Property review

Question 1

Life tenant’s duties

Answer 1

A life tenant has the duty to pay ordinary taxes on the property, but only to the extent they receive a financial benefit from it

If they live there, financial benefit = fair market rental value

If they don’t live there, financial benefit = income derived from the land

Question 2

What happens if LT didn’t pay taxes and property passes to a remainderman

Answer 2

If the LT doesn’t pay taxes, the remainder holder may pay them in order to protect their interest, but is NOT required to do so

If the remainderman pays taxes, they can then sue the LT for what they paid, not to exceed the value of the financial benefit the LT received from the property

Question 3

Fee simple subject to an executory interest

Answer 3

A FSSEI is a present estate limited by durational or conditional language. When the condition occurs, title automatically passes to a third party who holds the future executory interest

Question 4

Effect of assigning a lease

Answer 4

When the tenant assigns the lease, the original tenant retains privity of contract and remains liable for all covenants in the lease (e.g., rent) and the assignee gains privity of estate and is liable to landlord for rent and any other covenants that run with the lease

This means original tenant and assignee may be jointly and severally liable for landlord’s entire harm arising from breach of lease

Question 5

Merger doctrine

Answer 5

Under the merger doctrine, any obligations contained in the land sale contract merge into the deed and are extinguished upon closing

These obligations are only enforceable if they are contained in the deed

Question 6

Present covenants of title

Answer 6

Seisin

Right to convey

Against encumberances

Question 7

Covenant of seisin

Answer 7

Grantor owns interest being conveyed

Question 8

Covenant of the right to convey

Answer 8

Grantor has legal right to convey interest

Question 9

Covenant against encumbrances

Answer 9

No encumbrances against interest conveyed (easements, mortgages, etc.)

Question 10

Covenant of warranty

Answer 10

Grantor will defend and compensate grantee for lawful claims made against grantee’s title

Question 11

Covenant of quiet enjoyment

Answer 11

Grantee’s possession and enjoyment will not be disturbed by another’s lawful claim of title

Question 12

Warranty of future assurances

Answer 12

Grantor will take any actions reasonably necessary to perfect grantee’s title

Question 13

Implied covenant of marketable title

Answer 13

Unless otherwise stated, an implied covenant of marketable title is part of a land sale contract, regardless of the type of deed that is created

Question 14

Merger doctrine

Answer 14

Any obligations contained in the land sale contract merge into the deed and are extinguished at closing. These obligations are only enforceable if they are contained in the deed.

a violation of a land-sale contract must be raised before/upon closing

Question 15

Doctrine of equitable conversion

Answer 15

Risk of loss is placed on the party with equitable title at the time the property was destyroyed unless the other party is at fault for the loss

majority rule

Question 17

Uniform Vendor and Purchaser Risk Act

Answer 17

Seller retains the risk of loss unless and until the buyer takes possession or title is transferred

minority approach

Question 18

Estoppel by deed

Answer 18

A grantor who conveys an interest in land by warranty deed before actually owning it is esopped from later denying the effectiveness of that deed.

When the grantor acquires ownership of the land, the after-acquired title is transferred automatically to the prior grantee

Question 19

Shelter rule

Answer 19

A person who receives a property interest from a BFP is entitled to the same protection under the recording act

BFP = innocent purchaser for value

Question 20

Equitable right of redemption

Answer 20

Allows debtor to retain property and avoid foreclosure by paying the amount currently owed on the loan plus any accrued interest before the foreclosure sale

Question 21

Statutory right of redemption

Answer 21

This right of redemption arises after a foreclosure sale. A JDX may provide this right by statute to allow additional time for the debtor to reclaim property by compensating the party who purchased the property at the foreclosure sale.

Question 22

Deed in lieu of foreclosure

Answer 22

Mortgagor conveys all interest in mortgaged property to mortgagee.

Allows the mortgagee to take immediate possession of the property without the formalities of a forelcosure sale.

Question 23

Effect of deed in lieu of foreclosure on junior interests

Answer 23

The mortgagee takes the property along with any junior interests attached to the property.

Question 24

Deed in lieu of foreclosure without reserving right to foreclose

Answer 24

If mortgagee accepts a deed in lieu of foreclosure without reserving the right to foreclose, its mortgage is extinguished

Question 25

Enforceability of express equitable servitudes

Answer 25

Enforceable if: - writing (satisfies SOF) - parties intend for it to run (bind their successors in interest) - touch and concern the land (relates to the use, enjoyment or occupation of the dominant and servient estates) - notice (person to be bound had actual, record, or inquiry notice)

Question 26

Vested remainder

Answer 26

not subject to any condition precedent **and** held by an identifiable living person

Question 27

contingent remainder

Answer 27

subject to some condition precedent (other than the natural termination of the prior estate) **or** held by an unknown/unborn person ("to my heirs, but only if they survive my friend)

Question 28

Vested remainder subject to complete divestment

Answer 28

A vested remainder is subject to complete divestment if the occurrence of a **subsequent condition will eliminate** the **remainder** interest

Question 29

Doctrine of worthier title

Answer 29

Conveyance of a life estate followed by a remainder to the "grantor's heirs" is treated as creating a reversion in fee simple to the grantor as opposed to a remainder in the grantor's heirs | minority approach

Question 30

Vested remainder subject to open

Answer 30

A vested remainder is subject to open when the remainder is granted to a class of persons whose number, identity, and share of the interest are determined in the future

Question 31

Rule of convenience

Answer 31

Closes class membership once any member of the class is entitled to immediate possession of a share in a class gift. | includes those in gestation upon closing the class

Question 32

What happens when a deed names a co-T that is void

Answer 32

The grantor retains the nonexistent co-Ts interest and becomes TIC with the other co-Ts named in the deed.