ignores AP's state of mind
- good faith: AP was mistaken
- bad faith: aggressive trespass
4. exclusive (can share with other adverse possesor - becomes tenancy in common)
92
What is a deed?
A legal instrument that transfers ownership of real property.
93
What is required for a deed transfer to be valid?
1. Delivery - need present intent to transfer property, doesn't have to be physical
2. Acceptance - genearlly presumed
94
What contents are required for a deed to be valid?
1. identify the parties (grantor and grantee)
2. signed by the grantee - can be agent of grantee
3. includes words of transfer (i.e. granting clause) showing present intent
4. include sufficient description of the property - legal not required, can be based on physical attributes & extrinsic evidence is OK to clarify ambiguous description.
95
What is the equal dignaties rule?
If an agent is required to sign a deed for the grantor, then the agency relationship must be created in writing.
96
What does it mean to record a deed?
It is to publicly register your deed, giving notice that you own the property for subsequent purchasers.
97
What is the common-law recording rule?
"First in time, first in right." Applies if there is not a recording statute.
98
What types of interests are covered by recording acts?
1. deeds
2. mortgages
3. leases
4. options
5. judgments affecting title
6. other instruments creating an interest in land, such as easements or covenants
99
Who is protected by recording acts?
Subsequant purchasers (i.e. someone who has acquired an interest in the land).
100
Who is not covered or protected by recording acts?
Grantees who acquire title by gift, intestacy, or devise are not protected by recording acts.
101
What are the three types of notice?
1. actual notice
2. constructive notice (i.e. reecord notice)
3. inquiry notice
102
What is actual notice?
When the subsequent grantee has real, personal knowledge of the prior incident .
103
What is constructive notice?
When a prior interest is recorded.
104
What is inquiry notice?
When a reasonable investigation would have disclosed the existence of prior claims
There are two common situations of inquiry notice:
1. dude on the land - someon is living or using the land, and had the subsequent grantee investigated he would haved discovered the person in possession.
2. mentioned interest: there is an interest mentioned in the deed to some other transaction; had the susequent grantee inquired, he would have discovered the interest.
105
What is a race statute and what is its key language?
Rule: First to record wins, even if the subsequent purchaser had notice of a prior, unrecorded conveyance.
Key language: "first recorded" or "first to record"
106
What is a notice statute and what is its key language?
Rule: A subsequent purchaser wins if she acquires without notice of a prior, unrecorded conveyance.
Key Language; "in good faith" or "wihtout notice"
107
What is a race-notice statutes?
Rule: A subsequent purchaser wins if two requirements are met:
1. acquired wihtout notice of prior unrecorded conveyance; and
2. records first
Key language: "in good faith" or "without notice" PLUS "first duly recorded" or "first recorded"
108
What is the shelter rule?
A person who takes from a bona fide purchaser protected by the recording act has the same rights as her grantor.
109
What is Estoppel by Deed?
Arises when grantor conveys land the grantor does not owne. If the grantor subsequently acquires title to the land, they are estopped from trying to repossess on grounds that he didn't have title when he made the original conveyance.
110
What are the three kinds of deeds?
1. general warranty deed
2. special warranty deed
3. quitclaim deed
111
What are the six implied covenants in a general warranty deed?
Present Covenants:
1. Covenant of seisin
2. Covenant of the right to convey
3. Covenant against encumbrances
Future Covenants:
1. Covenant of quiet enjoyment
2. Covenant of warranty
3. Covenant of future assurances
112
What does of covenant of seisin do?
It warrants that the deed describes the land in question
113
What does a covenant of the right to convey do?
It warrants that the grantor (i.e., the seller) has the right to convey the property.
114
What does the covenant against encumbrances do?
It warrants that there are no undisclosed encumbrances on the property that could limit its value.
115
What does the covenant of quiet enjoyment do?
The grantor promises that the grantee's possession will not be disturbed by a third-party claim.
116
What does the covenant of warranty do?
The grantor promises to defend against future claimes of title by a third party?
117
What does the covenant of assurances do?
The grantor promises to fix future title problems.
118
What does a general warranty deed protect against?
All defects, even if the grantor did not cause the defects.
119
What does the special warranty deed protet?
It protects only against defects caused by the grantor. It includes the same six covenants as a generaly warranty deed, but only as they apply to the acts or omissions of the grantor.
120
What does a quit claim deed do?
The grantor makes no warranties as to the health of the tilte.
121
What remedy is available for breach of deed covenants?
Damages.
122
What does escheat mean?
If a decedent dies without a will and without heirs, the decedent's property goes to the state.
123
What is an heir?
The person who takes a decedent's intestate estate.
124
What is a devisee?
The person who takes a devise by will.
125
What does escheat mean?
If a decedent dies without a will and without heirs, the decedent's proeprty goes to the state.
126
What is ademption?
A devise of property that fails (or "adeems") because it is not in the testator's estate at the time.
The basic rule is that the gift fails and the intended recipient gets nothing.
127
What is Ademption by Satisfaction?
If the testator gives the intended beneficiary the promised gift during life, then the eneficiary keeps the gift.
128
What is and anti-lapse statute.
An anti-lapse statute prevents a gift from failing because an intended recipient predeceased the testator.
In most states, to qualify under an anti-lapse statute the predeceasing beneficary must e a relative of the testator who dies leaving issue.
The statute replaces the intended beneficiary with a family memer who stand in the shoes of their parent and takes the gift on their behalf.
129
What is a trust?
A device for managing property with bifurcated ownership. One person (the trustee) owns property (legal title) for the benefit of another person (the beneficiary) who holds equitable title.
130
What is res?
Property that is subject to a trust.
131
What are restraints on alientation?
A restriction on transferring property.
132
Where are restraints on alienation seen?
1. inter vivos grant of an estate smaller than a fee simple
2. devise of an estate smaller than a fee simple
3. co-tenant agreement
4. covenants that run with the land
4. easemment
133
What are the rules about restrictions on alienation?
An absolute restraint on alientation is void.
A partial restraint on alienation is valid if it is for a limited time and reasoable purpose.
A restriction on the use of property is generally permissible.
134
What is the effect of a valid restraint on alienation?
Any attempt to alienate the property will be null and void.
135
What is a mortgage?
A security device used to secure payment of a debt.
136
What are the two components of a mortgage?
1. The Note: the borrower's promise to repay the loan/debt
2. The Mortgage: the instrument that provides security for the note.
137
What are the two kinds of mortgages?
1. Purchase money mortgage - a person takes a loan out for hte purpose of purchasing property
2. Future advance mortgage: A line of credit used for home equity, construction, business, and commercial loans (often referred to as a "second mortgage")
138
What are the four alternatives to mortgages?
1. Deed of Trust
2. Installment Contract
3. Absolute Deed
4. Conditional Sale and Repurchase
139
What is a deed of trust?
Operates like a mortgage but uses a trustee to hold title for the benefit of the lender.
140
What is an installment land contract?
The seller finances the purchas, the seller retains title until the buyer makes the final payment on an installment plan.
141
What is the tradition rule for installment land contracts?
If the buyer breaches (i.e. misses a payment), the seller keeps installment payments made and the property.
142
What is the modern approach to installment land contracts?
More lenient to help defaulting buyers.
Some treat it as a mortgage, requiring seller to foreclose.
Some given buyer equitable right of redemption to stop foreclousure sale.
Some allow the seller to retain ownership, but require some restitution for what's been paid.
143
What is an absolute deed?
The mortgagor transfers the deed to the property instead of conveying a security interest in exchange for the loan.
144
What is a conditional sale and repurchase?
The owner sells property to the lender who leases the property back to the owner in exchange for a loan.
The lender gives the owner the option to repurchase after the loan is paid off.
145
How may a mortgagor transfer property?
By deed (sale), by will, or by intestate succesion.
146
What happens to the mortgagor's liability after property is transfered.
The mortgagor remains personally liable unless:
1. the lender/mortgagee releases the mortgagor OR
2. the lender modifies the transferee's obligation
147
What is a due-on-sale clause?
It gives the lender hte option to demand immediate full payment upon transfer.
148
What is a due-on-encumberance clause?
It is an acceleration clause when the mortgagor obtains a second mortgage or otherwise encumbers the property.
149
What liability does a subsequent transferee have on a mortgage?
1. If they "assume" the mortgage, they are personally liable for it ALONG WITH the original mortgagor.
2. If they take "subject to" the mortgage, they are not personally liable on default. This is the default option if a deed is silen or ambiguous as to liability.
150
What is a "lien state"?
Majority rule. Treats the mortgage as a lient hat does not severe joint tenancy.
151
What is a "title state"?
Minority state. A mortgage does sever a joint tenancy and converts it into a tenancy in common.
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When can a mortage/lender take possession in a lien theory state?
Not until foreclosure is complete.
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When can a mortgagee/lender take possession in a title state?
At any time.
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When can a mortgagee/lender take possession in a intemediate title theory state?
Not until default on the mortgage, at which point the lender can take possession.hat i
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What is the equity of redemption?
A common law right held by the mortgagor to reclaim title and prevent foreclosure upon the full payment of the debt. This right must be exercised before the foreclosure sale.
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What is the deed in lieu of foreclsoure?
Rather than face foreclosur, the mortgagor can convey the property tot he lender in exchange for releasing her from any outstanding debt.
Stops from hurting credit.
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What is "clogging" the equity of redemption?
To "clog" is to create terms that make it harder for a borrower to exercise her equity of redemption. Courts will intervene to present clogging. They'll be skeptical of provisions of clogging.
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What is a foreclosure?
A forced sale of an asset to pay off a debt. The mortgagee must give notice before closing.
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What are the two methods of foreclosure?
1. Judiical sale: sale under the supervision of a court
2. Power of Sale: Sale held by the mortgagee/lender
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What happens to excess proceeds from a foreclosure?
They are used to satisfy other creditors.
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What happens if the foreclosure sale creates a deficiency, i.e., the sale produces less than the mortgagor owes?
The mortgagor is still responsible. The court can issue a defficiency judgment for the remaining balance.
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What is a senior interest and what happens to them at foreclosure?
A senior interest is an interest acquired before the interest that is being foreclosed. they survive the foreclosure.
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What is a junior interest and what happens to them after foreclosure?
Junior interests are interests that are required after the interest that is being foreclosed. They are extinguished by the foreclosure.
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What is the first in time rule for priorities of creditors in foreclosures?
It says that surviving debts are to be satisfied chronologically.
You classify the interests as either senior or junior and then apply the rule to determine if they survive foreclosure.
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What is the Purchase-Money Mortgage Exception to the "First in Time" Rule?
A purchase-money mortgage has priority over mortgages and leans created by or against hte purchaser/mortgagor prior to the purchaser/mortgagor's acquisition of the property.
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What is the Recording Act Exception?
A junior mortgage MAY take priority over an unrecorded senior mortgage.
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What is a subordination agreement between mortgagees?
Occurs when a senior mortgagee agrees to subordinate its interest to a junior interest.
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What is an easement?
A right held by one person to make use of another person's land.
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What is a servient estate?
Land burdened by the easement.
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What is a dominant estate?
Land benefitied by the easement.
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What are the four types of easements?
1. Affirmative easement
2. Negative easement
3. easement appurtenant
4. easement in gross
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What is an affirmative easement?
An easement giving the holder the right to do something on someone else's property.
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What is a negative easement?
An easement giving the holder the right to prevent someone from doing something on their land.
This is an express easement, subject to the SOF and recording statutes.
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What is an easement appurtenant?
An easement tied to the use of the land. It is fully transferrable, and goes with the land.
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What is an easement in gross?
An easement that benefits the holder personally. There is no dominant estate, only a servient estate. And while traditionally not transferrable, courts now allow them to be transferred if there is intent for it to be transferrable.
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What are the two methods for creating an easement?
Express and implied.
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How are express easements created?
By grant or resercvation. They are subject to the SOF (must be in writing) and recording statutes.
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How are implied easements created?
Informally, arising out of factual circumstances.
They are not subject to SOF or recording statutes (unless subsequent purchaser had notice of easement). They are transferrable.
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What are the four kinds of impleid easements?
1. Easement by necessity
2. Easement by implication (prior use)
3. Easement by prescription
4.Easemetn by estoppel
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How is an easement by necessity created?
It is created only when property is virtually useless. It requires:
1. Comon Ownership: the dominent and subservient estates were owned in common by one person; and
2. Necessity at Severance: When the estates were severed into two separate estates, one of the properties became virtually useless without an easement.
NOTE: inconvenience is not eough.
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When does an implied easement by necssity end?
When the easement is no longer necessary
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How is an easement by implication created (prior use)?
It is created by an existing use on a property.
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What conditions must be met to create an easement by implication?
1. Common ownership
2. Before severance - owner used land as if there was an easement on it ("quasi-easement")
3. After severance - use was continuous and apparent from time of severance
3. Necssity - use must be reasonably necessary to the dominant estate's use and enjoyment
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What is an easement by prescription?
An easement created by adverse posession. It is created if the use is continuous, open and notorious, and hositle. BUT DOES NOT require exclusivity.
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How is implied easement by estoppel created?
1. Permission - given license by owner
2. Reliance on license - making unfair to withdraw permission
3. Permission withdrawn
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How is the scope of an express easeemnt determined?
By the terms of the easement when it was created. If the language is ambiguous, the court considers the intent of the original parties as to the purpose.
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How is the scope of an implied easement determined?
By the nature of the prior use or necessity.
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