Property MBE

Question 1

What is the general rule for a contract to be enforceable when dealing with Real Property

Answer 1

must be: (1) be in writing, (2) be signed by the party to be charged, and (3) contain essential terms (including the identity of the parties, price, and a description of land).

Question 2

Part performance makes a contract enforceable if the claimant does two of the three:

Answer 2

(1) takes possession, (2) makes payment in full of a substantial part of the price, or (3) substantially improves the land.

Question 3

Who can negotiate a contract for sale of real property?

Answer 3

persons such as brokers, real-estate agents, or attorneys can negotiate contracts so long as they are in an agency relationship and have legal capacity to do so.

Question 4

What is an exclusive agency agreement?

Answer 4

The broker obtains a commission only if his agent is the procuring cause of the sale.

Question 5

What is an exclusive right to sell agreement

Answer 5

Then the broker is paid no matter who finds the buyer—even if it is the seller herself.

Question 6

What are the five steps to know during a real estate contract?

Answer 6

1. The contract of sale is signed
2. The contract must satisfy or exclude the warranty of marketable title
3. Once the contract is signed, the legal and equitable title is split
4. Closing occurs
5. Once delivery occurs, the buyer can only sue on the deed

Question 7

What does the seller of a home need to disclose during the contacting of a sale?

Answer 7

The seller of the home does not have to disclose defects unless they are not obvious, he knows or should know of them, and the defect is serious. However, the seller cannot actively conceal defects.

Question 8

What is the warranty that is implied with a new home sold by a seller-builder?

Answer 8

Implied Warranty of Fitness

Question 9

What makes title unmarketable? 4 things

Answer 9

1. Defect in the chain of title
2. Encumbrances
3. Violation of a zoning ordinance
4. Title acquired by adverse possession

Question 10

What are the 6 covenants given in warranty deeed

Answer 10

Present covenants
1. Right to convey
2. Seisin - grantor promises they own the property
3. No encumbrances

Future covenants
1. Further assurances - The grantor promises to take any steps necessary in the future to perfect the title.

2. Quiet enjoyment - The grantee will not be disturbed by someone with superior title.
3. warranty - The grantor promises to defend the grantee against lawful claims of title by others.

Question 11

When must marketablee title be given?

Answer 11

on the closing date (not before)

Question 12

What is the common law rulee for recording acts

Answer 12

First in time, first in right. One does not need to record one’s interest to have a title. However, recording acts have the power to change the common law result

Question 13

What is a notice act?

Answer 13

A subsequent bona fide purchaser (BFP) for value without notice can obtain a title that is superior to that of someone who received the property before him

Question 14

What is a race notice act

Answer 14

A subsequent BFP for value without notice, who records first, can obtain a superior title

Question 15

What is the SHELTER rule exception

Answer 15

This allows traditional grantees who are enot protected by the recording act to prevail by sheltering under the rights of those who conveyed the land to them

Question 16

What is estoppel by deed?

Answer 16

If a grantor transfers property to a grantee (when he does not have title to the property) by warranty deed and then later acquires title, the title will automatically go to the grantee unless the grantor later gives the land to a BFP

Question 17

What is title insurance?

Answer 17

Is the purchaser’s protection against unknown defects of record in the chain of title. It is not required unless contractually agreed upon

Question 18

What are class gifts?

Answer 18

Class gifts are gifts to unnamed persons. Unless otherwise stated, the class closes when any member of the class can call for a distribution

Question 19

What is Cy pres?

Answer 19

When a gift to a charity fails, the court may reform it to match the donor’s intention. There are three considerations:
(1) there must be property (or money) given for a charitable purpose
(2) it must be impossible, impracticable, or illegal to carry out the purpose; and (3) the settlor must have manifested a general intent to devote the property to a charitable purpose

Question 20

What is RAP?

Answer 20

No interest is good unless it must vest, if at all, not later than 21 years after a life in being at the creation of the interest

Question 21

What is the Uniform Statutory Rule? (RAP)

Answer 21

States that an interest is good (a) if it is valid under common law or (b) if it vests or terminated within 90 years after it’s creation

Question 22

What is needed to enforce a covenant?

Answer 22

Horizontal and vertical privity (only vertical is needed for the benefit to run)

Intent for the covenant to run

Notice of the covenant

Must touch and concern the land (makes the land more valuable)

Remedy is money damages

Question 23

What is horizontal privity?

Answer 23

A relationship between the original parties to the covenant—usually grantor and grantee, or landlord and tenant.

Required for: The burden of the covenant to run with the land (i.e., bind future owners).

Question 24

What is vertical privity?

Answer 24

A relationship between the original party and their successor in interest (the buyer or heir of their land).

Required for:
The benefit of the covenant to run with the land.

Also required (along with horizontal privity) for the burden to run.

Question 25

What is a profit?

Answer 25

A profit is the right to go onto land and take a resource away (e.g, wood, coal, etc.)

Question 26

What is a variance

Answer 26

A variance from an ordinance may be granted if the property owner shows that he has a unique hardship

Question 27

What are the pre-existing uses? (zoning)

Answer 27

Many zoning ordinances protect a preexisting use. But as soon as that property is sold to a new party, the preexisting use is no longer protected

Question 28

When can an equitable servitude be implied from a common scheme?

Answer 28

1) the owner intended to create a common scheme, (2) the intended servitude was restrictive, and (3) persons to be bound had notice of the servitude. But it cannot be enforced against lots sold before the common scheme arose.

Question 29

When does a life tenant have the obligation to pay taxes on the land?

Answer 29

When the life tenant receives a financial benefit from the property. Living on the land rent-free is considered a benefit. The financial benefit is measured by its fair rental value. If the LT doesn't live on the land, they may not have to pay the taxes

Question 30

What are the requirements for an easement by necessity?

Answer 30

created when (1) the dominant estate is virtually useless (e.g., landlocked) without the benefit of an easement across the servient estate, (2) the two estates were once a single tract of land, and (3) the necessity arose when the land was severed and the two estates were created.

Question 31

What is a license?

Answer 31

a nonpossessory right to enter and use another's land for a specific purpose. A license is freely revocable—by the licensor, upon the death of either party, or upon conveyance of the licensed property—unless the licensee detrimentally relied on it or the license is coupled with an interest