Property

Question 1

What is an easement?

Answer 1

An easement is the right to use land for particular purpose–often for ingress (entrance) or egress (exit)

Question 2

What is a profit?

Answer 2

A profit is the right to take specific things, such as timber, from the land

Question 3

What is a license?

Answer 3

I license results from a failed attempt to create an express easement, and is terminable at will.

Question 4

Generally define covenants and servitudes.

Answer 4

Covenants and servitudes are binding promises regarding the use of the land.

Question 5

How are remedies allocated between covenants and servitudes?

Answer 5

If the plaintiff wants to recover damages, he must sue for breach of a covenant.

If the plaintiff wants an injunction or specific performance, he will need to show an equitable servitude.

An equitable servitude is a covenant that, regardless of whether it runs with the land, equity will enforce an injunction against assignees of the burdened land that have notice.

Question 6

What is merger?

Answer 6

Whenever two successive vested estates are owned by the same person, the smaller estate is absorbed by the larger.

Question 7

What is a reversion?

Answer 7

A reversion occurs when an interest reverts back to the grantor.

Question 8

What is a possibility of reverter?

Answer 8

In a fee simple determinable, the estate will automatically revert to grantor if a specific event occurs.

note - a possibility of reverter is transferable inter vivos

Question 9

Right of reentry/power of termination

Answer 9

In a fee simple subject to a condition subsequent, the grantor may reenter land if a specific event occurs

Note, a right of reentry is not transferable inter vivos

Question 10

What is a remainder?

Answer 10

An interest where the party will take after the natural termination of a preceding estate (life estate, detail, or term of years).

Question 11

What is a contingent remainder?

Answer 11

An interest created: (1) in an unascertained person; or (2) subject to a condition precedent.

If there is no vested remainder, then there is also a reversion.

Question 12

What is the rule of destructibility?

Answer 12

In the context of a contingent remainder, if the contingency still remains at the end of the preceding estate, it will revert to the grantor

Common-law: contingent remainder is destroyed.
Modernly: rule of destructibility has been abolished. A contingent remainder becomes executory interest.

Question 13

What is the rule in Shelly’s case?

Answer 13

The grantor may not convey a freehold estate and I remainder in the grantees errors

Common-law: the interests merge. Grantee his fee simple to absolute.

Modernly: rule in Shelly’s case has been abolished. grantee’s heirs have contingent remainder. Grantor has reversion.

Question 14

What is the doctrine of worthier title?

Answer 14

Grantor may not convey an inter vivos transfer to his heirs

Exception: if grantor clearly intends to create a contingent remainder in his heirs, then he will be allowed to do so.

Question 15

What is vested remainder?

Answer 15

An interest created: (one) in an ascertained person; (two) not subject to a condition precedent.

Indefeasable vested remainder: a vested remainder in a closed class with no conditions.

Vested remainder subject to open (or partial investment): interest created in an open group where at least one person is qualified to take possession.

closing of the class (rule of convenience): if a class is still open, the open class closes once any any member takes possession. Note: a child in the womb is a member of the class.

Vested remainder subject to divestment (or complete defeasement): the interest is in an ascertained person and not subject to a condition precedent, but interest could be cut short due to a condition subsequent.

Question 16

What is an executory interest?

Answer 16

An interest in someone other than the grantor that cuts short a prior interest (it does not follow the natural termination of the preceding estate)

Question 17

What are the present possessory estates?

Answer 17

Fee simple absolute, fee tail, fee simple determinable, fee simple subject to a condition subsequent, fee simple subject to an executory interest, & life estate.

Question 18

What are the future estates?

Answer 18

Reversion, possibility of reverter, right reentry/power of termination, remainder, executory interest.

Question 19

What is a few simple absolute?

Answer 19

Absolute ownership of potentially infinite duration.

Transferability: devisable, descendible, alienable.

Future interest: none

Question 20

What is a fee tail?

Answer 20

Inheritance is restricted to lineal descendents

Transferability: owner may only alienate the estate for his lifetime. After that, the estate passes to his lineal heir.

Future interest: reversion: if the line expires (no eligible lineal heirs), it will revert back to grantor.

Remainder: if the line expires, it may go to a remainder (If specified)

Question 21

What is a fee simple determinable?

Answer 21

Mistake the continues until some specified event occurs, in which case do you stay automatically reverts back to Grant.

Transferability: devisable, descendible, alienable, but subject to condition. (Note: absolute restraints on alienation are void)

Future interest: possibility of reverter: if the specified event occurs, the estate will automatically revert back to the grantor.

Question 22

What is a fee simple subject to a condition subsequent?

Answer 22

The estate continues until some specified event occurs, in which case the grantor may terminate the estate

Transferability: devisable, descendible, alienable, but subject to condition.

Future interest: right of reentry: if the specified event occurs, grantor may retake the land (must actually enter or bring ejectment action). Note: a right of reentry may not be transferred inter vivos

Question 23

What is a fee simple subject to an executory interest?

Answer 23

The estate continues until some specified event occurs, in which case the estate passes to a third-party.

Transferability: devisable, descendible, alienable, but subject to an executory limitation.

Future interest
shifting executory interest: the estate shifts from one grantee to another grantee.
Springing executory interest: the estate shifts from the grantor to the grantee.

Question 24

What is a life estate?

Answer 24

An estate measured by the life of the grantee or a third-party.

Transferability: devisable, descendible, alienable (Only while measuring life is alive).

Future interests:
reversion: if the measuring life ends, it will revert back to grantor.

Remainder: if the measuring life ends, it may go to a remainder (if specified)

Question 25

What are the concurrent estates?

Answer 25

Joint tenancy, tenancy by the entirety, & tenancy in common

Question 26

Approach to concurrent estates?

Answer 26

1. What is the estate; 2. How is it created; 3. How was it terminated; 4. What are the duties?

Question 27

What is a joint tenancy, how is it , how is it terminated, & what are the duties?

Answer 27

A joint tenancy is coownership with right of survivorship

It is created when the four unities and express language requirements are met.

1. Unity of time: each honor receives title at the same time;
2. Unity of title: each owner receives the same title
3. Unity of interest: each owner has identical interests;
4. Unity of possession: each owner has right to possess the whole;
5. Express language: must be clear language.

Termination: a joint tenancy terminates upon:
1. Conveyance: if one party sales, this disrupts the four unities.
2. Severance and partition: a final partition decree by a court will sever unities and destroy joint tenancy. This may be brought by one party. Partition in kind: court divides property. Forced sale.
3. Mortage:
lien theory (majority): a mortgage is regarded as a lien on the title, hence a joint tenancy is not severed.
Title theory: a mortgage is regarded as a transfer of title, hence the joint tenancy is severed.

Question 28

What is a tenancy by the entirety, how is it created, how is it terminated?

Answer 28

A tenancy by the entirety is coownership with the right of survivorship between a husband and wife. This is presumed unless stated otherwise. (However, it is not recognized in community property states).

created with the four unities (of joint tenancy) and husband-and-wife taking ownership. (Note: no need for express language) tenancy by the entirety is presumed unless clearly stated otherwise.

Termination: tenancy by the entirety is severed upon joint conveyance. One cannot convey without the consent of the other. Also, no unilateral partition is permitted.

Question 29

What is a tenancy in common, how is it created, and how is it terminated?

Answer 29

A tenancy in common is coownership with no right of survivorship. (This is presumed unless clearly stated otherwise.)

Creation: tenancy in common is the default in states that are not community property states.

Termination: tenancy in common terminates anytime ownership changes. Tenancy in common interests are freely alienable.

Question 30

Generally, what concerns are raised by the rights and duties of cotenants?

Answer 30

Possession, ouster, rent, carrying costs, repairs, improvements, waste, and partition.

Question 31

What rights and duties are implicated by possession between cotenants?

Answer 31

Possession: each tenant in common has the right to possess the whole.
Ouster: cotenant wrongfully excludes another (even by merely claiming exclusive possession of a part of the property).
Adverse possession is not possible from one co-tenant to another without an ouster.

Question 32

What are the rights and duties of rent between co-tenants?

Answer 32

If any portion of the property is rented to a third-party, each co-tenant is entitled to an equal share. However, a co-tenant in an exclusive possession does not have to pay rent to others

Question 33

What are the rights and duties for carrying costs among co-tenants?

Answer 33

Each co-tenant is responsible for his fair share of the carrying costs (mortgage on land, taxes, repairs, etc.)
unilateral encumbrance occurs when one co-tenant has a mortgage on his portion of the property. Where such is the case, a creditor can only maintain a claim on that portion (may only foreclose on the co-tenant’s portion).

Question 34

What are the rights and duties with respect to repairs, improvements, and waste between co-tenants?

Answer 34

A co-tenant who pays more than her pro rata share of reasonable and necessary repairs is entitled to contribution from the other co-tenants. The co-tenant that pays for the repairs must give notice to the other co-tenants.

A co-tenant who makes improvements to property is not entitled to contribution. However, upon partition, he may be entitled to a credit equal to any increase (or liability for decrease) in value.

Co-tenants must not commit waste (voluntary, ameliorating, permissive).

Question 35

By what methods can a court partition land between co-tenants?

Answer 35

Land may be partitioned by: (1) voluntary agreement between co-tenants; (2) partition in kind (divide property) by a court; (3) force sale by a court.

Question 36

What are restraints on alienation, what types exist, and how do they apply?

Answer 36

Restraints prevent the sale and transfer of property.
Disabling restraints void any attempted transfer. They are invalid.
A Forfeiture restraint allows a grantor to terminate an estate upon conveyance. They are invalid, except possibly in lesser estates.
Promissory restraints are covenants not to alienate. They are sometimes permissible.

Generally, any direct restraint of alienation on a fee simple interest will be invalid. Equity courts have the authority to override any restraint on alienation.
In concurrent estates, reasonable restrictions limiting power of joint tenants or tenants in common to seek a partition are usually upheld.
In lesser estates, restraints on alienation are commonly upheld.

Question 37

Approach to leasehold estates?

Answer 37

(1) what type of lease; (2) is it valid (contract law); (3) who is at fault; (4) tort liabilities; (5) third parties.

Question 38

What is a tendency for years, how is it created, and how is it terminated?

Answer 38

A tenancy for years is a lease measured by a specific time.

It is created by a conveyance that specifies a number of years for the term of the lease. (Statute of frauds: any lease or surrender more than one year must be in writing: (1) identify parties; (2) describe land; (3) term of lease; (4) rent amount.)

Termination: automatically terminates at the end of the specified time. No notice is required. (Breach of tenant: landlord may terminate the lease if the tenant breaches it.)

Question 39

What is the periodic tenancy, how is it created, and how is terminated?

Answer 39

The periodic tenancy is a lease measured by successive intervals until the landlord or the tenant give proper notice of termination.

It’s creation may either be expressed or implied by rental intervals. (Statute of frauds: any intervals longer than one year must be in writing. Otherwise intervals based on payments.)

Renewal: renewal of the periodic tenancy is automatic until either the landlord or the tenant give proper notice of termination.

Termination: must give notice (usually written) equal to link of each period.
Month-month: usually 30 days, ending on the last day of the month (not the 15th).
Year-year: usually six months.

Question 40

What is a tenancy at will, how is it created, and how is it terminated?

Answer 40

The tenancy at will is a lease that may be terminated at the will of either the landlord or the tenant without notice. (Note: if the tenant has the right to terminate it at will, generally, so does the landlord. But not vice versa.)

Creation: a tenancy at will is very uncommon. Unless the parties expressly agree to it, courts will construe the tenancy to be a periodic tenancy where periodic payments are made.

Termination: lease may be terminated at any time without notice. Need only give reasonable notice to vacate.

Question 41

What is a tenancy at sufferance/hold over?

Answer 41

Tenancy that arises when a tenant wrongfully remains in possession after the expiration of a lawful tenancy. (Note: not a trespasser because original entry was rightful)

Tenant liability: tenant is liable for loss profits from wrongful holdover to removal. (Note: a holdover tenant that is holding over by mistake is still a hold over tenant)

Landlord’s options: the landlord may: (1) evict and collect damages; (2) bind the tenant to a new periodic tenancy (traditionally: year-year. Modernly: month-month).

Question 42

Generally, what are the duties of a tenant?

Answer 42

The tenant has the duty to pay rent and the duty to repair. These duties are independent of the landlord’s duties. A tenant must pay rent even if the landlord is in breach.

Question 43

What is the scope of the tenant’s duties and the remedies available to a landlord for their breach?

Answer 43

The tenant has the duty to pay rent even if the landlord is in breach. The tenant must pay rent unless the landlord breaches an implied warranty made under the lease.

When a tenant in possession breaches his duty to pay rent a landlord may: (1) evict through the courts (No selflandlord may not use self-help-May not remove tenant or tenant’s possessions. May not even change locks); (2) suit for damages.

When a tenant wrongfully vacates in breaches his duty to pay rent, a landlord may: (1) accept surrender and release tenant (Statute of frauds: surrender of an unexpired term greater than one year must be in writing); (2) sue for damages. (majority-a landlord has a duty to mitigate damages by seeking to relet the premises).

Question 44

What is the scope of the tenant’s duty to repair?

Answer 44

Unless the lease agreement states otherwise, a tenant has a duty to maintain the premises and make ordinary repairs. This includes a duty not to commit waste. The premises include:

Fixtures: a fixture is a chattel that has become part of the property. A chattel becomes a fixture when there is (1) an express agreement; (2) removal would cause substantial damage; or (3) there is clear intent.

• Non-trade fixtures: a tenant may not remove fixtures he has installed (if removal will not cause substantial harm, it is not a fixture, and may be removed). To do so is waste.
• Trade fixtures: the tenant may remove any chattels annexed to land for trade unless there has been accession: Removal would cause substantial damage (e.g., removal of beans, balconies, etc.)
• Liens on fixtures: if there is a lien on the chattel that is attached to the property, the seller retains a security interest.
• property is destroyed: no duty to reconstruct.

Question 45

What are the general duties of the landlord to a tenant?

Answer 45

A landlord must act in accord with the duty to deliver possession, the implied warranty of quiet enjoyment, the implied warranty of habitability (residential leases only), and the duty to not retaliatory evict. These duties are independent of a tenant’s duties. The landlord must comply with the duties even if a tenant is in breach.

Question 46

What is the scope of the duty to deliver possession?

Answer 46

Majority-there is a duty to deliver (1) legal title; and (2) actual possession (including removal of any holdover tenant)

Minority-there was only a duty to deliver legal title.

Question 47

What is the scope of the implied warranty of quiet enjoyment?

Answer 47

There is an implied covenant of quiet enjoyment in every lease: “use and enjoyment without interference from landlord or other party with superior title.”

Breach of the covenant of quiet enjoyment occurs upon:

• eviction (actual or partial): actual wrongful eviction by landlord or other person with superior title is a breach of the covenant of quiet enjoyment.
• Constructive eviction: (1) substantial interference attributable to a landlord’s acts/omissions; (2) notice: the tenant must give landlord notice and chance to remedy; (3) vacate: tenant must actually move out.

Question 48

What is the scope of the implied warranty of habitability?

Answer 48

In residential leases only, a landlord warrants that the premises are fit for human habitation. This cannot be waived.

Breach occurs when the premises are unfit for human habitation (bare living requirements are not met). It does not have to be luxurious-just habitable in the eyes of a reasonable person.

Question 49

What is a retaliatory eviction and when does it occur?

Answer 49

Landlord may not penalize or harass a tenant for exercising legal rights. A rebuttable presumption against the landlord exists when actions are taken against a tenant within a certain period (90-180 days) of the tenant’s actions.

Question 50

What remedies are available to a tenant when the landlord breaches his duties?

Answer 50

The tenant may (1) terminate the lease ((1) notice; and (2) vacate property); (2) sue for damages; (3) repair and deduct from rent; or (4) abate rent.

Question 51

What is the scope of a landlord’s tort liability?

Answer 51

Generally a landlord has no court liability and no duty to repair and make premises safe, except:

• Common areas: landlord must maintain common areas (hallways, stairs, etc.)
• known latent and defects: landlord must warn of any known, latent defects.
• Assumption of repairs: the landlord has no duty to repair, but once undertaken, the landlord must complete repairs with reason care

Question 52

What is the permissibility of assignments and subleases?

Answer 52

Absent contractual restrictions, generally a tenant may assign all (assignment) or part (sublease) of her interest.

Question 53

What is an assignment, how does it change liability, and how does it affect the privity between a landlord and the original tenant?

Answer 53

An assignment is a transfer of the entire remaining leasehold interest.

A landlord may sue the original tenant (secondary liability under privity of contract) and assignee (primary liability under privity of estate).

• Privity of estate: there is no privity of estate between the landlord and the original tenant. However, there is no privity of the state between the tenant and the assignee.
• Privity of contract: there is still privity of contract between the landlord and the original tenant. However, there is no privity of contract between the tenant and the assignee unless the assignee has assumed the duties under the lease.

Question 54

What is a sublease, how does it affect liability, and how does it change the privity between the parties?

Answer 54

A sublease is a transfer of less than the entire remaining leasehold interest (even all but one day).

A landlord may sue the original tenant (privity of contract) but not sublessee (no privity).

• Privity of estate: there is still privity of estate between the landlord and the original tenant. However, there is no privity of estate between the landlord and the sublessee.
• Privity of contract: they is still privity of contract between the landlord and the original tenant. However, there is no privity of contract between the landlord and the sublessee unless the sublessee has assumed duties under the lease.

Question 55

What is required for covenants to “run with the land” in a lease?

Answer 55

There is liability among all parties in privity (estate or contract) for all covenants if there is (1) notice of the covenant; and the covenant (2) touches and concerns the land.

Question 56

What are the non-possessory interests in land?

Answer 56

Easements, profits, licenses, real covenants, and equitable servitudes.

Question 57

What is an easement?

Answer 57

An easement is a grant of a property interest permitting the use of the property of another.

Question 58

What are appurtenant and gross easements and how are they distinguished?

Answer 58

An easement appurtenant is an easement that only benefits the owner and the use of his land. (dominant tenement: land benefited by easement; servient tenement: land burdened by easement).

• Transferability: easements appurtenant run with the land. It passes automatically. (Note: the burden of an easement also will run with the land!) Exception: if a bona fide purchaser of a tenement buys without notice of the easement, it does not pass. (Note: purchaser may have inquiry notice if easement is apparent)
• Duty to maintain: owner of the easement has a duty to inspect and repair.

Easements in gross: an easement that benefits the owner personally, and not in connection with the land. (Servient tenement: land unburdened by easement. There is no dominant tenement).
-Transferability: easements in gross do not run with the land. Only easements in gross used for commercial purposes are transferable.

Question 59

What are affirmative and negative easements and how are they distinct?

Answer 59

An affirmative easement is an easement that entitles an owner to make affirmative use of the servient tenement.

A negative easement is an easement preventing the owner of the servient tenement from blocking air, blocking sunlight, removing support from land in an unnatural condition, blocking streams, and (minority) blocking view. A negative easement must be created by a writing.

Question 60

What are the ways that an easement can be created and what does each entail?

Answer 60

An easement can be created by writing, implication, necessity, and prescription.

An easement may be created by a writing signed by a party to be bound (statute of frauds: an easement is an interest of land, so its creation must satisfy the statute of frauds).

An easement may be implied if the following requirements are met:

(1) conveyance from a common owner: an owner of multiple parcels sells a parcel.
(2) prior use: the previous owner continuously used the area as a quasi-easement
(3) apparent: the previous owner’s use of the area as a quasi-easement was apparent
(4) reasonably necessary: use of the quasi-easement is reasonably (for implied grants) or strictly (for implied reservations) necessary to the enjoyment of the purchased land.
- -Implied grant: an implied easement in favor of the purchaser.
- -implied reservation: an implied easement in favor of the grantor.

An easement by necessity is created where (1) there is conveyance from common ownership-an owner of multiple parcels sells a parcel-and (2) it is strictly necessary-use of the quasi-easement is strictly necessary to enter land.

An Easement by prescription is created where there is continuous, actual, notorious, open, exclusive, and hostile use for the prescriptive period.

Question 61

What are the ways to terminate an easement and what do each entail?

Answer 61

An easement may be terminated by estoppel, necessity, destruction, condemnation, release, abandonment, merger, or prescription.

Termination by estoppel occurs when the easement holder assures the servient owner that he will no longer use the easement, and the servient owner detrimentally relies on the assurance.

Termination by necessity occurs when an easement created by necessity is terminated after the necessity ends. (Note: if the easement was created by writing, the ending of necessity will not terminate the easement)

Destruction of the servient tenement will terminate the easement

Condemnation of the servient tenement will terminate a easement. (Under the modern view, the holder of the easement is entitled to compensation)

An easement is terminated by release when the easement holder conveys the easement by written instrument to the servient tenement. (Statute of frauds required)

The servient tenement may abandon the easement if there is a clear physical manifestation of intent to abandon. Neither words nor nonuse-no matter how long-is insufficient.

Termination by merger occurs when the servient and dominant tenements are owned by the same person. (Note: if later a parcel is sold, the easement is not automatically revise. Look for in-flight easement.)

Termination by prescription occurs when the servient tenant continuously, actually, notoriously, openly, and exclusively uses the easement with hostility for the prescriptive period.

Question 62

What is a profit?

Answer 62

A profit is a property interest that permits entering of servient land and taking something from it (Timber, oil, etc.). (Note: this does not include water-the right to enter land and take water is an easement).

Profits share the same rules for creation and termination as easements.

Question 63

What is a license?

Answer 63

A license is the grant of permission to enter land; it is not an interest in land. (Note: anytime an easement fails, it is a license)

Revocability: a license is revocable at will, except: (1) license coupled with an interest on the land; (2) detrimental reliance.

Question 64

What is a real covenant, what types are there, how is it created, and what remedies are available for its breach?

Answer 64

A real covenant is a promise to do or not do something related to land. (Note: a real covenant is not an interest in land)

An affirmative covenant is a covenant to do something; a negative covenant is a covenant not to do something.

A real covenant must run with the land which requires a (1) writing, (2) notice, (3) intent, (4) touch and concern, and (5) privity.

(1) writing: though not an interest in land, a real covenant must be in writing and satisfy the statute of frauds.
(2) notice: the burden will only run if the purchaser has actual or constructive notice of the covenant.
(3) Intent: the original parties must have intended that the covenant run with the land.
(4) Touch and concern: the burden must touch and concern the land.
- Yes: covenant to pay rent/taxes/dues; covenant not to compete; company to ensure building; covenant to build a structure; covenant not to bill; covenant not to assign; covenant to supply water, etc.
- no: covenant to pay taxes on another piece of land; purely personal covenants)
(5) Privity: there must be privity of estate:
- burden: need both horizontal and vertical privity for the burden to run.
- -Horizontal privity: the promissor and the promise he must have shared some interest in the land independent of the covenant (grantor-grantee, landlord-tenant, mortgagor-mortgagee, etc.)
- -Vertical privity: the successor in interest must be in privity with the assignee. (assignee obtained through contract, devise, descent, etc., but not through adverse possession)
- Benefit: need only vertical privity for the benefit to run.
- -Vertical privity: the successor in interest must be in privity with the assignee. (assignee obtained through contract, devise, descent, etc., but not through adverse possession)

Remedies: enforcement of real covenants may only be brought in a court of law (damages).

Question 65

What is an equitable servitude, how is it created, what is the remedy for its breach, and how is it terminated?

Answer 65

Equitable servitude is a restriction on the use of land and enforceable in a court of equity. (Note: an equitable servitude is an interest in land)

Generally for equitable servitude to run with the land there must be a (1) writing, (2) notice, (3) intent, and (4) touch and concern.

(1) an equitable servitude must be in writing and satisfy the statute of frauds.
- exception: an implied reciprocal negative servitude may arise if there is a common scheme. According to the common scheme doctrine, an equitable servitude may be implied if a landowner subdivides his land and places restrictions in some deeds, or in a recorded plat. A landowner whose deed does not contain the restriction may be bound by the restriction so long as made before he took title. He is deemed to have inquiry or constructive notice because it is on the deeds of the neighboring parcels. (In some jurisdictions, a landowner is not deemed to have notice of prior deeds)
(2) notice: the burden will only run if the purchaser has actual or constructive notice of the covenant.
(3) intent: the original parties must have intended that the covenant run with the land.
(4) touch and concern: the burden must touch and concern the land.

Remedy: enforcement of equitable servitudes may only be brought in a court of equity (injunction).

Equitable defenses: change in entire area makes enforcement inequitable (not a small pocket of limited change), unclean hands, estoppel, laches.

Termination: an equitable servitude may terminate in the same way as an easement or profit. Also, substantial changes in a neighborhood may terminate a restrictive covenant (original purpose cannot still be accomplished, no longer benefits area, etc.)

Question 66

What is the general approach to conveyancing issues?

Answer 66

(1) was there a land contract?
(2) was there a closing and a deed?
(3) what type of recording statute governs and did the interest at issue meet the requirements of that statute?

Question 67

What are the requirements for the formation of a land contract?

Answer 67

A contract for the sale of land must be in writing that identifies the parties, the land, and the price, and the parties to be bound by the contract must sign it. (n.b., these mirror the requirements of the statute of frauds).

Question 68

Can a court enforce an oral contract for the sale of land? If so, when?

Answer 68

Equity make enforce an oral agreement of a sale of land if two of the following three circumstances exist: (1) the buyer has paid in part of the entire purchase price; (2) the buyer has taken possession; and/or (3) the buyer/possessor has substantially improved the property.

Question 69

Who bears the risk to the land between the time of contracting and the time of closing?

Answer 69

The buyer bears the risk of damage to the land, but also acquires an unforeseen benefits of the land (oil, minerals, etc.) (A MINORITY of states hold the buyer to bear the risk only after taking possession of the land).

The seller collects the proceeds of insurance resulting from the destruction of the land between contract and closing; however, a majority of states do not follow the collateral source rule, and require the seller to deduct the amount paid by the buyer from the insurance proceeds, and collect only that amount which remains.

Question 70

To what extent does the timeliness of the delivery factor in determining whether a breach occurred?

Answer 70

Time is not of the essence in real estate contract, unless stated otherwise. Courts do not strictly enforce time provisions of a contract.

Question 71

What remedies are available to a buyer when the seller breaches?

Answer 71

The buyer may sue for damages or specific performance (because land constitutes a unique object).
Liquidated damages _________. (how?)

Question 72

What is the extent of the sellers duty to disclose any defects on the real property?

Answer 72

A seller must disclose all known latent defects. An “as is” contract does not allow the seller to conceal known latent defects.

Question 73

What is the implied warranty of marketability?

Answer 73

The seller of real property implied warrants in the land sale contract (not the deed) that the title is “good and marketable” (i.e., free from reasonable doubt) on the closing date. COMPARE:
•circumstances that cause title to become unmarketable: (1) title based on adverse possession; (2) encumbrances, easements, servitudes, mortgages, future interests, leasehold interests; (3) gap in chain of title; (4) zoning violations
•Circumstances that do not render title unmarketable: (1) zoning without violations; (2) land use restrictions; (3) seller fixes any problems until the time of closing.

Question 74

What is the implied warrant of fitness?

Answer 74

If the sale includes a new home, the builder-vendor must give implied warrant of fitness and workmanlike construction.

Question 75

What are the general requirements of a deed?

Answer 75

A deed must be (1) lawfully executed, (2) delivered, and (3) accepted.

Question 76

What is required to lawfully execute a deed?

Answer 76

A lawfully executed deed entails (1) a writing, (2) signed by the grantor, (3) an unambiguous description of the land and a good lead (?)
•When the deed contains inconsistent descriptions of the land, then monuments take precedence over metes and bounds.

Question 77

What is required for a lawful delivery of a deed?

Answer 77

The grantor must have present intent to be legally bound, and attempt to deliver the deed in person or through a third-party. An attempt to deliver is satisfactory (e.g., if a deed sent by mail that becomes lost still satisfies delivery).
•An grantor may effectively set oral conditions, so long as the grantor does not deliver the deed in person.
•A grantor that retains the power to revoke the conveyance does not constitute a legitimate delivery.

Question 78

What is required for a satisfactory acceptance of a deed?

Answer 78

Acceptance is presumed if the conveyance benefits the grantee.

Question 79

What are the different types of deeds?

Answer 79

Forged Deed: a forged deed is void, without exception.

fraudulent deed: an individual that sells a fraudulent deed to a bona fide purchaser (i.e., a buyer without knowledge of the fraud and for a legitimate amount of money), creates a legitimate deed in the bona fide purchaser (i.e., a remedy must come from the individual responsible for the fraud).

Quitclaim deed: The grantor warrants that title will be marketable at the time of closing, but not thereafter. Also, the grantor does not make any covenants in connection with the deed.

Special Warrant deed: The grantor warrants against defects that arose while he owned the land (i.e., not predecessors). Specifically, the grantor warrants that (1) he has not sold the land to another and (2) he has not encumbered the property.

General warranty deed: the grantor warrants against all defects in title, including those that arose prior to the possession of the grantor.

Question 80

What covenants come with a general warranty deed?

Answer 80

A general warranty deed contains three present covenants and three future covenants.
The present covenants are
•Covenant of seisen: the grantor warrants that he owns the property that he conveys to the grantee
•Covenant of right to convey: the grant warrants that he has the right to convey the property to the grantee
•covenant against encumbrances: the grantor warrants that the estate is free of encumbrances that would otherwise affect the title.
¢ Remedy: land unencumbered - present encumbrance.
¢ statute of limitations: begins once grantee takes possession
Future covenants are
•covenant of quiet enjoyment: the grantor warrants that a third-party will not claim lawful title against the grantee’s claim.
•covenant of general warranty: the grantor covenants to defend against all lawful claims (n.b., grantor does not have responsibility to defend against individuals that illegitimately assert title).
•covenant of further assurances: the grantor covenants to perform whatever acts reasonably necessary to perfect title.
¢ The statute of limitation starts running once someone actually brings a claim of rightful title against the grantee.

Question 81

What is the purpose of a recording system and what types of recording statutes exist?

Answer 81

The recording system provides a means of giving constructive notice of ownership through a collection of interests attached to a given piece of real property.

An individual satisfactorily records an interest depending upon the recording statute of the jurisdiction: race, notice, or race-notice.
•Race statute: first to record the interest obtains a legitimizes the interest (also the default rule when a jurisdiction does not have a recording statute).
•notice statute: The last bona fide purchaser of the interest (i.e., the last person who (1) pays value, (2) without actual notice, record notice, or inquiry notice).
•race-notice statute: The first bona fide purchase to record the interest.

Question 82

What are the different recording issues involving the chain of title?

Answer 82

Wild Deed: A wild deed is a recorded interest that has no connection to the chain of title of the relevant property. A wild deed does not give record notice.

An future interest hold that records before the grantor records the conveyance in which the grantor had the role of grantee will evade the chain of title because the recording occurs too early.

Where the recorder makes a mistake in recording an interest, the misrecorded interest is stilled deemed to give notice. The subsequent purchase who could not have discovered the misrecorded interest will acquire a cause of action against the recorders office.

Question 83

What is a mortgage and who the parties to a mortgage?

Answer 83

The conveyance of a security interest in land, intended to be collateral for repayment of indebtedness.

The person who owns the property is the mortgagor, and the person who is owed the debt is the mortgagee.

Question 84

What are the different mortgage theories?

Answer 84

In a lien theory jurisdiction, a mortgage creates a lien on the land. The mortgagor retains title to the land unless the mortgagee forecloses upon the property.

In a title theory jurisdiction, a mortgage conveys title to the mortgagee until the mortgagor pays off the debt.

In an intermediate theory jurisdiction, a mortgage entails a lien, but default automatically transfers title to the mortgagee.

Question 85

Who is responsible for paying the mortgage debt after a mortgaged property is conveyed?

Answer 85

When a mortgage exists on a conveyed property, the language of (what??) controls whether a third-party is liable for the debt.
•Subject to mortgage: a person who takes title subject to the mortgage is not personally liable for the debt, but the mortgagee can still foreclose on the debt by taking title to the land. (if the land sale contract is silent, the buyer presumptively took the land subject to the mortgage).
•Assumption of mortgage: A person that takes title to land and assumes the mortgage becomes personally liable for the mortgage and subject to a deficiency judgment if the foreclosure and sale does not satisfy the mortgage amount.

Question 86

What is a right of redemption?

Answer 86

A right of redemption allows a mortgagor in default to avoid foreclosure by paying a sufficient amount. The right of redemption exists until a foreclosure sale has taken place. (junior lien holders also have a right of redemption, presumably to protect their interest in the property; an interest lost upon foreclosure). However, some jurisdictions have a statutory redemption period that can continue even after a foreclosure sale.

Question 87

What obligations does the foreclosing mortgagee have in conducting the foreclosure sale?

Answer 87

The foreclosing mortgagee has the duty of good faith and due diligence to obtain a fair and reasonable price.

Question 88

What is the order of priority of receiving an amount from the foreclosure sale?

Answer 88

The proceeds of a foreclosure sale are distributed in the following manner:

(1) attorneys’ fees and foreclosure expenses
(2) purchase money mortgage: when a mortgagor takes out a loan to purchase the property, it takes priority over other types of mortgages (even if the others have priority of recording).
(3) senior interests
(4) junior interests
(5) mortgagor

Question 89

What is a deficiency judgment?

Answer 89

If after the foreclosure sale, the debt is not satisfied, the mortgagee may seek a judgment against the mortgagor to pay the balance of the debt. (exceptions: statutorily barred; non-recourse loan).

Question 90

What are the requirements that one must satisfy before adversely possession another’s land?

Answer 90

An adverse possessor must show by a preponderance of the evidence
(1) continuous possession (possession without interruption for the statutory period);
¢ Tacking: one adverse possessor may combine adverse possession with a previous adverse possessor if privity exists between the adverse possessors
¢ Future Interest holders do not become subject to the statute of limitations until their interest become possessory.
(2) Actual possession (possession must be as a true owner);
(3) notorious and open possession (the adverse possessor’s occupation has the sufficient apparentness that would put the true owner on notice);
(4) exclusive possession (possession occurs in spite of lack of ownership)
(5) hostile possession (the owner did not permit the occupation).

Question 91

When are oral boundary line agreements enforceable?

Answer 91

Oral boundary line agreements are enforceable if (1) a boundary line is in dispute; (2) there was an express or implied agreement about its location; and (3) the position (??) conformed to the agreement.

Question 92

What is the right to lateral support?

Answer 92

Ownership includes the right to have land supported laterally by neighboring land in its natural condition. One who withdraws lateral support from a neighbor’s land is strictly liable for damages (even if caused by somebody else??).

Question 93

What is the right to subjacent support?

Answer 93

ownership includes the right to support underneath the land. One who withdraws subjacent support from a neighbor’s land is strictly liable.