Property - Land Purchase and Sale

Question 1

What are the 2 steps in the conveyance of real estate?

Answer 1

1) The land K, which endures UNITILL… 2) The closing, where the DEED becomes the operative document

Question 2

How is risk of loss apportioned in land sales? NOTE: NY Distinction

Answer 2

The std is Equitable Conversion = once the K is signed, the buyer is the owner of he land (s/t the condition to pay purchase price at closing) At sigining, the risk of loss (i.e. destruction without FAULT) is on the BUYER (i.e. has to pay FULL K price), UNLESS the K states otherwise NY DISTINCTION: in NY so long as the buyer is w/out fault, the ROL remains with the SELLER until the buyer takes possession

Question 3

What are the requirements of the land K?

Answer 3

1) The land K must be in WRITING, signed by the would-be ∆ (p/t SOF) SOF EXCEPTION: the “doctrine of part performance”; if you have TWO of the following THREE elements, DON’T need a writing… Buyer takes possession; Buyer pays ALL or PART of the price; Buyer makes subtl improvements 2) It must describe blackacre and state some consideration? When the amt of land receited in the K is MORE than the actual size of the parcel, the REMEDY is specific performance w/ a pro rata reduction in price

Question 4

What are 2 implied promises in everyland K?

Answer 4

1) Seller promises to provide MARKETABLE title at the closing The std = the title is free from reasonable doubt (i.e. free from litigation or the threat of litigation) UNMARKETABLE TITLE = Title acq’d by adverse possession (even if just PART of title) BUT, if the seller brings a succesful c/a action to quiet title and is successful, then CAN sell Encumberances (no servitudes or mtgs UNLESS waived by buyer) [NOTE: seller has a right satisfy existing mtg w/ sale proceeds] Zoning violations (BUT not when blackacre is subject to an adverse zoning req) 2) Seller promises not to make any false stmt of material fact Seller is liable for failure to disclose LATENT material defects Even if K states a general disclaimer of liability (e.g. “property sold as is”), it wont relieve seller from liability for FRAUD or FAILURE to disclose

Question 5

Do land Ks contain implied warranties of fitness OR habitability?

Answer 5

At common law, NO! (caveat emptor) EXCEPTION: the implied warranty of fitness and workmanlike construction APPLIES to sale of a NEW home by a BUILDER vendor

Question 6

What is the purpose of a deed?

Answer 6

At closing, the deed PASSES legal title from the seller to the buyer

Question 7

What are the 4 requirements for a deed to pass legal title?

Answer 7

“L-E-A-D” = Lawfully Executed And Delivered 1) Lawful execution of the deed 2) Delivery of the deed

Question 8

What is the std for the lawful execution of a deed?

Answer 8

The std = the deed must be (1) in WRITING (signed by the grantor); AND (2) have a DESCRIPTION of the land The land description doesn’t have to be perfect, just UNAMBIGUOUS YES: “All of O’s land” NO: “Some of O’s land” NOTE: need not recite consideration, NOR must consideration pass to make a deed valid

Question 9

What is requirements for a deed to be properly “delivered”?

Answer 9

“Delivery” is accomplished… 1) When grantor PHYSICALLY transfers deed to the grantee (via the mail, agent OR messenger); 2) When the deed has been LEGALLY transfered (governed by grantor’s present INTENT); OR 3) When delivered by ESCROW (via an escrow agent once conditions are met); BUT 4) NOT when the grantee expressly REJECTS the deed NOTE: if deed (absolute on its face) is transferred to grantee with an oral condition, the oral condition DROPS OUT (it’s not provable), BUT delivery is accomplished

Question 10

What are the 3 types of deeds? NOTE: NY Distinction

Answer 10

1) The quitclaim deed (containing NO cov’ts) 2) The general warranty deed (containg 6 cov’ts) 3) The statutory special warranty deed (containing 2 cov’ts) NY DISTINCTION: in NY known as a “bargain and sale deed”

Question 11

What is a quitclaim deed?

Answer 11

A deed that conatins NO COV’TS Grantor isn’t even promising that the deed won’t have any post-closing issues (BUT the sales K has an implied promise to deliver marketable title at CLOSING) The WORST possible deed for a buyer

Question 12

What is a general warranty deed AND it’s 6 cov’ts?

Answer 12

The general warranty deed warrants against ALL defects in title, INCLUDING those due to grantors predecessors 3 present cov’ts whereSOL starts running from the instance of delivery at closing 1) Cov’t of seisin = promise that the grantor owns this estate 2) Cov’t of right to convey = promise that grantor has the pwr to trnfr (i.e. he’s under no RESTRAINT or DISABILITY like age/sound mind) 3) Cov’t against encumbrances = promise that there are NO servitudes or mtgs on blackacre 3 future cov’ts where SOL for breach does not begin to run UNTIL the breach occurs (e.g. the date of the disturbance) 1) Cov’t for quiet enjoyment = promise that grantee won’t be DISTURBED in possession by a 3d party’s lawful claim of title 2) Con’t of warranty = promise that grantor will defend grantee against lawful claims of title asserted by others (indemnification) 3) Cov’t for further assurances = promise that grantor will do what’s needed to perfect to the title in the future (post-closing)

Question 13

What is a statutory special warranty deed AND its 2 cov’ts? NOTE: NY Distinction

Answer 13

Deed that’s provided for by statute in many states, containing TWO promises that the grantor makes ONLY on behalf of himself (and NOT on behalf of his predecessors) 1) Grantor promises that he hasn’t conveyed this estate to anyone other than grantee 2) The estate is free from encumberances made by the grantor NY DISTINCTION: in NY this type of deed is called a bargain and sale deed

Question 14

What is the shelter rule?

Answer 14

Scenario: O→A (does NOT record); O→B, BFP (records); B→C (C is B’s heir, and has knowledge of O→A transaction, so NOT a BFP) Shelter rule says… C takes shelter in B’s BFP status (steps into B’s shoes). Protects B, and BFP’s right to transfer land

Question 15

What are the 2 types of recording statutes? NOTE: NY Distinction

Answer 15

2 types of jx: race notice jx (rnjx) vs. notice jx (njx) 1) Rnjx: If B is a BFP, and were are in a rnjx, B wins IF she records properly before A NY DISTINCTION: This is the rule in NY 2)Njx: the LAST BFP (B) wins regardless of who records first

Question 16

What is a bona fide purchaser (BFP)?

Answer 16

Bona Fide Purchaser (BFP) = 1) Purchases land for value; AND 2) Does not have notice of another’s claim to land “Notice” = “A-I-R” Actual; Inquiry (whatever examination of land would reveal); OR Record (properly recorded)

Question 17

How do you identify a notice statute vs. a race-notice statute?

Answer 17

1) Notice statute = “A conveyance of an interest in land shall NOT be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.” 2) Race-notice statute(NY!!) = “Any conveyance of an interest in land shall NOT be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is 1st recorded.”

Question 18

What is estoppel by deed?

Answer 18

One who conveys property in which she has no interest, but subsequently acquires an interest is estopped from later denial of the validity of the initial transfer B/t 1960-1969 X is estopped from denying the trxn; A would win during this time… BUT after 1970, when B is a BFP, he’d have title under rnjx and njx (A’s recording in 1950 is a nulltity as he recorded too early) ——————–

Question 19

What is a wild deed?

Answer 19

Scenario: O→A (does NOT record); A→ B (B records) Wild deed is a recorded deed that has a grantor (here A) unconnected to the chain of title (b/c A never recorded O→A transfer) A wild deed INCAPABLE of giving record notice to subsequent BFPs B’s recording is VOID Here, if O→C (BFP; records), then the A→B wild deed does NOT give C notice; C WINSin both rnjx ORnjx —————-

Question 20

Transfer of GIFT through Independent Agent (eg lawyer) with conditions on transfer

Question

During a family gathering, a farmer revealed that he had recently been diagnosed with a terminal illness. The farmer discussed the disposition of the family farm, which had been in the farmer’s family for several generations, with his two adult children, a son and a daughter. Both children expressed an interest in retaining the farm in the family, although both lived elsewhere. However, the daughter, who had a medical practice, indicated that she had no interest in farming the land herself. The next day, the farmer called his attorney and instructed her to prepare a deed that immediately transferred the farm to his son. Later that week in the attorney’s office, the farmer executed a valid deed in the presence of his attorney. In light of his medical condition, the attorney suggested that the farmer also make a will. The farmer indicated that he was uncertain, but that he thought that he had made a will when he was much younger. They made an appointment for the following week to review that will, if the farmer found it, and, if necessary, to draft a codicil or a will. As he was leaving, the attorney asked whether she should record the deed, the farmer instructed her to hold onto the deed and wait until after their next meeting so that he could consider everything at one time. The farmer did not discuss the existence or contents of the deed with anyone after he left his attorney’s office. The next week, on his way to the appointment with his attorney, the farmer was killed in an automobile accident. In the farmer’s car was found a will of which only the farmer was aware. The will, which had been drafted more than 20 years ago by another attorney now deceased, had been validly executed by the farmer. The will, which was made at a time during which the farmer had been estranged from his son, left the farm to his wife, who predeceased the farmer by 10 years, and named his daughter as the sole alternative beneficiary. After learning of the will, the daughter claimed ownership of the farm. In an appropriate action to determine ownership of the farm filed by the personal representative of the farmer’s estate after admission of the will to probate, will the son be entitled to ownership of the farm?

Answers

No, because the farm passes to the daughter under the terms of the will.
No, because the will was executed before the deed.
Yes, because the deed rather than the will governs ownership of the farm.
Yes, because, since the deed was executed after the will, the deed superseded the will.

Answer 20

Grantor purportedly gives property/deed to grantee through 3rd party independent agent with a condition, the deed transfer to grantee DEPENDS on grantor’s language

1. Grantor retain right to retrieve deed/revocable/absolute right to recover deed y
   - NO valid transfer exits if deed is still with independent agent
2. Grantor DOES NOT retain right to retrieve deed/irrevocable/no absolute right to recover deed
   - then key is whether the grantor inteds to make a present gift of a property interest….if so, the grantor cannot later void the gift.and, the conditional transfer is treated as creating a future property interest in the grantee
   - ex - A execute deed transfer real property to B through C (independent 3rd party) with language ‘I want B to have this property when she has her first child. Please give it to her then” no other condition in the deed itself. Since A gave C the deed with the intent of presently creating a executor interest future interest in B (future interest to someone other than grantor), B currently has an executory interest in the real property
   - Grantor transfer property on condition of gift
   - Grantor’s transfer of the deed to 3rd party must be evidence the intent to make a present gift.
   - When the grantor’s intent is that the gift itself be effective ONLY UPON the grantor’s death,the transfer can be INEFFECTIVE due to failure to comply with the reqs for a testamentary transfer (statute of will)

A transfer property to B through independent agent C with no condition is deed

Ex 1 with language - “I want B to have this property upon my deathm Please give the deed to her then”- - > EFFECTIVE TRANSFER bc A gave C the deed with the intent of presently creating a vested remainder interest in B (no prior cotingency)

Ex 2 - “I want B to have property if she outlives me” intent of making an intestamentary transfer (req that B survive A in order to take), the transfer is ineffective unless the req for a testamentary transfer is satisfied were satisfied - execution of will

Rationale:

Answer choice A is correct. Even though the deed was validly executed, it did not operate to transfer the farm to the son because the delivery requirement was not satisfied. After execution of the deed, there was neither physical delivery of the deed to the son nor a recording of the deed. Instead, because the deed remained with his agent, the farmer retained the power to revoke it. Answer choice B is incorrect because the date of execution, while important in determining priority of conflicting wills, does not determine priority between a deed with inter vivos effect and a will. A will, regardless of when it is executed during the testator’s lifetime, does not take effect until the testator’s death. Answer choice C is incorrect because, as noted with respect to answer choice A, the delivery requirement was not satisfied. Consequently, the deed was not effective to transfer the farm out of the farmer’s estate prior to his death. Answer choice D is incorrect because the fact that the deed was executed after the will does not give it priority over the will. In addition, as noted with regard to answer choice A, mere execution of a deed is not sufficient to transfer title; delivery is also required.

Question 21

Risk of Loss during the time between the execution of the contract and the closing and Casualty insurance

Question

A widower who owned his residence in fee simple absolute contracted to sell it to a couple. The contract did not require either party to acquire or maintain casualty insurance on the premises, but the widower had a casualty insurance policy in force. About a month before the closing date, the widower, who had remained in the residence, died. About a week after his death, the residence was seriously damaged by a large tree falling on the residence due to a windstorm. As a result of the casualty, the widower’s estate has received a payment from the insurer. If the risk of loss is on the couple, who is entitled to the insurance payment in an action brought by the widower’s estate to enforce the contract?

Answers

The couple, because the doctrine of equitable conversion does not apply to residential transactions.
The couple, in the form of an offset against the purchase price.
The widower's estate, because the widower did not have duty to insure the residence.
The widower's estate, because the death of the widower terminated the contract.

Answer 21

Risk of loss

• Following the logic of the doctrine of equitable conversion, BUYER has the risk of loss during the time between the execution of the contract and the closing regardless of whether the buyer takes possession of the property.
• An exception is recognized when the loss is attributable to the seller’s intentional or negligent actions.

Unless the contract requires otherwise, the seller does not have a duty to carry casualty insurance. Because the buyer has an equitable interest in the property, the buyer may obtain such insurance. When the risk of loss is on the buyer and the seller has casualty insurance, the seller is generally required to give the buyer credit against the purchase price in the amount of the insurance proceeds when a casualty occurs.

Rationale:

Answer choice B is correct. Because the risk of loss was on the buyers and the seller had casualty insurance, the seller is required to offset the amount of the insurance proceeds against the purchase price due from the buyers. Otherwise, the widower’s estate would receive a windfall, being paid the full purchase price by the couple in addition to receiving the insurance payment. Answer choice A is incorrect because the doctrine of equitable conversion applies to all transactions, residential as well as commercial. Answer choice C is incorrect because, even though the seller was not contractually obligated to insure the residence, the seller, as noted with respect to answer choice B, is not entitled both retain the insurance payment and receive the full purchase price from the buyers. Answer choice D is incorrect because the death of a party to a contract, unlike the death of an offeror, does not generally terminate a contract.

Question 22

Scope of easement and Change in Use of easement

(1) Express easement - written easement

(2) Implied easement
- Easement by necessity

• Easement by implication

(30 Easement by prescription (creation an easement similar to adverse possession but dont need exclusivity w/ trespassor and owner

Question

Many years ago, the owner of an estate gave a railroad company an easement to build, operate, and maintain railroad tracks on the estate. The written easement detailed the projected dimensions of the railroad, but it was not recorded and the tracks were never laid. Ten years ago, the owner sold the underlying property to a farmer. The deed of sale mentioned the easement. Recently, the railroad company contacted the farmer to let him know that it planned to install tracks on its easement. The tracks would be six inches wider than originally projected, as the minimum size of train cars had increased since the easement was granted. The railroad company, which had since purchased a communications company, also wanted to install a fiber-optic system on the same land covered by the easement. The farmer has refused to allow the railroad company to install the tracks and the fiber optic system. Can the railroad company install the wider railroad tracks and the fiber-optic system?

Answers

No as to both the wider railroad tracks and the fiber-optic cables.
No as to the wider railroad tracks, but yes as to the fiber-optic cables.
Yes as to the wider railroad tracks, but no as to the fiber-optic cables.
Yes as to both the wider railroad tracks and the fiber-optic cables.

Answer 22

Express easement

• Scope of express easement is first determined by actual written terms in express easement
• if terms are AMBIGUOUS–then look to the INTENT of the original parties (creator of teh express easement) which may prove ORIGINAL PURPOSE (though the new use is somewhat different than original use)
• CHANGE IN USE OF EASEMENT (when language is ambiguous) tested under REASONABLENESS STANDARD with the understanding that orginal parties contemplated both the PRESENT USE AND THE FUTURE USE

Implied Easement

• Scope of easement by necesity and easement by implication is determined BY THE NECESSITY (look at the circumstance around the easement and consider easement’s future foreseeable use
• Change in use - tested under REASONABLENESS STANDARD with the considering the circumstances with the PRESENT USE as well as any reasonable changes for THE FUTURE USE

Easement by prescription

• Scope of easement by prescription (easement though adverse possession) is LIMITED to the nature and extent of the ADVERSE USE

Rationale:

Answer choice C is correct. Although a sale of the servient estate to a bona fide purchaser (i.e., a purchaser without notice) of the easement can make the easement unenforceable, here, the farmer did have notice of the easement. Although the easement was not recorded, it was in the deed of sale. Accordingly, the farmer will be charged with having notice of the easement, and it will be enforceable against him. As to the railroad tracks, even though the railroad company’s planned use and the written easement are not exactly the same thing, the scope of the easement is the same. Changes in use are examined for reasonableness, as there is the assumption that the original parties contemplated the easement’s present and future use. Here, the railroad company wants to increase the width of the easement by a mere six inches; a court would most likely find this within the scope of the easement. As to the fiber-optic cables, however, that is likely too far outside the scope of the easement to be enforceable against either of the owners. Installing fiber-optic cables has nothing to do with operating and maintaining railroad tracks. Answer choices A and B are incorrect because they would not allow enforcement of the wider railroad tracks. Answer choice B is further incorrect because it would allow the enforcement of the easement as to the fiber-optic cables. Answer choice D is incorrect because it would allow the enforcement of the easement as to the fiber-optic cables.

Question 23

What is an easement for PROFIT

Profits cannot be created by necessity but otherwise analyzed same way as regular easement

Question

A widow held a life estate in a house and several acres of land in a semi-rural area. She lived in the house and harvested berries from the numerous wild berry bushes on the property each June. The widow personally consumed the berries or gave them away to family and friends, but did not sell them to third parties. One May, just before the berries were to be harvested, the widow died. The widow’s children, her heirs, sought to enter the land to harvest the berries, but the remainderman, the new owner, objected, claiming that he had sole right to the berries Do the heirs have the right to return and harvest the berries?

Answers

Yes, because the berries were the widow’s personal property.
Yes, because widow would have been able to harvest them had she survived.
No, because the berries grew wild.
No, because the widow did not sell the berries to third parties.

FYI -

Conveyance of Crops

Fructus industriales and fructus naturales are two types of crops that, with some exceptions, are conveyed along with the land conveyance. Fructus industriales are produced through cultivation and are considered personalty. Fructus naturales are perennial; they do not require planting because they are produced by nature alone. Title to fructus naturales passes automatically with the land because this crop is considered real property.

Generally, both fructus naturales and fructus industriales are conveyed along with the land conveyance because the owner of the land is presumed to be the owner of both types of crops. Because this presumption is based on the intent of the parties, a contrary intent may be shown to rebut the presumption

Exception - Harvested crops, or crops that have been severed from the land, are not conveyed with the land. Thus, the prior owner can remove the crops and has the right to reenter the land.

Answer 23

Profit is an easement that confers the right to enter another’s land and remove specific resources (oil, gas, minerals, timber, game)

Exclusive Profit easement

• Holder of Exclusive Profit easement has UNLIMITED and EXCLUSIVE right to take resources for profit
• May be assigned or and appointed as long as appointment is not wholly inconsistent with origibal agreement

Non-exclusive Profit easement

• Holder of Non-exclusive Profit easement right to take for profit with a LIMIT by quantity, time, or use or shared with another
• Assignable but appointment is not permitted when the BURDEN on the servient estate is INCREASED
• One stock rule - - - transferees are limited to the amt of material taken by the transferor stock and this quntity is divided by transferees

Profits cannot be created by necessity but otherwise analyzed same way as regular easement

Rationale:

Answer choice C is correct. Fructus naturales are wild crops that are not cultivated; such crops are considered real property and pass automatically with the land. Here, title to the land, including the unharvested berries, reverted to the remainderman at the time of the widow’s death. Accordingly, the remainderman has the sole right to the berries. Had the berries been fructus industriales, that is, had the widow purposely planted and cultivated the berries, would have been considered personalty. Answer choice A is incorrect because the berries were not yet the widow’s personal property; they would have become her personal property if she had already harvested them, and they would have been considered personalty had she cultivated them. However, because they grew wild, they pass with the land. Answer choice B is incorrect because, while it is true that she would have been able to harvest them had she survived, the land, including the berries, passed to the remainderman at the time of her death. Answer choice D is incorrect because what the widow did with the berries is irrelevant to the question of whether her heirs are entitled to enter the land and harvest them.

Question 24

What is a Wild Deed and Deed Recorded Late and Deed Recorded Early (estoppel by deed) as with chain-of-title problems

Type of Notice (a subsequent buyer has notice previous conveyance of deed and easements and mortgages and other liens)

• Actual Notice (personal knowledge so CANT prevail in (i) notice and (ii) race-notice juex bc didnt make purchase in as a bona fide purchaser (subsequent purchase without notice)
• Constructive Notice (note wild-deed exception) - have notice of ALL PREVIOUS RECORDED deed in chain-of-title
• Inquiry Notice - reasonable investigation would disclose the existence of prior claims

Recording Act

• Notice Jux - BFP purchase without notice of the prior interest to prevail … protect subsequent purchase against previous interest holders who FAIL to RECORD (unrecorded previous interest holders)
• -usually contain words like “in good faith” or “without notice.”

–Example of a notice statute: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law.”]

–EXAM NOTE: Remember that a bona fide purchaser need not record in order to prevail over a prior interest in a notice jurisdiction, but must record to prevail against a subsequent purchaser.

• Race-Notice Jux - reqs BOTH (i) purchase without notice of prior conflicting interest AND (ii) first to record
• • LOOK FOR FIRST IN STATUTE ALONG WITH NOTICE REQ

–EXAM NOTE: Look for words in the statute like “in good faith” in conjunction with phrases like “first duly recorded,” which are present in a race-notice statute.

Example of a race-notice statute: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice who shall first record.”

• Race Jur - purchasers who record first prevails regardless of notice of prior conflicting interest
• LOOK FOR FIRST IN STATUTE
• -Example of a race statute: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value unless the same be first recorded according to law.”

Shelter Rule

• Grantors who are protected by the recording act protect (or “shelter”) their grantees who would otherwise be unprotected.
• exception to the shelter rule is that a purchaser who is not a bona fide purchaser cannot convey to a bona fide purchaser and then buy back the property to obtain the status of a bona fide purchaser.

Answer 24

Wild Deed (deed not within the chain-of-title)

Recorded Deed/Instrument but NOT Notice bc NOT within the chain-of-title

Although an instrument is recorded and indexed in the recording office, it may not be recorded in such a way as to give notice to subsequent purchasers (i.e., the deed may not be in the “chain of title”). A deed not within the chain of title is a “wild deed.

Example 1: First, O conveys Blackacre to A, but A does not record. Second, A conveys Blackacre to B, and B records. O then conveys Blackacre to C, who has no notice of the earlier conveyances to A or B. Next, C records. Then, A records the deed from O to A. B sues A for title to Blackacre. What is the result?

i) Under a race statute, C prevails even though B recorded the deed from A to B before C recorded the deed from O to C, because the deed from A to B was a “wild deed,” outside C’s chain of title. In performing a standard title search, C would have searched in the grantor index for deeds listing O as the grantor from the date the deed granting Blackacre to O was executed to the date C recorded the deed from O to C. No deed from O to A would have been discovered in such a search, and without finding a deed from O to A, B would not be expected to look for a deed from A to B.
ii) Under a notice statute, C prevails because he had no actual notice of the conveyances from O to A and from A to B, and the deed from A to B did not give him constructive notice because it was a wild deed.
iii) In a race-notice jurisdiction, C prevails for a combination of the two reasons above: C had no actual or constructive notice of O’s deed to A, and B’s prior recording of the deed from A to B does not count because it is a wild deed.
2) Deed recorded late

Example 2: O conveys Blackacre to A, but A does not record. Next, O conveys Blackacre to B, who has actual notice of the conveyance from O to A, and B records. Then, A records. Next, B conveys to C, who has no actual notice of the O-to-A conveyance. C sues A for title to Blackacre. What is the result?

i) Under a race statute, C prevails even though A recorded the deed, because A’s deed was recorded outside C’s chain of title. Remember that under the standard title search, C would only research the grantor index under O’s name until the date that B recorded the deed from O to B. Because O’s deed to A was filed after that date, it is not considered “duly recorded” for the purposes of a race statute.
ii) Under a notice statute, C wins because C had no notice and because A’s deed was recorded outside C’s chain of title.
iii) In a race-notice jurisdiction, C wins because both notice (C had no actual or constructive notice) and race (Bc O’s deed to A was filed/RECORDED after that date that B RECORDED the deed from O to B, then A recorded deed is NOT considered “duly recorded” for the purposes of a race statute.)

Deed Recorded Early (estoppel deed)

Under the “estoppel by deed” doctrine, a grantor who conveys an interest to land by warranty deed before actually owning it is estopped from later denying the effectiveness of her deed. Consequently, when the grantor does acquire ownership of the land, the after-acquired title is transferred automatically to the prior grantee.

However, under the majority rule, a subsequent purchaser from the same grantor who takes without notice can obtain good title—despite the doctrine of estoppel by deed—in a notice or race-notice jurisdiction. The purchaser is generally required to search the grantee index for a grantor’s name only as far back as the date on which the grantor’s name appears as a grantee (i.e., the date on which the grantor acquired the property). That date is the earliest date that a grantor’s name must be searched on the grantor index for a conveyance by the grantor. The recording of a transfer made by the grantor before that date is not treated as giving the purchaser constructive notice of the transfer..

Question 25

How can a grantor transfer an interest in real property STATUTE OF FRAUD - Land sale contracts are subject to the Statute of Frauds - - Three (3) Reqs - Must be in wriing - Must be signed by the party to be charged (the grantor,dont need to be signed by grantee) - Must include essential terms (parties, description of property (no legal description req) and price ad payment type/consideration (money, financing) Two (2) Exception to Statute of Fraud (1) Part Performance (payment of all or part of price or possession by purchaser) (2) Detrimental Reliance (estoppel reasonably relied on the contract and would suffer hardship if the contract is not enforced) Question A farmer informed his best friend, who had fallen on hard times, that he wanted to give him a small farm he had recently acquired. The friend told the farmer that he would be honored to own it. The farmer had his attorney prepare a proper deed transferring the farm to his friend. The farmer signed the deed, and his signature was notarized. On his way to deliver the deed to his friend, the farmer stopped by his home for lunch. The farmer placed the deed on a small table in the entryway, along with his car keys and wallet. The farmer had lunch and then took a nap. While napping, he died. The farmer’s adult son, from whom he had been estranged for several years, claims that the deed is not valid. The friend contends that the farmer’s deed was effective to convey the farm to him. The farm is located in a race-notice jurisdiction. Did the farmer likely transfer his farm to his friend? Answers No, because the deed was not validly delivered. No, because the deed was not validly recorded. Yes, because the farmer intended to deliver the deed to his friend. Yes, because the farmer’s son had notice of the deed. Question 2 The owner of undeveloped land had his attorney prepare a deed transferring the land to his niece as a surprise. The uncle signed the deed and had his attorney record it. However, before the uncle delivered the deed to his niece, the two had a falling out. After the man’s death, the niece learned about the deed when it was found among her uncle’s papers. She transferred her interest in the land by quitclaim deed to a good faith buyer for valuable consideration. The buyer promptly recorded this deed. By will, the owner left his real property to a nephew. The recording statute in the applicable jurisdiction states: “Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is recorded.” Who owns the land? Answers The nephew, because he was the devisee of the owner’s real property. The nephew, because the buyer’s interest in the land was obtained through a quitclaim deed. The buyer, because the uncle’s deed to his niece was recorded. The buyer, because the buyer gave valuable consideration for the niece’s interest.

Answer 25

Intent to Transfer (Delivery) To transfer a interest in real property - Grantor must demo the INTENT TO MAKE A PRESENT TRANSFER OF INTEREST - - manifested through delivery of deed (deliver - - > mailing or physical handing) - - physical delivery is NOT req - - INTENT can be IMPLIED from WORDS AND CONDUCT of grantor (eg the grantor draft and record a deed) - - the interest itself MAY be a future interest such as when a parent retain a life estate in a residence and transfer a remainder interest to adult child - - if grantor KEEPS the deed, the INTENT to transfer is NOT PRESUMED, but PAROL evidence is ADMISSIBLE to establish whether grantor had the intent to make a present transfer of the property interest (same if grantor transferred the physical deed to grantee can have parol evidence to show that the did NOT intent to transfer deed eg only created a mortgage) - - parol evidence NOT ADMISSIBLE for oral conditional (a condition that does not appear in the deed) - Grantee must accept the deed/transfer, presumed to accept Rationale: Answer choice C is correct. In order to validly transfer a real property interest, the grantor must make a present transfer of the interest; this is usually demonstrated by the delivery of the deed to the recipient. However, intent can be implied from the words and conduct of the grantor, even if the deed has not been actually delivered. Here, there is significant evidence that the farmer intended to presently transfer an interest to the friend. He signed and notarized the deed. Acceptance of a beneficial transfer, such as this one, is generally presumed; in any event, the friend had indicated his acceptance of the gift. The friend is most likely correct that the deed effectively transferred the farm to him. Answer choice A is incorrect because, as noted above, delivery is not required. Failure to deliver the deed does give rise to a presumption that the grantor did not intend to make a present transfer, but that presumption can be rebutted with parol evidence. Answer choice B is incorrect because recording a deed is not a requirement for a valid deed; recording is only relevant to establish priority among various individuals who claim an interest in the land. Answer choice D is incorrect because a third party’s notice of a deed is also not a requirement for a valid deed; a third party’s notice is only relevant to establish priority. Rationale 2 Answer choice A is correct. The uncle retained ownership of the land at his death because he never delivered the deed to his niece, and thus did not complete the gift. Accordingly, the land passed by will to his nephew. Answer choice B is incorrect because the property could have been transferred by quitclaim deed if the niece had owned it. The transfer of a real property interest through a quitclaim deed does not by itself place the transferee on notice as to a problem with the transferor’s ownership of the transferred property. Instead, a quitclaim deed merely limits the liability of the transferor. Answer choice C is incorrect because, although the recording of a deed generally protects a person who buys the property from the record owner, the recording of a deed does not validate an otherwise invalid transfer. Here, since the uncle did not complete the gift to his niece by delivering the deed to her, she did not obtain ownership of the land and therefore could not sell it to a third party. Answer choice D is incorrect because, although a good faith purchaser of real property from the record owner is generally protected from other claimants to the property, in this case the record owner never obtained ownership of the land.

Question 26

What are fixtures and the rules ownerships of fixtures when conveyance of property Question A man and woman were neighbors whose small yards were separated only by small bushes. After a discussion about building a one-foot thick stone wall to separate the two properties, the neighbors agreed that the man would pay for the wall, as the woman did not have the funds to do so, and as a consolation, the wall would be built on the woman’s property so as to not reduce the square footage of the man’s yard. Years later, the woman sold her property in a valid transaction with a buyer, but she told the buyer that the man had actually paid for and built the wall and that she had agreed to keep it there. Regardless, the buyer then spoke to the man about her desire to tear down the wall to open up the space and stated that she would pay for the destruction of the wall. The man objected to tearing down the wall. May the man prevent the buyer from tearing down the wall? Answers Yes, because he has a separate security interest in the materials used to build the wall. Yes, because he paid for materials and construction of the wall. No, because the wall constituted an easement in gross. No, because the buyer validly purchased the land from the woman.

Answer 26

Fixtures is tangible personal property (chattel) that is attached to real property in a manner that it is treated as party of the real property when determining ownership of fixture and use of fixture (a wall that divides land is a fixture on the land it is on) Structures and Items Incorporated into Structures) - Structures built on real property (eg walls, dams, etc) AND the material incorporated into structures (brick in the wall or cement in dam) become part of the real property (no matter who purchase them) - - therefore THE OWNER OF REAL PROPERTY BECOMES THE OWNER OF STRUCTURE AND MATERIAL - When chattel is fixed, the Buyer of real property is generally entitled to chattel UNLESS seller reserves the right to chattel - Mortgagee (bank/lender) is entitled to chattel upon foreclosure of the mortgage unless mortgage provides otherwise Non-freehold tenants (tenants under tenancy of years or periodic tenancy) / both for Residential and Commercial Tenants / Licensees and Life Tenant - can remove fixtures that they have attached to real property IF (i) the leased property can be and is restored to it former condition after removal AND (ii) the removal and restored is made within a reasonable time (usually NOT behind the termination of the lease BUT can of (i) the termination is NOT due to a breach by the tennat and (ii) date of terminatiob is NOT foreseeable by tenant sufficiently far enough in advance to permit removal before the termination of the lease or unless equitable factor justify an extension Rationale: Answer choice D is correct. Fixtures, or structures built on real property, become part of the realty. Therefore, the wall became part of the woman’s land, which was then sold to the buyer. When the buyer bought the woman’s property, the wall, as a fixture, was included in the sale—whether the man paid for its construction or not. Absent some other legal prohibition not mentioned in the facts, the buyer could unilaterally decide to tear down the wall. Answer choice A is incorrect because once the materials were incorporated into the wall, they became an integral part of the property, and the man was not subject to any security interest in the materials. Answer choice B is incorrect because although the man paid for the wall, he had no security interest and no right to object to the wall’s destruction. Answer choice C is incorrect because the wall did not constitute an easement on the woman’s property. While easements in gross are not tied to the land, that is, they remain tied to one person, the relevant person is the owner of the dominant estate (here, the man), not the owner of the servient estate (here, the woman). Therefore, even if the wall did constitute an easement, it would benefit the man, and the buyer would be prevented from tearing it down. However, the wall would be more accurately characterized as a fixture, and therefore the buyer is the new owner of the wall.

Question 27

What is the doctrine of equitable conversion? Question A couple entered into a contract to purchase a house from the owner. The couple did not record the contract of sale. Prior to the execution of the contract, the owner incurred a debt to a creditor. Subsequent to the execution of the contract, the creditor obtained a judgment against the owner. Unaware of the contract of sale, the creditor recorded her judgment in the land records for the county in which the house was located, thereby giving the creditor a lien against property owned by the owner in the county. After the owner deeded the house to the couple and they recorded the deed, the creditor sought to execute the lien and levy on the house. The couple filed an action to enjoin the creditor from executing the lien. The applicable recording act reads: No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law. Who will prevail? Answers The creditor, because she recorded her judgment prior the couple's recording of their deed and without notice of their purchase of the house. The creditor, because she had reduced her claim to judgment. The couple, because they were protected by the recording act as purchasers for value of the house. The couple, because the doctrine of equitable conversion protected their interest in the house from the judgment creditor.

Answer 27

Under the doctrine of equitable conversion, upon entering into a contract Seller (previous owner) - - > retains a legal title to real property with right to possess the property (effectively hold the property in Trust for the buyer...trustee) Buyer (new owner) - - > has a equitable interest (beneficiary of Trust) Action/judgments against the seller arose prior to the execution of the contract - - - > NOT enforceable against real property bc seller's interest is coverted by the contract into an interest in the PROCEEDS from the sale (can obtain recovery from the proceeds obtain from seller) Rationale: Answer choice D is correct. Upon execution of the land sale contract, the couple became the equitable owners of the house; the owner merely held legal title which he was required to convey at closing to the couple. Consequently, the creditor's judgment lien which was obtained after the contract was executed was not enforceable against the house because the house no longer belonged to the owner. Answer choice A is incorrect because, although the creditor did record her interest in the property without notice of the sale of the property to the couple, the recording act does not protect a judgment creditor who is not deemed to be a purchaser for value. Answer choice B is incorrect because, while the creditor had reduced her claim to judgment, the judgment was against the owner. As such, the judgment was enforceable only against property owned by the owner. Once the contract was executed, the owner no longer was equitable owner of the house. Answer choice C is incorrect because the recording act does not protect the couple. They did not record the contract of sale and, although they did record the deed, they had constructive notice of the judgment lien because it had previously been recorded.

Question 28

What happens when either seller / buyer dies prior to enforcement of contract?

Answer 28

Seller interest is treated as personal property interest w/ the proceeds from the sell (jurs with anti-ademption statute, the devisee (transferee from will) of seller-decedent's real propery is entitled to the sale proceeds Buyer interest is treated as Real Property Interest (the will can compel the transfer of the property)

Question 29

Priority in foreclosure action w/ mortgagee (lenders/banks)

Answer 29

General rule - - > money from foreclosure ] (i) first to cost for sale (ii) balance and interest of the mortgage obligation being foreclose (iii) mortgage obligations owed to any junior interest holder (iv) any residue to debtor/mortgagor (if proceeds are insufficient, than mortgage can be granted a Deficiency Judgement) When there are multiple interest/mortgagee then the proceeds are paid out to the earlier mortgagee ... but three exceptions (1) Seller's Purchase-Money-Mortgage SPMM (loan from actual seller w/ a mortgage used to finance the purchase of the property) for both recorded and unrecorded SPMM - - - > PRIORITY OVER ALL including those 3rd party Purchase-Money-Mortgage EVEN those recorded earlier (2) 3rd party Purchase-Money-Mortgage - - > 3PMM (mortgage used to finance the purchase of the property) or both recorded and unrecorded 3PMM - - - > has PRIORITY OVER ALL OTHER NON-PURCHASE MONEY MORTGAGE even those recorded earlier (3) Unrecorded senior mortgage (one that is first in time) exception (these are non-purchase money mortgage) - - > senior mortgage is NOT given priority over junior mortgagees who PAID VALUE for the mortgage w/out actual inquiry or constructive notice of senior mortgage Foreclosure effect on interests - ALL junior interest to the mortgage that is being foreclosed ARE DESTROYED - Senior interest to the mortgage that is being foreclosed protected - -(but classification of interest is subject to recording act and subordination agreements btwn mortgagee) - - SO might not be senior if recorded improperly) - Omitted mortgagee if not a party of action - - > interest safeguarded regardless of foreclosure - Therefore purchasers at a foreclose sale take the property FREE and CLEAR of any interest created AFTER the creation of the interest being foreclosed (junior interest) AND take SUBJECT TO (no personal liable, but land is encumbered) any mortgages or liens that are SENIOR to the lien of the foreclosing party and Omitted mortgagee not a party in action

Question 30

What are the recovery for the deed warranties General Warranty - Present Covenants (i) Covenant of seisen (grantor promise he owns the estate) (ii) Covenant of right to convey (power to make this transfer) a. No temporary restraints on the right to sell b. No impairment on grantor’s capacity to sell (iii) Covenant against encumbrances.(promises there are no servitudes or mortgages on the estate) General Warranty - Future Covenants (i) Covenant for quiet enjoyment. promises that grantee will not be disturbed in possession by a 3rd party’s lawful claim of title (ii) Covenant of warranty. promises to defend grantee should there be lawful claims of title brought by others (iii) Covenant for further assurances. promises to do whatever is reasonably needed in the future to protect the title; largely ministerial Special Warranty same as general warranty deed but only makes only on behalf of himself Statutory Special Warranty deed. Provided for by statute in many states, this deed contains two promises that grantor makes only on behalf of himself—viz. grantor makes no representations on behalf of his predecessors in interest: (a) Grantor promises that he has not conveyed Blackacre to anyone other than grantee; AND (b) Grantor promises that Blackacre is free from encumbrances made by grantor (c) N.Y. Distinction  The special warranty deed is called a “bargain and sale deed” Other Covenants (BOTH APPLIES TO THE GRANTOR OF A WARRANTY DEED) After-acquired title (if grantor transfer title he does not own and subsequently gets title the the title auto vests with transferee) Doctrine estoppel by deed (deed recorded early) (prevents the grantor from asserting ownership of the after-acquired property) ...Note that had the transfer been by a quitclaim deed, these doctrines would not apply. After-acquired title and Doctrine estoppel by deed (deed recorded early) - - > Remember this are applicable w/ WARRANT DEED ONLY (not applicable in quitclaim deeds) ...Note that had the transfer been by a quitclaim deed, these doctrines would not apply. Question A niece provided live-in assistance to her uncle in his home, and the uncle promised to leave the home to her upon his death. While the uncle was hospitalized shortly before his death, the niece conveyed the home by a general warranty deed to a buyer who paid fair market value. The buyer was unaware that the niece did not own the home at the time of the conveyance. True to his word, the uncle devised the home to his niece in his will. Having second thoughts about moving out of her uncle’s home, the niece then contested the buyer’s right to home. Which of the following would provide the least support to the buyer’s contention that he is entitled to possession of the home? Answers After-acquired property doctrine. The niece’s breach of the covenant of the right to convey. Estoppel by deed doctrine. The niece’s conveyance of the home by a general warranty deed.

Answer 30

Recovery for... - Covenant of seisen and Covenant of right to convey and Covenant for further assurances lesser of (money damages) (i) Purchase price (ii) Cost of perfecting title - Covenant against encumbrances. lesser of (i) Difference btwn value btwn title with and without the defect (ii) Cost of removing encumbrance Covenant for quiet enjoyment and Covenant of warranty lesser of (i) Purchase price (ii) Cost of defending title After-acquired title and Doctrine estoppel by deed (deed recorded early) - - > transferee actually obtains the DEED/TITLE (injunction on the granor from attempting to claim title/deed)..Note that had the transfer been by a quitclaim deed, these doctrines would not apply. Rationale: Answer choice B is correct. Although the niece did breach the covenant of the right to convey (as well as the covenant of seisin), this breach gives rise to the right to monetary damages. Since the buyer is instead seeking possession of the home, this breach would not aid the buyer’s cause. Answer choice A is incorrect because under the after-acquired property doctrine, if a person (such as the niece) purports to transfer property that she does not own, the subsequent acquisition of the property by the transferor automatically operates to transfer ownership of the property to the transferee. Therefore, application of this doctrine would support the buyer’s claim. Answer choice C is incorrect because under the estoppel by deed doctrine, the niece would be estopped from denying the validity of the deed upon her subsequent acquisition of ownership of the property. This doctrine would therefore also support the buyer’s claim. Answer choice D is incorrect because both the after-acquired property doctrine and the estoppel by deed doctrine apply where the conveyance of property has been made by a general warranty deed. Therefore, the niece’s conveyance of the home by a general warranty deed prior to her actual acquisition of the property would support the buyer’s claim. Note that had the transfer been by a quitclaim deed, these doctrines would not apply.

Question 31

What is the priority between Mortgagee versus Secured Party of Fixtures - - the general rule and exception for purchase-money security interest of fixtures attached to real property (i.e., a security interest given in connection with the acquisition of the goods). Question A woman owned a vintage townhouse and planned to furnish it with fixtures from the townhouse’s era. The woman found an antique wood-burning stove, and obtained a loan from her local bank to buy it. The stove required special installation which took a week to complete. The woman then took out a mortgage on the townhouse from a national bank. The national bank recorded its mortgage later that day. The local bank did not record its security agreement. Three months later, the woman defaulted on both the security agreement and the mortgage. The national bank contends that the stove should be covered under the real property mortgage, while the local bank contends that it should be able to recover the stove. Who has a right to the stove? Answers The local bank, because it had a purchase money security interest in the stove. The local bank, because the stove was installed in a residential, and not a commercial, building. The national bank, because the local bank did not record its security interest. The national bank, because the stove required special installation.

Answer 31

- When there is a conflict between the mortgagee of real property and the holder of a security interest in a fixture attached to the real property, the general rule is that the first to record has priority. - An exception exists when the security interest is a purchase-money security interest (i.e., a security interest given in connection with the acquisition of the goods). In such cases, the secured party (purchase-money security interest) who records her security interest before or within 20 days after the goods become a fixture has priority over a prior recorded mortgage for the fixture Rationale: Answer choice C is correct. The general rule is that when there is a conflict between the mortgagee of real property and the holder of a security interest in a fixture attached to the real property, the first to record has priority over the fixture. However, there is an exception if the security interest was given in connection with the purchase of the goods (i.e., a purchase money security interest). In that case, the secured party who records the security interest within 20 days after the goods become a fixture has priority over a prior recorded mortgage. Here, the secured party had failed to file its security interest 3 months after the stove was installed, so the first to file—the mortgagee—has priority. Answer choice A is incorrect for the reasons explained above—the local bank did not record the security interest within 20 days of the fixture being affixed to the property. Answer choice B is incorrect because whether the property is commercial or residential in this case is irrelevant. While the nature (i.e., commercial vs. residential) of property is relevant for certain reasons, fixture filing and priority of interests is not one of them. Answer choice D is incorrect because whether or not the stove required special installation, the local bank still could have had priority over the national bank’s mortgage if it had recorded its interest in a timely manner. Just because the stove required special installation does not mean the stove was incorporated into the structure (e.g., as a brick is incorporated into a brick building).

Question 32

How are Judgement Liens protected under Recorded Act How are Donee protected under Recorded Act

Answer 32

Judgment liens - Creditors are protected only against claims that arise after a judgment lien against the debtor is recorded, unless otherwise indicated by statute. - However, the majority of jurisdictions protect purchasers of property at a judicial sale (SELL UNDER CTR SUPERVISION AND ALL PROPER PARTIES ARE NOTIFIED) against all unrecorded interests subject to the recording act. EXAM NOTE: Because this topic is almost always tested on the MBE, review the following example thoroughly. Example: B purchases Blackacre from A (the record owner), but B does not record the deed. C, a creditor of A, not knowing of the deed to B, then records a judgment lien against Blackacre. A judicial sale of Blackacre is scheduled. Prior to the judicial sell, A sells Blackacre to D, who promptly records the deed. In this example, C is protected against D’s claim because D purchased after C recorded the judgment lien. In the majority of jurisdictions, C is not protected against B’s unrecorded interest (which preceded the recording of C’s lien) unless C purchases Blackacre at the judicial sale (in which case C takes A’s original title). Donee Grantees who acquire title of property by gift, intestacy, or devise are not protected by the recording act against prior claims, even those who fail to record their claims to the same property....(ONLY for donee who are trying claim against PRIOR conveyed grantee...donee cant defect prior conveyed interest(conveyance before the property was donated -- note timing) - But note prior conveyed donee who recorded are protected against subsequent conveyance - - bc donee hold interest in property Question A professor made a gift of rental property to her daughter.(GIFTED FIRST TO DAUGHTER BEFORE SELL) Subsequently, the professor sold the rental property to a buyer. Prior to the sale, the professor supplied the buyer with the records that indicated the rent received and the expense associated with the property. The professor also fraudulently stated that her daughter was managing the property for her. The buyer did not directly question the daughter, who was unaware of the professor's actions with regard to the property. The day after the sale, the buyer and daughter met by chance. The daughter learned of her mother's sale of the property and the buyer learned of the gift of the property to the daughter. The next day the buyer properly recorded her deed, but not before the daughter had properly recorded her donative deed. The professor vanished with the sale proceeds. The recording act of the jurisdiction reads: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be first recorded according to law." In an action to determine ownership of the rental property between the buyer and the daughter, will the buyer be successful? Answers Yes, because the daughter received the property as a donee. Yes, because the buyer purchased the property without notice of the prior transfer. No, because the daughter recorded her deed first. No, because the buyer learned of the prior transfer before recording his deed. Rationale: Answer choice C is correct. Because the jurisdiction follows race-notice recording statute, the buyer cannot prevail if the daughter records his deed first (as is the case here). Answer choice A is incorrect because, although the recording act does not protect a subsequent grantee who is a donee from an unrecorded deed, it does protect any grantee (including a donee), who records his deed prior to a subsequent grantee recording his deed. Answer choice B is incorrect because, even though the buyer did not have actual, constructive, or inquiry notice as to the prior conveyance, the buyer did not record her deed before the daughter recorded hers. Answer choice D is incorrect because, although knowledge obtained after a conveyance does not constitute notice, the buyer lost the race to record. The foregoing NCBE MBE question has been modified to reflect current NCBE stylistic approaches; the NCBE has not reviewed or endorsed this modification.

Question 33

What are the elements of Adverse Possession? Question A homestead and adjacent land was purchased from a developer by a buyer 20 years ago. Eight years later, a homeowner purchased the homestead from the buyer. At the point of sale, the buyer erroneously indicated that, although he had not made use of the land near the creek, he was sure that the homestead extended to the stream. The buyer gave the homeowner a general warranty deed. In fact, the land adjacent to the creek was retained by the developer and never part of the buyer’s lot. Although the developer intended to build a house on the creek property and then sell it, the terrain made the cost of doing so prohibitive, and the developer has taken no action with respect to the creek property. The homeowner has maintained the creek property as if it were part of her property for the past 12 years. She has constructed a fence that encompasses both the homestead and the creek property, and has regularly mowed the grass within the fence and planted flowers each year along the creek. She has had no contact whatsoever with the developer. The applicable statutory period to acquire title by adverse possession is 15 years. In an appropriate action to determine in whom title to the creek property resides, is the homeowner likely to prevail? Answers Yes, because the homeowner acquired title to it by adverse possession. Yes, because the buyer gave the homeowner a general warranty deed. No, because the homeowner has not possessed the property for the statutory period. No, because the homeowner’s possession was not hostile.

Answer 33

ADVERSE POSSESSION Basic concept. Possession for a statutorily prescribed period of time, if certain elements are met, ripen into title Elements. C.O.A.H. - Continuous. Uninterrupted for the statutory period N.Y. Distinction The requisite statutory period is 10 years - - > MUST actual make use of property during period (no gaps to be continuous, BUT seasonal and infrequent use may be sufficiently continuous if it is consistent with the type of property that is being possessed (eg land at summer camp) - Open & notorious. The sort of possession that the usu. owner would make under the circumstances - Actual. The entry must be literal—i.e., cannot be symbolic or fictitious - Hostile. Possessor does not have the true owner’s permission to be there - Exclusive - possession cannot en shared with the true owner, although two or more people can join together to create a tenancy in common in adverse possession State of mind. M.B.E. - Possessor’s subjective state of mind is irrelevant N.Y. - Possessor must have a good faith belief (although a mistaken one) that the land he was occupying was indeed his (1) It is considered bad faith—and an impediment to a successful adverse possession claim—for the claimant to know that he is occupying another’s land Tacking. One adverse possessor may tack on to his time with the land his predecessor’s time so long as there is privity, which is satisfied by any non-hostile nexus—e.g., blood, contract, deed, will, (formal agreement with non-hostile nexus privity). - Ouster. Tacking is not allowed when there has been ouster Ex.61: O owned Blackacre in 1980 when A entered adversely; A was on her way to satisfying the elements of adverse possession when, in 1986, Mr. X ousted her; Mr. X stays on the land through 2000; our jurisdiction is a 20-year SOL, held in 2000, O owns Blackacre because the ouster defeats privity; no tacking is allowed Disabilities. The SOL will not run against a true owner afflicted by a disability at the inception of the adverse possession - Common disabilities. Insanity, infancy, imprisonment Ex.62: O owned Blackacre in 1980 when A entered adversely; in 1990 O went insane; in 2000 O recovered; the jurisdiction has a 20-year SOL; in 2000, who owns Blackacre? (1) A, assuming she has met the C.O.A.H. elements; O cannot claim the benefit of the disability because he was not suffering from it at the start of the adverse possession Rationale: Answer choice C is correct. The homeowner cannot claim title by adverse possession, because she has not satisfied the statutory 15-year period. Although the homeowner could tack any period during which an immediate predecessor in interest possessed the creek property, the buyer had not made use of the creek property during his period of ownership. Answer choice A is incorrect because, although the homeowner’s possession of the creek property was continuous, exclusive, open and notorious, and hostile, the homeowner’s possession did not extend for the required 15 years. Answer choice B is incorrect because the type of deed given by the buyer is irrelevant to the issue of adverse possession. Answer choice D is incorrect because it is a false statement. The requirement that the adverse possession be hostile merely requires that possession be without the owner’s permission, not that she be hostile. A good faith possession of the property (such as possession with the erroneous belief of ownership) can meet this requirement.