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Flashcards in Property Deck (49):
1

Topics? (4)

(Ownership)

  1. Present Possessory Interests (Freeholds)
  2. Future Interests
  3. The Rule Against Perpetuities (RAP)
  4. Concurrent Estates

2

Types? (4)

(Ownership: Present Possessory Interests (Freeholds))

  1. Fee Simple Absolute
  2. Fee Tail
  3. Defeasible Fees
  4. Life Estates

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Structure?

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(Ownership: Present Possessory Interests (Freeholds): Fee Simple Absolute)

  1. Language = "To A & Her Heirs" or "To A' 
  2. Characteristics 
    1. Absolute Ownership 
    2. Potentially Infinite Duration 
    3. Freely Devisable
    4. Freely Descendible
    5. Freely Alienable
    6. Future Interest = No

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(Ownership: Present Possessory Interests (Freeholds): Fee Tail)

  1. Language = "To A & the Heirs of Her Body" 
  2. Characteristics 
    1. Abolished
    2. Upon Death (Historically) = Passes to Lineal  Blood Descendants
    3. Future Interest = Yes 
      1. Reversion = Grantor
      2. Remainder = 3rd Party

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(Ownership: Present Possessory Interests (Freeholds): Defeasible Fees)

  1. Fee Simple Determinable
    1. Language
      1. "To A So Long As" 
      2. "To A UntiI" 
      3. "To A During" 
      4. "To A Provided That" 
    2. Effect of Violation = Automatic Reversion to Grantor
    3. Characteristics 
      1. Devisable Subject to Condition 
      2. Descendible Subject to Condition 
      3. Alienable Subject to Condition 
      4. Future Interest = Possibility of Reverter
  2. Fee Simple Subject to Condition Subsequent
    1. Language
      1. 'To A But If ... Grantor Shall Have a Right of Entry"
      2. "To A Upon the Condition That... Grantor Shall Have a Right of Entry" 
    2. Effect of Violation = No Automatic Termination
    3. Characteristics 
      1. Devisable Subject to Condition Subsequent 
      2. Descendible Subject to Condition Subsequent 
      3. Alienable Subject to Condition Subsequent 
      4. Future Interest = Right of Entry (Power of Termination)
  3. Fee Simple Subject to Executory Limitation
    1. Language
      1. "To A But If X Occurs ... Then to B"
    2. Effect of Violation = Automatically Passes to 3rd Party
    3. Characteristics 
      1. Devisable Subject to Condition Subsequent 
      2. Descendible Subject to Condition Subsequent 
      3. Alienable Subject to Condition Subsequent 
      4. Future Interest = Shifting Executory Interest
  4. Interpretation of Defeasible Fees by Court
    1. Generally Disfavored 
      1. Discourage Restraints on Alienation
      2. Presumption Against Forfeitures 
      3. Clear DurationaI Language Required
        1. "To A for the Purpose?" 
        2. "To A with the Hope?" 
        3. "To A with the Expectation"
    2. Absolute Restraints on Alienation = Void & Unenforceable

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(Ownership: Present Possessory Interests (Freeholds): Life Estate)

  1. Language
    1. "To A for Life" = Simple Life Estate 
    2. "To A for B's Life" = Pur Autre Vie
  2. Rights of Life Tenant = Ordinary Uses & Profits
  3. Duty Not to Commit Waste
    1. Affirmative Waste (Voluntary Waste)
      1. Natural Resources
        1. Prior Use
          1. Open Mines Doctrine
        2. Reasonable Repairs & Maintenance
        3. Expressly Authorized by Grantor, OR
        4. Normal Use of the Land
    2. Permissive Waste
      1. Obligation to Repair
      2. Obligation to Pay Interest on Encumbrances
      3. Obligation to Pay Taxes
      4. No Obligation to Insure the Premises
    3. Ameliorative Waste
      1. Exception: Unanimous Consent by Future Interest Holders
  4. Future Interest = Reversion or Remainder
    1. Reversion = Grantor
    2. Remainder = 3rd Party 

7

Two types?

(Ownership: Future Interests: Interests Retained by Grantee)

  1. Remainder
  2. Executory Interest

8

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(Ownership: Future Interests: Interests Retained by Grantee: Remainder)

  1. General Characteristics 
    1. Created by Express Grant in Same Instrument
    2. Must Follow Preceding Estate
      1.  Life Estate, OR
      2. Term of Years
    3. Possessory = Natural Expiration of Preceding Estate
    4. Cannot Divest Prior Estates
      1. Can Never Follow Fee Simple or Defeasible Fees 
  2. Vested Remainder
    1. Requirements
      1. Created in an Ascertained Person
      2. Not Subject to Condition Precedent
    2. Sub-classification 
      1. Indefeasibly Vested Remainder = "To A for Life, Remainder to B"
      2. Vested Remainder Subject to Complete Defeasance (aka Vested Remainder Subject to Total Divestment
        1. Condition Subsequent
        2. Inherent Limitation
    3. Vested Remainder Subject to Open
      1. Class-Closing Rule (Rule of Convenience)
        1. Exception: Womb Rule
  3. Contingent Remainder
    1. Requirements
      1. Created in an Unascertained Person 
        1. Heirs of Living Person, OR
        2. Subject to a Condition Precedent
          1. Failure Condition Precedent = Reversion to Grantor
          2. Satisfaction of Condition Precedent = Indefeasible Remainder
      2. Destructibility 
        1. Common Law = Destructibility
        2. Modern Law = No Destructibility
      3. The Rule in Shelley's Case = "To B for Life, Then to B's Heirs" & B is Alive 
        1. Common Law = Doctrine of Merger
        2. Modern Law = Rule in Shelley's Case Abolished
      4. Doctrine of Worthier Title = "To B for Life, Then to O's Heirs"
        1. Effect of Doctrine
          1. B = Life Estate 
          2. O = Reversion  
        2. Rule of Construction
  4. Transferability 
    1. Devisable = Yes 
    2. Descendible = Yes 
    3. Alienable = Yes

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Structure?

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(Ownership: Future Interests: Interests Retained by Grantee: Executory Interest)

  1. Shifting Executory Interest
  2. Springing Executory Interest

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(Ownership: The Rule Against Perpetuities (RAP))

  1. The Rule
  2. Measuring Life
  3. Applicable Future Interests
    1. Contingent Remainders 
      1. Vesting?
    2. Executory Interests 
      1. Vesting?
    3. Vested Remainders Subject to Open
      1. Vesting?
      2. All or Nothing Rule
  4. What Might Happen? 
    1. The Fertile Octogenarian Rule
    2. Unborn Widow
    3. Slothful Executor
    4. Precocious Toddler
  5. Charitable Exceptions 
    1. Can Be Perpetual
    2. Charity to Charity
  6. Modern RAP 
    1. Wait & See
    2. Uniform Statutory Rule Against Perpetuities 
      1. Common Law Valid
      2. 90 Years
      3. Cy Pres Doctrine ("As Near As")

11

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(Ownership: Concurrent Estates)

  1. Joint Tenancy = "To A & B as Joint Tenants with the Right of Survivorship
  2. Tenancy by the Entirety = "To H & W with the Right of Survivorship"
  3. Tenancy in Common = "To A & B as Tenants in Common"
  4. Rights & Duties of Co-Tenants

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(Ownership: Concurrent Estates: Joint Tenancy)

  1. Characteristics 
    1. Right of Survivorship
    2. Transferability 
      1. Devisable = No
      2. Descendible = No
      3. Transferable = Yes
  2. Creation 
    1. 4 Unities Required
      1. Time
      2. Title
      3. Interest
      4. Possession
    2. Express Language of Right of Survivorship
    3. Straw Man Conveyance
  3. Severance
    1. By Voluntary Agreement
    2. Court Ordered Division
      1. Partition in Kind
      2. Partition by Forced Sale
    3. Inter Vivos Conveyance
      1. Buyer = Tenant in Common
      2. Contract to Sell = Severs Joint Tenancy at Time of Contract
        1. Equitable Conversion
    4. Mortgages 
      1. Majority View = Does Not Sever the joint Tenancy
      2. Minority View = Severs the Joint Tenancy
    5. Forced Sale 
      1. Judgment Liens
      2. Foreclosed Mortgages
    6. Lease by Joint Tenant 
      1. Common Law = Severs the Joint Tenancy
      2. Modern Law = Does Not Sever the Joint Tenancy
    7. Murder of One Joint Tenant by Another

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(Ownership: Concurrent Estates: Tenancy by the Entirety)

  1. Creation 
    1. Valid Marriage
    2. 4 Unities Required
      1. Time
      2. Title
      3. Interest
      4. Possession
    3. Right of Survivorship
  2. Severance 
    1. Divorce
    2. Mutual Written Agreement Between Husband & Wife
      1. Unilateral Conveyance = No Severance
    3. Execution by Joint Creditors 
      1. Unilateral Creditors = No Severance

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(Ownership: Concurrent Estates: Tenancy in Common)

  1. Presumed by Modern Law
  2. One Unity Required = Possession
  3. No Right of Survivorship
    1. Devisable = Yes
    2. Descendible = Yes
    3. Alienable = Yes

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(Ownership: Concurrent Estates: Rights & Duties of Co-Tenant)

  1. Possession
    1. Wrongful Exclusion
      1. Adverse Possession Requires Ouster
    2. Rents from Co-Tenant 
      1. Exclusive Possession
      2. Wrongful Exclusion
  2. Profits from Non-Tenants
  3. Carrying Costs & Repairs 
    1. Taxes
    2. Mortgage
    3. Repairs
  4. Improvements
    1. Partition
  5. Duty Not to Commit Waste
    1. Affirmative Waste (Voluntary Waste) 
    2. Permissive Waste 
    3. Ameliorative Waste 
  6. Right to Bring Action for Partition

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(Natural Rights)

  1. Right to Exclude
    1. Trespass
      1. Action for Ejectment 
    2. Private Nuisance
      1. Elements 
        1. Plaintiff Has Interest in Land 
        2. Unreasonable Interference with Use & Enjoyment of Land 
          1. Unreasonableness?
            1. Harm to Plaintiff > Utility of Defendant's Conduct, OR 
            2. Harm to Plaintiff Greater Than Required to Bear without Compensation
        3. Defendant's Conduct = Negligent Abnormally Dangerous or Intentional 
  2. Lateral & Subjacent Support
    1. Strict Liability
    2. Negligence
  3. Water Rights
    1. Riparian Rights
    2. Prior Appropriation
    3. Percolating Water (Groundwater)
    4. Surface Water & the Common Enemy Doctrine

17

Topics? (4)

(Landlord-Tenant)

  1. Leasehold
  2. Tenant's Duties
  3. Landlord's Duties
  4. Assignment v. Sublease

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(Landlord-Tenant: Leasehold)

  1. Tenancy for Years (aka Estate for Years or Term of Years)
    1. Lease for Fixed Period of Time 
    2. Dates Must be Specified
    3. Leases > One Year = Writing Required
    4. No Notice Required for Termination
  2. Periodic Tenancy
    1. Creation
      1. By Express Agreement
      2. By Implication 
        1. No Mention of Duration but Payment Required at Specific Intervals
      3. By Operation of Law 
        1. Oral Leases > One Year In Violation of Statute of Frauds
        2. Holdovers
    2. Automatic Renewal
    3. Termination = Valid Notice Required
      1. Notice Must Be in Writing
      2. At Least One Period In Advance
        1. Exception: Leases > One Year = Only Six Months Notice Required 
      3. Lease Must Terminate at the End of Natural Lease Period
      4. Exceptions = Freedom of Contract
  3. Tenancy at Will
    1. Creation 
      1. By Express Agreement
      2. By Implication
    2. Termination
  4. Tenancy at Sufferance (aka Holdover Tenancy)
    1. Termination
      1. Evicts the Tenant, OR
      2. Elects to Hold Tenant to a New Tenancy

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(Landlord-Tenant: Tenant's Duties)

  1. Duty to Pay Rent 
    1. Breach in Possession
      1. Landlord May Evict, OR 
      2. Continue Tenancy & Sue for Back Rent, BUT
      3. Self-Help Prohibited (aka Changing of Locks)
    2. Breach out of Possession
      1. Treat Breach as Surrender
      2. Minority View = Leave Premises Vacant & Sue for Back Rent, OR
      3. Majority View = Duty to Mitigate
  2. Duty to Repair 
    1. Lease is Silent
      1. Affirmative Waste (aka Voluntary Waste) = Intentional Acts of Destruction
        1. Removal of Fixtures
          1. Fixture?
            1. Express Agreement Controls
            2. Absence of Express Agreement
      2. Permissive Waste = Neglect 
      3. Ameliorative Waste = Unauthorized Improvements 
    2. Express Covenant to Maintain
      1. Common Law
      2. Modern Law
  3. Duty to Invited Third Parties = Must Keep Premises in Reasonably Good Condition
    1. Indemnification
  4. Tenant's Tort Liability

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(Landlord-Tenant: Landlord's Duties)

  1. Duty to Deliver Possession 
    1. Majority View = The English Rule
    2. Minority View = The American Rule
  2. Implied Warranty of Quiet Enjoyment
    1. Breach by Actual Wrongful Eviction
    2. Breach by Constructive Eviction
      1. Substantial Interference
      2. Notice to Landlord
      3. Tenant Must Vacate Within Reasonable Time
  3. Implied Warranty of Habitability
    1. Non-Waivable
    2. "Uninhabitable"
      1. Local Housing Standards, OR 
      2. The Court 
    3. Tenant's Remedies
      1. Move Out & Terminate Lease
      2. Reduce Rent or Withhold Rent
      3. Repair & Deduct, OR 
      4. Remain in Possession & Sue for Damages
    4. Retaliatory Eviction = Illegal
  4. Landlord's Tort Liability
    1. Landlord's Liability for Acts of Other Tenants = Generally No
      1. Exceptions 
        1. Landlord Must Not Permit Nuisance on the Premises 
        2. Landlord Must Control All Common Areas 
    2. Common Law = Caveat Lessee
      1. Latent Defects
      2. Injuries Resulting from Negligent Voluntary Repairs
      3. Common Areas
      4. Public Use
        1. Landlord Knows or Should Know 
          1. That Tenant Makes Public Use of the Land 
          2. Of Defect 
          3. That the Tenant Will Not Fix Defect
      5. Short Term Lease of Furnished Dwelling

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(Landlord-Tenant: Assignment v. Sublease)

  1. Assignment = Transfer of Entire Interest
    1. Landlord & Tenant (aka Assignor) 
      1. Privity of Contract = Yes
      2. Privity of Estate = No
    2. Landlord & Assignee 
      1. Privity of Estate = Yes
        1. Covenants That Run with the Land
      2. Privity of Contract = No
    3. Subsequent Assignment
  2. Sublease = Transfer of Part of the Interest
    1. Landlord & Tenant (aka Lessee)
      1. Privity of Estate = Yes 
      2. Privity of Contract = Yes 
    2. Tenant (aka Lessee) & Sublessee 
      1. Privity of Contract = Yes
    3. Landlord & Sublessee
      1. Privity of Contract = No 
      2. Privity of Estate = No 

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Topics? (5)

(Your Right's in Another's Land)

  1. Easements
  2. License
  3. Profit
  4. Covenant
  5. Equitable Servitude

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Topics? (4)

(Your Right's in Another's Land: Easements)

  1. 2 Types of Easements
  2. 2 Forms of Easements 
  3. Transfer of Easements 
  4. Termination of an Easement 

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(Your Right's in Another's Land: Easements: 2 Types of Easements)

  1. Affirmative Easement
    1. Creation 
      1. By Express Grant
        1. > One Year = Must Be In Writing
        2. Signed by Grantor 
        3. Manifest Intent to Create Easement 
        4. Describe the Land 
        5. Identify the Parties 
      2. By Implication
        1. Existing Use
          1. Two Properties Were Once a Single Tract of Land &  Later Divided 
          2. Apparent & Continuous Use on Servient Land 
          3. Parties Intended that the Use Continue
          4. Reasonably Necessary to Use & Enjoyment of Dominant Land 
      3. By Necessity
        1. Previous United Ownership 
        2. Absolute Necessity
        3. Necessity Existed At Time of Severance of Property 
      4. By Prescription
        1. Actual Use 
        2. Open & Notorious 
        3. Adverse (Hostile)
        4. Continuous & Uninterrupted Use for Statutory Period 
  2. Negative Easement
    1. Recognized Negative Easements 
      1. Common Law Negative Easements
        1. Light 
        2. Air 
        3. Subjacent or Lateral Support 
        4. Stream Water from an Artificial Flow 
      2. Minority Negative Easement
        1. Scenic View 
    2. Creation = Expressly by a Writing Signed by the Grantor
    3. Always Appurtenant

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(Your Right's in Another's Land: Easements: 2 Forms of Easements)

  1. Appurtenant
    1. Two Parcels of Land Required
      1. Land Benefited = Dominant Tenement 
      2. Land Burdened = Servient Tenement 
  2. In Gross

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(Your Right's in Another's Land: Easements: Transfer of Easements)

  1. Appurtenant 
    1. Dominant Tenement = Passes Automatically
    2. Servient Tenement = Passes Automatically Unless BFP without Notice
      1. Exception: BFP without Notice
  2. In Gross = No Unless for Commercial Purposes

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Types? (9)

(Your Right's in Another's Land: Easements: Termination of an Easements)

  1. Stated Conditions
  2. Merger
  3. Release
  4. Abandonment by Physical Act of Holder
  5. Estoppel
  6. Necessity
  7. Condemnation of Servient Tenement by Eminent Domain
  8. Destruction of Servient Tenement, OR
  9. Prescription 

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(Your Right's in Another's Land: License)

  1. Creation
    1. Invalid Oral Easement = License
  2. Revocable
    1. Exceptions 
      1. Estoppel
      2. License Coupled with Interest

 

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(Your Right's in Another's Land: Covenant)

  1. Creation = Writing Required 
  2. Types of Covenants 
    1. Negative Covenant (aka Restrictive Covenant)
    2. Positive Covenant (aka Affirmative Covenant)
  3. Running with the Land
    1. Burden to Run
      1. Writing Required
      2. Intent of Original Parties
      3. Touch & Concern the Land
        1. Touch & Concern = Relate to the Land
      4. Horizontal & Vertical Privity 
        1. Horizontal Privity = Successors in Interest
        2. Vertical Privity = Non-Hostile Connection Between Original Party & Sucessor
      5. Notice
        1. Actual Notice
        2. Imputed Notice
        3. Record
        4. Inquiry
    2. Benefit to Run
      1. Writing Required
      2. Intent of Original Parties
      3. Touch & Concern the Land
      4. Vertical Privity

30

Structure?

  1. _
    1. _
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    5. _
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    5. _
  4. _
    1. _
      1. _
      2. _
        1. _
        2. _
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  5. _

(Your Right's in Another's Land: Equitable Servitude)

  1. Creation = Writing Required
    1. Exception: Implied Equitable Servitude
  2. Burden to Run
    1. Writing
      1. Exception: Implied Equitable Servitude
    2. Intent of Original Parties
    3. Touch & Concern the Land
    4. Notice
    5. Privity NOT Required
  3. Benefit to Run
    1. Writing 
    2. Intent of Original Parties 
    3. Touch & Concern the Land 
    4. No Notice Required
    5. No Privity Required 
  4. Implied Equitable Servitude (General or Common Scheme Doctrine)
    1. Elements 
      1. Common Scheme Existed Before 1st Sale
      2. Defendant Had Notice of Common Scheme
        1. Actual
        2. Inquiry
        3. Record
  5. Defense = Changed Conditions

31

Topics? (4)

(Conveyance)

  1. Adverse Possession
  2. The Land Contract
  3. The Closing = Deed Becomes the Operative Contract
  4. Recording

32

Structure?

  1. _
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  2. _
    1. _
    2. _
    3. _

(Conveyance: Adverse Possession)

  1. Elements
    1. Actual
    2. Exclusive
    3. Continuous
      1. Tacking = Permitted if Non-Hostile Nexus
        1. Tacking Not Permitted After Ouster 
    4. Open & Notorious
    5. Hostile
    6. Running of the Statute
  2. Disabilities
    1. Incapacity
    2. Infancy
    3. Imprisonment

33

Structure?

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    2. _
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    2. _
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  3. _
    1. _
  4. _
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    2. _
    3. _
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    4. _
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      2. _

(Conveyance: The Land Contract)

  1. Formalities
    1. Statute of Frauds = Writing Required
      1. Exception = Part Performance
        1. Part Performance = 2 of 3 Required
          1. Buyer Takes Possession 
          2. Buyer Pays All or Part of Purchase Price, AND/OR
          3. Buyer Makes Substantial Improvement to Land
    2. Describe the Land 
    3. Identify the Parties 
    4. Intent to Sell 
    5. Specify Price or State Some Other Consideration
    6. Signed by the Party to be Bound
  2. Implied Promises of Seller 
    1. Marketable Title at the Closing = Unencumbered Fee Simple
      1. Unmarketable Title
        1. Adverse Possession 
        2. Encumbrances, OR
          1. Servitudes
          2. Mortgages
        3. Zoning Violations
    2. No False Statements of Material Fact
    3. No Failure to Disclose Latent Material Defects
  3. Implied Warranties of Fitness & Habitability = Caveat Emptor
    1. Exception = Implied Warranty of Fitness & Workmanlike Construction
  4. Equitable Conversion
    1. Definition
      1. Buyer = Real Property Interest
      2. Seller = Personal Property Interest
    2. Upon Execution of Contract
    3. Death After Equitable Conversion 
      1. Seller
      2. Buyer
    4. Damages or Destruction After Equitable Conversion 
      1. Majority View = Risk on Buyer
      2. Minority View = Risk on Seller

34

Topics? (4)

(Conveyance: The Closing = Deed Becomes the Operative Contract)

  1. Requirements
  2. Defective Deeds & Fraudulent Conveyances 
  3. Types
  4. Recording

35

Structure?

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  3. _

(Conveyance: The Closing = Deed Becomes the Operative Contract: Requirements)

  1. Lawful Execution of the Deed
    1. Writing Required
    2. Identify the Parties 
    3. Describe the Property
    4. Signed by Grantor 
  2. Delivery of Deed
    1. Actual Delivery
      1. Delivery by Escrow
      2. Deed Absolute on Face but Accompanied with Oral Conditions
    2. Implied Delivery
    3. Presumptions of Delivery
      1. Handed to Grantee 
      2. Acknowledged by Grantor Before Notary 
      3. Recorded 
  3. Acceptance by Grantee

36

Structure?

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  2. _
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(Conveyance: The Closing = Deed Becomes the Operative Contract: Defective Deeds & Fraudulent Conveyances)

  1. Void v. Voidable Deeds 
    1. Void = Set Aside Even  if BFP
      1. Forged 
      2. Deed Never Delivered 
      3. Fraud in Factum 
    2. Voidable = Set Aside Only if No BFP
      1. Lack of Capacity 
      2. Infancy 
      3. Duress 
      4. Breach of Fiduciary Duty 
      5. Undue Influence 
      6. Mistake 
      7. Fraud in Inducement 
  2. Fraudulent Conveyance
    1. Actual Intent to Hinder, Delay or Defraud Any Creditor of Grantor, OR 
    2. Without Receiving a Reasonably Equivalent Value in Exchange

37

Structure?

  1. _
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(Conveyance: The Closing = Deed Becomes the Operative Contract: Types)

  1. Quitclaim Deed = No Covenants
    1. Exception: Marketable Title at Closing
  2. General Warranty Deed = 3 Present & 3 Future Covenants
    1. Present Covenants = Breached at Time of Delivery
      1. Covenant of Seisin
      2. Covenant of Right to Convey
      3. Covenant Against Encumbrances
    2. Future Covenants = Breached if Grantee Disturbed While in Possession 
      1. Covenant for Quiet Enjoyment
      2. Covenant of Warranty
      3. Covenant for Further Assurances
  3. Special Warranty Deed = 2 Promises by Grantor
    1. Grantor Has Not Conveyed to Another
    2. Free from Encumbrances Created by Grantor

38

Structure?

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(Conveyance: Recording)

  1. The Recording Statutes
    1. Race
    2. Notice
    3. Race-Notice
  2. Bona Fide Purchaser (BFP) 
    1. Subsequent Purchaser 
    2. For Valuable Consideratio
    3. Without Notice At Time of Conveyance
      1. Actual = Literal Knowledge 
      2. Constructive 
        1. Inquiry, OR 
        2. Record
          1. Properly Recorded? = Must Record in Chain of Title
  3. The Shelter Rule
  4. Wild Deeds = No Record Notice
  5. Estoppel By Deed

39

Topics? (5)

(Contracts for Security Interests (Mortgages))

  1. Mortgages
  2. Deed of Trust
  3. Installment Land Contract
  4. Equitable Mortgage (Absolute Deed)
  5. Sale-Leaseback

40

Topics? (5)

(Contracts for Security Interests (Mortgages): Mortgages)

  1. Parties
  2. Creation of Legal Mortgage
  3. Transfers by Mortgagee
  4. Transfer by Mortgagor = Grantee Takes Subject to Mortgage if Mortgage Properly Recorded
  5. Default & Foreclosure

41

Structure?

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(Contracts for Security Interests (Mortgages): Mortgages: Parties)

  1. Creditor = Mortgage
    1. Lien (Statutory Right to Redeem)
  2. Debtor = Mortgagor

42

Structure?

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(Contracts for Security Interests (Mortgages): Mortgages: Creation of Legal Mortgage)

  1. Writing Required 
  2. Material Information 
    1. Parties 
    2. Description of Land 
  3. Recording Not Required 

43

Structure?

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(Contracts for Security Interests (Mortgages): Mortgages: Transfers by Mortgagee)

  1. Methods of Transfer by Mortgagee 
    1. Endorsement of Note & Delivery to Transferee, OR 
    2. Execution of Separate Document of Assignment 
  2. "Holder in Due Course" Requirements
    1. Negotiable in Form
    2. Original Note Endorsed & Signed By Named Payee 
    3. Original Note Delivered to Transferee
    4. Good Faith
    5. For Value
  3. Effect = Holder in Due Course
    1. Not Subject to Personal Defenses 
      1. Lack of Consideration 
      2. Fraud in Inducement 
      3. Unconscionability 
      4. Waiver 
      5. Estoppel 
    2. Valid Defenses
      1. Incapacity 
      2. IllegaIity 
      3. Infancy 
      4. Insolvency 
      5. Material Alteration 
      6. Duress 
      7. Fraud in Factum 

44

Structure?

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(Contracts for Security Interests (Mortgages): Mortgages: Transfers by Mortgagor = Grantee Takes Subject to Mortgage if Mortgage Properly 
Recorded)

  1. Recording Statutes Apply to Mortgages 
  2. Liability After Transfer 
    1. Buyer Takes Subject to a Properly Recorded 
      1. Owner = Personally Liable 
      2. Buyer = No Personal Liability but Property Subject to Foreclosure
    2. Buyer Assumes Mortgage = Both Buyer & Owner Liable 
      1. Buyer = Primarily Liable
      2. Owner = Secondarily Liable

45

Structure?

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(Contracts for Security Interests (Mortgages): Mortgages: Default & Foreclosure))

  1. Possession Before Foreclosure
    1. Lien Theory = NO
    2. Title Theory = YES
  2. Foreclosure
    1. Deficiency = Judgment Against Debtor if Sale Proceeds < Loan
    2. Surplus
      1. Expenses of Sale, Attorneys' Fees & Court Costs 
      2. Accrued Interest on Foreclosed Mortgage 
      3. Junior Lienholders
      4. Mortgagor (Debtor) 
    3. Effect of Foreclosure 
      1. Junior Lienholders = Interest in Property Terminated
      2. Senior Lienholders = No Effect
    4. Priorities
      1. First to Properly Record, First in Right
        1. Exception: Purchase-Money Mortgages
          1. Purchase-Money Mortgage
      2. Subordination Agreements
      3. Equitable Subrogation
  3. Right of Redemption 
    1. Equity of Redemption (aka Common Law Right of Redemption) = Prior to Foreclosure
      1. Acceleration Clause
      2. Clog on Equity of Redemption = Void
    2. Statutory Right of Redemption = After Foreclosure

46

Structure?

  1. _
  2. _

(Contracts for Security Interests (Mortgages): Equitable Mortgage (Absolute Deed))

  1. Parol Evidence Admissible
  2. BFP Purchasers Prevail

47

Topics? (2)

(Zoning & Constitutional Protection)

  1. Eminent Domain (aka The Takings Clause)
  2. Zoning Ordinances

48

Structure?

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(Zoning & Constitutional Protection: Eminent Domain (aka The Takings Clause))

  1. Possessory Taking (Condemnation) = Always a Taking
  2. Regulatory Taking = No Reasonable Economically Viable Use
    1. Total Taking (aka "Per Se" Taking) = No Reasonable Economically Viable Use of Entire Property
      1. Government Restrictions on Development = Benefit > Burden
      2. No Requirement that the Regulations Existed When Property Acquired
      3. Temporary Denial of Use of Property = OK if Reasonable
    2. Partial Taking
      1. Penn Central Balancing Test
        1. Nature of Government Action
        2. Level of Diminution in Value of the Owner's Property 
        3. Property Owner's Reasonable Investment-Backed Expectations 
  3. Public Use = Reasonable Belief that Taking Will Benefit the Public
  4. Just Compensation = Measured by the Loss to the Owner
    1. Invalid Taking

49

Structure?

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(Zoning & Constitutional Protection: Zoning Ordinances)

  1. Zoning Destroys Economic Value of Land = Regulatory Taking
    1. Nonconforming Use
  2. Zoning Variances
    1. Undue Hardship 
    2. Public Will Not Suffer Substantial Detriment from the Variance
  3. Unconstitutional Exactions
    1. Test
      1. Essential Nexus
      2. Rough Proportionality