Real Prop Flashcards
(247 cards)
1
Q
What is a freehold?
A
An estate that is immobile and for indeterminate duration.
2
Q
What is a fee simple absolute/fee simple? How is it written?
A
A present estate of absolute ownership of a potentially infinite duration. Freely alienable and no accompanying future interest.
Ex: “To A” or “to A and his heirs”
3
Q
What is a defeasible fee?
A
Present estate of a potentially infinite duration, subject to termination by the occurrence of an event. Alienable, devisable, and descendible.
4
Q
What is a fee simple determinable?
A
A defeasible fee limited by specific durational language (ex: so long as, while, during, until). It automatically terminates upon happening of a stated event. Wrt future interest, grantor (or his successor in interest) retains possibility of reverter. Full ownership of the property is returned to the grantor (or his successor in interest).
5
Q
What is a fee simple subject to condition subsequent?
A
A defeasible fee that is limited by specific conditional language (ex: upon condition that, provided that, but if, if it happens that). Will terminate only if the grantor affirmatively demonstrates intent to terminate. Wrt future interest, grantor reserves right to terminate estate upon happening of a state event. Grantor must specifically retain right to reenter. If it goes to a third party, NOT a fee simple subject to condition subsequent, it’s a fee simple subject to executory interest.
6
Q
What is a fee simple subject to executory interest/limitation?
A
A defeasible fee that is limited by specific durational or conditional language. Automatically terminates upon happening of a state event, and title passes to a third party. Wrt future interest, executory interest held by the. third party (i.e., someone other than the grantor).
7
Q
What is a life estate?
A
A present possessory estate fully transferable during the measuring life (ex: “for life”). If measured by the grantee’s life, not devisable/descendible.
8
Q
What are a life tenant’s rights and duties?
A
Rights: to possess; to collect rents, lease/sell/mortgage
Duties: Life tenants are not necessarily responsible for paying the full amount of taxes assessed on the property. Life tenants have the obligation to pay all ordinary taxes on the land to the extent he receives a financial benefit from the property. When the life tenant occupies the property, his financial benefit is measured by the fair market rental value of the property. Also, obligation not to commit waste.
9
Q
What is affirmative waste?
A
When overt conduct causes a decrease in prop value.
Exception: Exploitation of natural resources not waste if i) authorized by grantor, ii) in effect when tenancy began, or iii) necessary to maintain the prop.
10
Q
Who may bring suit for affirmative waste?
A
Holder of a vested future interest may bring suit against a life tenant for damages. Holder of any future interest may bring suit against life tenant for an injunction.
11
Q
What is permissive waste?
A
When life tenant permits the premises to deteriorate through neglect, failure to preserve, or a failure to reasonably protect the prop. Life tenant must make reasonable repairs up to amount of income produced by the prop or, if in actual possession, the fair rental value.
12
Q
What is ameliorative waste?
A
When a change in use of the prop increases its value. Life tenant may alter structures on the prop when a sub and permanent change in the neighborhood makes it necessary in order to continue reasonable use of the prop, so long as the prop value is not diminished.
13
Q
What is a future interest?
A
An ownership interest in presently existing prop which may commence in possession or enjoyment sometimes in the future.
14
Q
What is reversion?
A
Held by grantor who transfers life estate or estate for years without conveying the remaining future interest to a third party. Not subject to rule against perpetuities. Alienable, devisable, and descendible.
15
Q
What is a possibility of reverter?
A
A future interest retained by a grantor when a fee simple determinable is conveyed. Alienable, devisable, and descendible.
16
Q
What is a right of reentry/right to terminate/right of entry/power of termination?
A
A future interest retained by a grantor after a fee simple subject to condition subsequent is granted. No inter vivos transfer permitted under common law, but permitted in some states. Devisable and descendible in most states.
17
Q
What is a remainder?
A
A future interest that becomes possessory upon the natural expiration of a prior estate that is created in the same conveyance in which the remainder is created. Transferable inter vivos and devisable/descendible.
18
Q
What is a vested remainder?
A
One not subject to any conditions precedent. Ascertainable grantee.
19
Q
What is a class gift?
A
A group of unspecified persons whose number, ID, and share of the interest is determined in the future.
20
Q
What is a remainder vested subject to open?
A
If at least one class member is qualified to take possession at the time of the conveyance (but less than all of them), each class member’s share is subject to partial diminution bc additional takers not yet ascertained can still vest. Once a class closes, any person who might otherwise have become a class member cannot claim an interest in the prop as a class member. Rule of convenience applies.
21
Q
What is the rule of convenience?
A
Closes the class when any class member is entitled to immediate possession, to avoid RAP.
22
Q
What is a remainder vested subject to complete divestment?
A
the occurrence of a condition subsequent will divest the remainder.
23
Q
What is a remainder contingent?
A
Created in an unascertainable grantee or is subject to an express condition precedent to grantee’s taking (bc of unknown beneficiary or known beneficiary subject to condition precedent that has not yet occurred.
Although, at common law, a contingent remainder could not be transferred inter vivos, most jurisdictions today permit such a transfer.
24
Q
What is survivorship contingency?
A
Majority: Applies at termination of interest that precedes remainder.
Minority: Requires surviving only testator, not life tenant.
25
What is an executory interest?
A future interest in a third party (not a remainder) that cuts the prior estate short upon the occurrence of a specified condition. Transferable inter vivos, devisable/descendible, and subject to RAP. Automatically comes into existence; there is no need for the third party to take any action (e.g., an eviction action).
Although at common law an inter vivos transfer of an executory interest was not permitted, today such a transfer is recognized as effective to pass this property interest.
26
What is a shifting executory interest?
Cuts short a prior estate created in the same conveyance, so the estate shifts from one grantee to another grantee upon the happening of a condition.
27
What is a springing executory interest?
Divests the grantor's interest or fills a gap in possession in which the estate reverts to the grantor.
28
What is the rule against perpetuities?
Specific future interests are valid only if they must vest or fail by the end of a life in being plus 21 years.
29
What future interests does RAP apply to?
Contingent remainders, vested remainders subject to open, executory interests, powers of appointment, rights of first refusal, and options.
RAP does not apply to a right of first refusal that is granted to a lessee in conjunction with a lease.
30
What future interests does RAP not apply to?
Those that revert to the grantor (reversion, possibility of reverter, right of reentry).
31
Requirements for the measuring life (for RAP)
Must be human. There can be more than one. If not specified, then measuring life is the life directly related to the future interest that is subject to RAP.
32
RAP tests the future interest as of the time that...
it is created.
33
What is the vest or fail requirement for RAP?
If there is any possibility that it will not be known whether the interest will vest or fail within the applicable period, then RAP has not been satisfied.
34
What happens if RAP is violated?
Except in rare cases when voiding the future interest undermines the grantor's intent, only the offending interest fails.
35
How does RAP apply to class gifts?
Bad as to one, bad as to all: If RAP voids a transfer to any class member, then the transfer is void as to all class members, even those whose interests have already vested. Hence rule of convenience. Exceptions: transfers of a specific dollar amount to each class member; transfers to a subclass that vests at a specific time.
36
Common RAP violations
1) survival beyond age 21 condition
2) fertile octogenarian
3) unborn spouse
4) defeasible fee followed by executory interest
5) conditional passage of interest
37
What is a tenancy in common
The default co-tenancy. Two or more grantees with unity of possession. No right of survivorship. Each co-tenant holds undivided interest with unrestricted rights to possess whole. Interest freely devisable/transferable.
38
What is a joint tenancy and how is it created?
Two or more persons own the prop with right of survivorship. Interest is alienable, but not devisable/descendible.
4 Unities (PITT):
1) Equal rights to Possess the whole
2) With identical and equal Interests
3) Created at the same Time
4) By the same Title
Requires express language creating a joint tenancy.
39
What does severance do to a joint tenancy?
It converts it into a tenancy in common, but only wrt the severed share.
40
What happens when there is a sale of a joint tenancy?
Don't need consent for one. It severs the joint tenancy as to seller, but remains intact for non-transferors.
41
What happens when there is a mortgage on a joint tenancy?
Severs the joint tenancy under the title theory, but not under the lien theory.
42
What happens when there is a judicial lien on a joint tenancy?
Typically will not sever the joint tenancy. But severance does occur when the prop is levied and sold.
43
What is a tenancy by entirety?
4 Unities + unity of person (parties must be married to each other when deed is executed or conveyance occurs). Neither party can alienate or encumber the prop without the consent of the other. It's recognized in about half of the states. Where recognized, majority presume a conveyance to a married couple creates a tenancy by entirety and that divorce converts it to a tenancy in common.
44
What are a co-tenant's rights wrt possessing the prop?
Each co-tenant has the right to possess the entire prop and is generally not required to pay rent when other co-tenants do not use the prop, unless the co-tenant has been ousted.
45
What are co-tenant's obligations with regard to third party rents?
Co-tenant is liable to other co-tenants for third party rents, after deducting operating expenses and necessary repairs.
46
What are a co-tenant's rights wrt collecting contribution from other co-tenants for operating expenses?
Can do so (like for taxes, for example), but if in sole possession, only if they exceed the rental value of the prop.
47
What are a co-tenant's rights wrt expenses for repairs?
Co-tenant can only compel others to share expenses for repairs if i) they are necessary and ii) co-tenant seeks accounting or partition. Co-tenant may maintain a separate action for contribution in some states if notified other co-tenants of need for the repairs.
48
What are a co-tenant's rights wrt reimbursement for improvements?
No right to reimbursement for improvements except in contribution /partition.
49
What are a co-tenant's duties to other co-tenants?
Duty of fair dealing, but no fiduciary duty. Exception: a co-tenant buys the prop at a tax or foreclosure sale; the other co-tenants can buy back their interests within a reasonable time.
Although co-tenants owe a duty of fair dealing to each other, co-tenants generally do not owe fiduciary duties to each other. However, a fiduciary obligation can be imposed on co-tenants who jointly purchase the property in reliance on each other or acquire their interests at the same time from a common source, such as by gift, will, or inheritance. Typically, these co-tenants will be related or in a confidential relationship. The primary situation in which such a co-tenant is found to have a fiduciary obligation arises when the property is sold at a tax or mortgage foreclosure sale and a co-tenant acquires the property. In such a situation, the other co-tenants have the right to reacquire their original interests by paying their due contributions within a reasonable time.
50
What are the rules around partition?
A tenancy in common or joint tenancy, but not a tenancy by entirety, generally has the right to unilaterally partition prop. A partition in kind--a physical division of the prop--is preferred by courts.
51
What does the FHA do?
Prohibits discrim in renting/selling, terms, refusing financing, etc.
52
Exceptions to FHA
Owner-occupied buildings with no more than four units (including the owner's unit) and single family homes sold or rented without a broker. But they are still subject to advertising rules.
53
What law do you apply when there is a conflict of laws? Exceptions?
Law of the situs in real prop cases (i.e. state where real prop is located).
Exceptions: document (instrument, will) specifies applicable law; certain issues involving marriage; mortgage notes; foreclosure-related rights
54
What is a tenancy year for years?
For any fixed period of time. Automatically terminates at the end of the term without notice required. May be terminated before the end of the term (e.g., breach of lease covenant gives rise to right to terminate). Created by express agreement. If term longer than one year, SOF applies--written lease signed by party to be charged must ID parties, premises, lease duration, and rend to be paid. Any right to renew the agreement must be explicitly set out in the lease.
Termination may also occur before the expiration of the term when the tenant surrenders the leasehold, and the landlord accepts the return of the leasehold. When a tenant abandons the leasehold without justification, the landlord may treat the abandonment as an offer of surrender and could accept that surrender by retaking the premises.
55
What is a periodic tenancy?
Repetitive, ongoing estate by set periods of time with no predetermined termination date. Term may be fixed by the parties or by their actions. Auto renews at the end of each period unless valid termination notice. SOF does not apply unless initial term exceeds one year. Created by express agreement, implication (no mention of duration), or operation of law (holdover tenant). Termination notice must be given before last period begins. Late notice is effective by the next period. Generally effective as of the last day of the period. Oral notice sufficient under CL, but most states now require some writing.
A landlord can create a periodic tenancy by accepting a tenant’s tender of a rental payment after the expiration of the lease. A landlord, by accepting rent after the termination of a lease, creates a periodic tenancy, even when the prior tenancy was a tenancy for years.
56
What is a tenancy at will?
Does not have specific term. Continues as long as L and T want. Created by express agreement or by implication. May be terminated by either party. At CL, no notice required, but L must give T reasonable time to vacate. Most states now require notice. May also be terminated by operation of law.
If only one party is expressly given the right to terminate the leasehold, the lease may, when taking into account all other circumstances, be unconscionable. In such a case, either party is given the ability to terminate the lease. landlord is not granted an implied right of termination when a lease expressly gives a tenant the right of termination but is silent as to the landlord.
57
What is a tenancy at sufferance (holdover tenancy)?
T wrongfully remains in possession after the expiration of a lease. T is bound by terms of the lease that existed before expiration, including payment of rent. Tenancy lasts until T vacates, L evicts T, or L elects to hold T to periodic tenancy.
58
What are a tenant's duties wrt paying rent?
Duty to pay unless premises destroyed (lease terminated and tenant excused), or material breach by landlord.
59
What are tenant's duties wrt waste?
Affirmative waste: T prohibited from committing voluntary waste.
Ameliorative waste: T may make changes to physical condition of prop that increase the prop value if reasonably necessary for T to use prop in reasonable manner, unless L and T agree otherwise.
Permissive waste: Unless relieved by lease, statute, or ordinance, T has duty to repair the premises to keep it in its pre-rental condition. No duty to repair normal wear and tear, unless L and T agree.
60
Who is liable for repairs--landlord or tenant?
Except for T damages, L must repair for residential but not for commercial leases. For non-residential leases, T may be contractually liable for all damages to prop unless caused by L.
Residential: Under the common law, there was no implied duty on the part of the landlord to repair leased premises. However, the majority of jurisdictions today enforce an implied duty upon the landlord to repair under a residential lease, even when the lease attempts to place the burden on the tenant, except for damages caused by the tenant.
Commercial: In contrast, courts are reluctant to imply a landlord’s duty to repair in commercial leases because the implied warranty of habitability does not apply in commercial leases.
61
What remedies does L have if T fails to pay rent?
Majority: L can sue for damages and evict and terminate lease.
No anticipatory repudiation in most states. Where it is allowed, damages limited to diff btw future rent under lease and either i) reasonable rental value or ii) actual rent collected from re-letting???? BUT OTHER SOURCE SAYS doctrine of anticipatory breach does not apply to leases. While the landlord may sue the tenant for rent as it becomes due, a landlord may not sue for future rent under the lease.
Wrt late rent: L entitled to damages. Whether L can sue to remove depends on if breach is material or L waived right to evict by accepting late rent.
62
What are L's remedies if T abandons prop?
Treated as offer to surrender rights under lease. If L accepts the surrender, lease terminates and T liability for future rent ends. If L rejects surrender, T remains liable for rent, but under majority rule, L has duty to mitigate damages.
63
What are L's remedies wrt a holdover T?
L can accept holdover tenant as periodic tenant or tenant at sufferance or sue after notice to vacate.
64
What are L's duties to T wrt possession?
L must deliver actual physical possession or no obligation for T to pay rent.
65
Does L owe T a warranty of some kind?
Yes--for residential props, a warranty of habitability: premises must be fit for basic human habitation (health/safety).
66
What happens if warranty of habitability breached btw L and T?
T must notify L of defect and give reasonable time to repair, and then T can refuse to pay rent; make reasonable repairs and deduct cost from future rent; or remain in possession, pay rent, and seek damages.
67
Are there any covenants btw L and T?
Yes--covenant of quiet enjoyment (for commercial and residential). T has right to quiet use and enjoyment of the premises without interference from L. L has duty to control other tenants' nuisance in common areas.
the covenant of quiet enjoyment is breached only when the landlord, someone claiming through the landlord, or someone with superior title disrupts the possession of the tenant.
68
What happens if covenant of quiet enjoyment btw L and T breached--actual?
Actual: If L excludes T from premises, then lease is terminated and T's obligation to pay rent ends.
69
What happens if covenant of quiet enjoyment btw L and T breached--partial?
Partial: T excused from paying rent for L's partial eviction, but must pay reasonable rental value if partial eviction by third party with superior claim. T not excused from paying rent for partial eviction by adverse possessor/trespasser.
70
What happens if covenant of quiet enjoyment btw L and T breached--constructive?
Constructive: Substantial interference caused by L's actions or failure to act. T must give notice of problem. If L fails to respond, T must vacate premises within reasonable time after L fails to fix problem.
71
What happens if covenant of quiet enjoyment btw L and T breached--retaliatory?
Retaliatory: L may not evict a residential T for reporting housing code violations or refusing to pay rent when L breaches the warranty of habitability (defense not available to T in arrears).
72
How is security deposit amount set?
Amount and terms usually set by state statute
73
What happens to your security deposit?
Usually retained in an escrow account and must be promptly returned at the end of the lease, absent an explanation for retaining it.
74
What are T's possible tort duties/liabilities?
Duty of care to invitees/licensees/foreseeable trespassers and may be liable for dangerous conditions/activities.
75
What are L's possible tort duties/liabilities?
CL: Liable for injuries in common/public areas, non-common areas under L's control, or from hidden defect/faulty repair by L or L's agent.
Modern trend: General duty of reasonable care. Liability for defects existing prior to T's occupancy, failure to make required repairs, and crim activities of third parties who injure Ts.
76
What is an assignment and a partial assignment (of a lease)?
Complete transfer of T's remaining lease term.
Partial assignment: Transfer of a physical portion for remaining lease term.
77
What is a sublease?
Any transfer for less than the entire duration of the lease.
78
What is a lease assignee liable for?
Liable to L for rent/covenants running with lease.
79
Is lease assignee in privity with L and what kind?
Yes--privity of estate, thus they are liable to the landlord for the rent and any other covenants in the lease that run with the lease.
80
What happens if assignee-T reassigns lease?
Privity of estate with L ends and subsequent T is now in privity with L.
81
What is a sublease tenant liable for?
Not liable for rent/covenants in lease to L. Liable to original lessee. Unless sub-T expressly assumes covenants, then personally liable to L.
82
Is a sublease tenant in privity with L and what kind?
No, not in privity of estate or contract with L.
83
Can sublease tenant enforce any covenants?
Can enforce all covenants made by original lessee in sublease, but not any made by L.
84
What is original tenant still liable for in a sublease or assignment situation?
Liable for lease covenants unless novation by L.
85
What kind of privity exists btw original tenant and landlord after a sublease or assignment?
Assignment: Privity of estate ends. Still in privity of contract (unless novation?).
Sublease: Privity of estate does not end. Still in privity of contract (unless novation?).
86
Can landlord assign lease rights? If so, what happens?
Generally L may assign lease rights to a third party, butL remains liable to T for all covenants in the lease. T must pay rent to assignee-L and obey lease covenants. Assignee-L must perform any burden imposed by lease covenant.
87
What is attornment?
T's acknowledgement of a new L. Usually arises automatically upon payment of rent to assignee-L or notice to T, but formal acknowledgement of an assignee-L's ownership may be required in commercial leases.
88
What happens if a lease prohibits assignment/subletting by a T? When can L withhold permission to grant assignment/sublease?
T can still do either, but L can terminate for breach and recover damages.
L can only withhold permission to grant assignment or sublease on reasonable grounds in relationship to the prop being leased and not on a whim or personal prejudice.
89
What is a listing broker?
Helps set the asking price and advertises the prop. Seller's agent. Generally shares commission with selling broker.
90
What is a selling broker?
Subagent of the listing broker. Finds a buyer. Generally shares commission with listing broker.
91
What is a dual agent?
Reps both buyer and seller. Prohibited in many jx.
92
What are the SOF requirements for a land sale contract?
Under the Statute of Frauds, a land sales contract must:
(i) be in writing,
(ii) be signed by the party to be charged, and
(iii) contain all of the essential terms (i.e., parties, property description, terms of price and payment).
93
Does SOF apply to other prop interests like assignments and options regarding the purchase of real prop?
Yes
94
Does SOF apply to leases under 1 year?
No. Just to leases over one year?
95
Does a deed need to satisfy SOF?
No
96
What are the SOF exceptions for land sales?
1) Part performance
2) Detrimental reliance
3) Admission
97
What counts as part performance wrt a land sale?
Most jx require 2 of the following:
1) Buyer takes possession of land
2) Buyer remits all or part of the purchase price, and/or
3) Buyer makes sub improvements
98
What happens if there is detrimental reliance on a land sales contract?
Specific perf permitted when party seeking enforcement has reasonably relied on K and would suffer hardship.
99
What does marketable title mean?
Title free from defects or unreasonable risk of litigation.
100
When must seller deliver marketable title?
Seller generally not required to deliver marketable title until closing.
101
What happens if there is a title defect?
Seller can use sale proceeds to pay off an existing mortgage, eliminating the related title defect???
Buyer can rescind/recover out-of-pocket and earnest money payments, sue for breach, or sue for specific perf with an abatement of purchase price.
Buyer must give seller time to cure the title defecT??
102
What happens if a party misses the closing date and is late?
Time of the essence is not enforced unless it's part of the contract (express/implied), but party failing to perf on closing date is in breach.
103
Is there a warranty of fitness or suitability on a land sale? And what is it?
A builder or other commercial seller of a newly constructed residence gives a warranty of fitness or suitability to the buyer. When this warranty is not mandated by statute, the courts have implied such a warranty. The warranty covers material defects that could not have been uncovered by the buyer through a reasonable inspection prior to purchase.
Only for new homes. Warrants use of adequate materials and workmanship. Includes latent construction defects.
104
What duty to disclose does a seller have?
Duty to disclose defects. Applies to all homes. Seller must disclose all known material physical defects not readily observable.
105
What happens if one party in a land sale repudiates?
Non-repudiating party excused, but buyer must give seller sufficient time to cure the title defect?
106
What happens to land sale contract obligations after deed delivered?
They merge into the deed upon delivery unless obligations collateral to/independent of conveyance.
107
What are remedies for a breach of a land sale contract?
Damages: Diff btw K price and market value. Some jx limit to B's out of pocket expenses if S unable to deliver marketable title but acted in good faith.
Specific performance: Mutuality of remedies?
Generally, deposit of no more than 10% of the purchase price have been found to be reasonable liquidated damages, but courts may consider factors relating to the transaction or refuse to enforce liquidated damages clauses when S suffers no actual loss. When K silent, courts consider same factors and usually allow S to retain deposit when reasonable. There is not a specific percentage below which such a provision will be enforceable.
108
What is each party's interest in the land and who bears risk of loss if land is destroyed at diff points in the land sale?
S's interest is converted by K into interest in proceeds of sale not in RP. Once K is signed, B is owner of land subject to condition he pay the purchase price at closing, but in interim btw K and closing, B bears risk of loss if land is destroyed.
109
Are options and rights of first refusal subject to SOF?
Yes
110
What the elements of adverse possession?
1) Continuous/uninterrupted
2) Actual
3) Hostile
4) Exclusive
111
What does continuous/uninterrupted mean wrt adverse possession?
Through statutory period (CL: 20). Seasonal use ok if consistent with prop type. Tacking permitted, but no gaps and via non-hostile connections only (ex: descent, devise, contract, deed).
112
What does actual mean wrt adverse possession?
Actual entry giving exclusive possession that is open/notorious, but if only actually possess portion of prop, constructive adverse possession gives title to whole.
113
What does hostile mean wrt adverse possession?
Must possess the land without the owner's permission.
Majority: Ignore subjective intent. Instead, must show objective intent to claim land as own.
Minority: Consider subjective intent. Good faith jx: must believe the prop is unowned or that he owns it. Bad faith jx: aggressive trespass.
114
What does exclusive mean wrt adverse possession?
Possession cannot be shared with the true owner, but 2 or more people can adversely possess as tenants in common.
115
What is a deed?
Legal instrument that transfers ownership.
116
Requirements for a deed transfer
At time of transfer, grantor must intend to make present transfer of prop interest to grantee. Typically intent shown by delivery of the deed.
Execution and recording creates a rebuttable presumption that the deed is to be presently operative.
Parol evidence admissible to establish intent when grantor keeps deed.
117
Is transfer of a deed to a grantor's agent delivery?
No? But by giving the deed to a third party without reserving the right to reclaim the deed, the owner effected delivery of the deed??
118
Is transfer of a deed to grantee's agent delivery?
Yes
119
What if grantor transfers deed to a third party with a condition? Is that delivery?
Not delivery if grantor keeps absolute right to recover the deed. But if he doesn't, then treated like a future prop interest.
120
What if a grantor conditions deed transfer upon death?
Grantor must intend to make a present gift??
121
When is acceptance of a deed presumed?
For beneficial transfers
122
Valid deed requirements
1) Identified parties
2) Grantor's signature (But an agent may execute a deed on behalf of a principal-grantor. An otherwise valid deed that is signed by the agent with only the name of the principal is a valid deed if the agent had authority to sign.)
3) Words of transfer
4) Reasonably definite prop description (extrinsic evidence admissible)
123
What is the equal dignities rule?
Agent may execute deed, but agency authorization for real estate Ks must be in writing.
However, this rule does not apply to a person whose only act is signing a specific deed at the grantor’s request (i.e., an amanuensis).
124
What is a notice recording act?
Purchaser for value without notice of prior interest prevails over prior grantee who failed to record. Must record against subsequent purchaser.
125
What is a race recording act?
First to record prevails, regardless of knowledge of prior conflicting interests.
126
What is a race-notice recording act?
Subsequent purchaser for value without notice protected only if he takes without notice and is first to record.
127
Wrt recording acts, when is notice tested? What is the effect of transferring the deed?
Tested as of time of the conveyance. Notice obtained after conveyance does not prevent purchaser from benefitting from recording.
Although grantees who acquire title to property by gift, intestacy, or devise are not protected by the recording act against prior claims, grantors who are protected by the recording act protect (or “shelter”) their grantees who would otherwise be unprotected.
128
What counts as notice wrt recording acts?
Actual, inquiry (reasonable investigation), constructive (properly recorded and appears in chain of title)
129
What is a general warranty deed?
Present covenants:
1) seisin: grantor owns land as described in deed
2) right to convey: grantor has right to transfer title
3) against encumbrances: no undeclared encumbrances against land
Future covenants:
4) quiet enjoyment: grantee not disturbed in possession by third party's lawful claim
5) warranty: grantor will defend grantee against third party's claim
6) further assurances: grantor will do whatever future acts reasonably necessary to pass title if later determined title is imperfect
130
What is a special warranty deed?
Same covenants of title as general warranty deed, but only warrants against defects arising during the time grantor has title.
131
What is a quitclaim deed?
No covenants of title
132
What is a mortgage?
An interest in real prop that serves as a security for an obligation.
Creditor can foreclose by judicial proceedings which terminate junior interests (subordinate interests must be joined or remain on land?? and B takes subject to senior interests).
133
Must a mortgage satisfy SOF?
Yes
134
What is the lien theory for mortgages?
Majority view. Debtor/mortgager has title and right to possession until foreclosure and creditor/mortgagee has lien and right to land if there is default.
Lien stays on land if mortgage instrument properly recorded??
135
What is a deed of trust?
A mortgage alternative. Trustee holds title for beneficiary (lender). Mortgagee-lender cannot purchase prop at a non-judicial foreclosure sale, but a beneficiary-lender can.
136
What is an installment land contract?
A mortgage alternative. Seller retains title to real prop until buyer makes final payment.
137
What is an absolute deed?
A mortgage alternative. Transfers unrestricted title to real prop. May actually be a disguised mortgage if an obligation is created contemporaneously with the transfer.
138
What is a conditional sale and repurchase?
A mortgage alternative. Real prop sold and then leased back to seller. If the lease is for a long time with. the option to repurchase, may be a disguised mortgage.
139
What is the effect of a transfer on a mortgage? What is everyone's liability?
Unless lender agrees to release, borrower remains liable after transfer of real prop.
If transferee assumes mortgage, then borrower is secondarily liable (i.e., if borrower makes payment, she can seek reimbursement from transferee). But borrower may be relieved of liability if lender impairs borrower's right of recourse against transferee by modifying loan terms or releasing transferee of liability or if lender releases or impairs the real prop subject to the mortgage.
If transferee assumes mortgage, transferee is personally liable for mortgage obligation. If transferee takes real prop "subject to" mortgage, then transferee is not personally liable upon default, but real prop may be sold at a foreclosure sale.
140
What is a due-on-sale clause?
Lender can demand immediate payment of full amount due in case of a transfer.
141
What is a due-on-encumbrance clause?
Lender can accelerate mortgage upon second mortgage.
142
What are a mortgagor and mortgagee's pre-foreclosure rights/duties?
Mortgagee: In a lien theory state, cannot take possession before foreclosure. In a title theory state, theoretically entitled to possession at any time (but typically cannot take possession until default by mortgage terms). As such, the mortgagee can make repairs, take rent, prevent waste, and lease out vacant space.
Mortgagor: Has duty not to commit waste. Equity of redemption.
143
What is equity of redemption?
After default but before foreclosure sale, mortgagor may regain title by paying amount of loan obligation currently owed, plus interest. Can be the full amount of unpaid loan if there is an acceleration clause.
144
What is foreclosure?
Mortgagee takes real prop when mortgagor defaults (i.e., no payment)
145
What are the diff methods for foreclosure?
Judicially supervised sale, private sale, or strict foreclosure
146
What are the priority rules around a mortgage, including exceptions?
If 2+ mortgages, foreclosure terminates junior interest and has no effect on senior.
First in time, first in right.
Purchase-money mortgage exception: mortgage used to purchase real prop generally has priority over others.
Recording act exception: Mortgages subject to general recording act, so a recorded interest may take priority over an unrecorded one.
Other exceptions: Subordination agreements, mortgage modifications and replacements, future-advances, after-acquired prop.
147
What is the effect of a foreclosure sale on all involved parties?
Mortgagor: interest eliminated
Purchaser of real prop: takes prop free of junior interest, subject to senior
Senior interests: unaffected
Junior interests: destroyed
148
How is an express easement created?
Affirmatively created by parties in writing that satisfies SOF. By grant or by reservation.
149
What is an implied necessity easement?
Created when prop is virtually useless without benefit of easement across adjacent prop. Dominant/servient estates must be under common ownership and necessity must arise when estates severed. Access involving other prop does not preclude easement by necessity when the owner of dominant estate dose not have legal right of access through the other prop.
150
What is an easement by implication?
If easement previously used on servient estate by earlier owner, court implies intent for easement to continue if prior use was continuous, apparent or known, and reasonably necessary to dominant estate's use/enjoyment, the estates were once under common ownership, and a quasi-easement existed at severance. May also be implied from a subdivision map or plat.
151
What is an easement by prescription?
Continuous, actual, open and hostile for statutory period (CL: 20).
152
What is an easement by estoppel?
Good faith, reasonable, detrimental reliance on permission by servient estate holder, issued to prevent unjust enrichment.
153
What is a negative easement?
Prevents owner from using land in specific ways. Must be expressly created by writing signed by grantor, and usually only recognized for light/air/support/stream water from artificial flow.
154
What is an easement appurtenant?
Benefit transferred automatically with dominant estate.
155
What is an easement in gross?
Benefits individual/legal entity, not real prop, and usually commercial easements freely transferable to third party.
156
How do courts assess easements?
They look to reasonableness of use and intent of original parties. Ambiguities are resolved in favor of grantee.
157
How can an easement be terminated?
1) Release
2) Merger (of the two estates)
3) Severance
4) Abandonment
5) Destruction/condemnation
6) Prescription
7) Estoppel
158
What are the requirements for a release of an easement?
Must be in writing that satisfies SOF
159
How can an easement be severed?
Severed by attempt to convey appurtenant easement separate from land it benefits.
160
How can an easement be abandoned?
Owner affirmatively acts to show clear intent to abandon right. Statements of intent without conduct and mere non-use are insufficient to extinguish easement right.
161
Is an express easement not recorded against servient estate terminated against BFP?
Not terminated, but may be unenforceable under recording act?
162
Who has the right and duty to maintain the easement?
The easement owner.
163
Can easement owner seek contribution from co-owners of the easement for repairs?
Yes, after notice and opportunity to participate in repair decisions.
164
Can holder of easement enter servient land and take from it soil or some substance of the soil such as mineral, timber, and oil?
Yes??
165
What is a license and its features?
A privilege to enter another's land. Freely revocable unless estoppel (may result in easement by estoppel). Does not need to satisfy SOF. Invalid oral easements may create license. Generally, a license is revoked upon the transfer of the servient estate. Although a license may not be revoked if detrimentally relied upon.
166
Does a license need to satisfy SOF?
No.
167
Invalid oral easements may create...
A license
168
What are the elements/requirements of a real covenant?
1) Writing
2) Intent
3) Touch/concern
4) Notice (for burdens only)
5) Privity
169
Must a real covenant comply with SOF?
Yes
170
Describe the intent requirement of a real covenant
Must have intent for rights/duties to run with land through explicit language or implied through TOC
171
What is the touch/concern requirement of a real covenant?
The benefit or burden must affect promisee/promisor as owners of land.
Negative covenants: Run with the land if they restrict the owner's use or enjoyment of the land.
Affirmative covenants: Run with the land if they require the owner to do something related to the use and enjoyment of the land.
172
What is the notice requirement for real covenants?
Only applies to burdens. Must be constructive or actual.
173
What is horizontal privity?
When the estate and covenant are in the same instrument.
174
What is the privity requirement for real covenants?
Vertical privity for either, horizontal privity for just burdens??
Modern trend: No privity required. Affirmative covenants run to successors of an estate of the same duration as the estate of the original party. Negative covenants are analyzed similarly to easements.
175
What are the requirements for an equitable servitude?
1) Must be in writing, except for implied reciprocal servitudes.
2) Requires intent for restriction to be enforceable by and against successors.
3) Must touch/concern (no privity required)
4) If servitude is to be enforced against a purchaser, need notice (actual, record, or inquiry)
176
What are the requirements for an implied reciprocal servitude?
1) Intent to create a servitude on all plots (common scheme).
2) Notice (actual, record, or inquiry) by party against whom enforcement is sought.
No writing required.
177
What is a negative servitude
A promise to refrain form doing something.
178
What are diff defenses to enforcement of covenants and equitable servitudes?
changed circs; laches; unclean hands; acquiescence; estoppel
179
How are covenants and equitable servitudes terminated?
Release, merger, abandonment, estoppel, condemnation??
180
Are covenants and equitable servitudes transferred along with the real prop itself? Any reqs for that?
Yes? Notice is generally required to enforce them against a BFP?
181
What is a common-interest ownership community?
Individually owned units burdened by a covenant to pay an association that provides services and enforces other covenants.
182
What are the diff types of common-interest ownership communities?
property owners' association; condos; cooperatives
183
What is a condo?
Owners own unit and share of common areas
184
What is the governance structure of a common-interest ownership community?
Governed by association, which is overseen by a board of directors. Rules laid out by declaration and other governing docs.
185
What are the powers of community (of a common-interest ownership community)?
Levy assessments (for general upkeep, repairs, improvements); manage, acquire, improve common prop; adopt rules governing use of prop (must not unreasonably interfere with owners' rights); enforce governing docs and rules. Community has corresponding duties.
In the exercise of its discretionary powers, a common-interest community association or one of its bodies, such as an architectural review board, must act reasonably.
186
What is a fixture?
A chattel attached to real pro that is treated as part of the real prop when determining its ownership.
187
What is a trade fixture?
A chattel used in a trade or business that is attached to real prop (e.g., restaurant stove)
188
What is the rule surrounding fixtures?
Structures built on real prop and items incorporated into structure become part of realty, but can be removed if seller reserves right to remove fixture in sale K or leased prop can be restored to former condition without damage in reasonable time.
In general, absent an agreement to the contrary, a tenant may remove a fixture that the tenant has attached to the leased property if (i) the leased property can be and is restored to its former condition after the removal, and (ii) the removal and restoration is made within a reasonable time. Although a reasonable time for removal generally does not extend beyond the termination of the lease, it may do so when (i) the termination is not due to a breach by the tenant, and (ii) the date of termination is not foreseeable by the tenant sufficiently far enough in advance to permit removal before the termination of the lease.
189
Where does each level of gov get their zoning authority?
Local govs: Enabling act from state
| Fed: Article IV Sec. 3 power over fed lands
190
What makes a regulation void?
lack of authority; irrational or arbitrary (must be rationally related to a legit gov purpose)
191
What are the diff types of zoning regs?
1) Based on use (residential, commercial, industrial)
2) Development (setbacks, density reg)
3) Special concerns (environmental protection, historic preservation)
4) Contract (permits in exchange for promises)
5) Floating (rules regarding use not linked to a particular area)
6) Cluster (consider zoning reqs as a whole, not lot by lot)
7) Planned unit development (not focused on plots, but on entirety)
192
What types of challenges can be brought against zoning regs?
Takings Clause; 13A Sub. DP and EPC; 1A Freedom of Speech; FHA; Fed Religious Land Use and Institutionalized Persons Act; state constitution and statutes
193
What are the rules around existing non-conforming prop?
May be grandfathered in, possibly subject to amortization period. Non-conformity cannot be expanded. Can increase frequency or upgrade means of use if does not constitute a sub change. Can be transfered.
194
What are the rules around a post-ordinance non-conforming prop?
Owner may request special exception permit or administrative variance.
195
What must a party seeking a zoning variance show?
Unique unnecessary hardship, not self-induced, and that variance would not result in sub harm. Can be use or area variances, and may be subject to conditions.
196
What is a comprehensive plan?
Generally required of a development and it must adhere to it.
197
Does compliance with a zoning restriction protect an owner from suit for breach of a covenant?
No.
198
Does compliance with a covenant protection an owner from a zoning violation action?
No.
199
What is the riparian rights theory?
Water belongs to those who own land bordering watercourse. Owners may make any reasonable use of the water. Water rights cannot be transferred separate and apart from the adjoining land.
200
What is the prior appropriation theory?
Water rights are determined by priority of beneficial use. Subsequent users must not infringe upon the rights of prior users. Water rights may be transferred separately from adjoining land.
201
What is a supporting right?
The right to have the land supported in its natural state
202
Wrt latter support, who is liable for damages?
Landowner who excavates on his land is strictly liable for damage to undeveloped adjoining land.
If adjoining land has improvements, landowner who excavates on his land is strictly liable only if adjoining land would have collapsed in its undeveloped state.
If adjoining land has improvements that contributed to collapse, landowner who excavates on his land is only liable if he is negligent.
203
Wrt subadjacent support, who is liable for damages?
Owner of the mineral rights is strictly liable for any failure to support the land and any buildings on the land at the time the rights were conveyed.
204
What air rights does a landowner have?
Limited right to reasonable use and enjoyment of the airspace above his land as long as it does not interfere with another's reasonable use and enjoyment of land.
205
Are promissory restraints on alienation, such as a right of first refusal, enforceable by injunction?
Yes, if reasonable.
206
Does an undisclosed right of first refusal constitute an encumbrance on marketable title for another purchaser?
Yes
207
How much notice is required for a year-to-year periodic tenancy?
Six months’ notice is required when a year-to-year periodic tenancy.
208
What is the "estoppel by deed"/after-acquired title doctrine?
Under the “estoppel by deed” doctrine, a grantor who conveys a real property interest by warranty deed before actually owning it is estopped from later denying the effectiveness of his deed. Consequently, when the grantor does acquire ownership of the land, the after-acquired title is transferred automatically to the prior grantee.
209
What is ademption?
Under the doctrine of ademption, a devise fails (or is “adeemed”) because the testator no longer owns the property upon death. the transfer of property by a testator subsequent to the execution of a will removes the property from his estate and the devise of the property is adeemed.
210
What is an equitable servitude?
covenants about land use that are enforced at equity by injunction
211
Who can enforce an equitable servitude?
The benefit of enforcing an equitable servitude is held only by successors in interest to the original deed.
212
Must equitable servitudes abide by RAP?
No
213
What is the rule about covenants of marketable title?
Absent contrary language, an implied covenant of marketable title (i.e., a title free from defects) is part of a contract to sell real property.
214
What is the doctrine of merger?
under the doctrine of merger, obligations contained in the contract of sale, including the seller’s duty to deliver marketable title, are merged into the deed and cannot thereafter be enforced through a breach of contract action.
215
What is the doctrine of equitable conversion? And who bears the risk during the land sale?
Under the doctrine of equitable conversion, equitable title to real property passes to the buyer upon entering the contract, even though the seller retains legal title. Most jurisdictions place the risk of loss between the contract and the closing on the buyer. However, if the seller has casualty insurance on the property, the seller must give the buyer credit in the amount of insurance proceeds against the purchase price.
216
If the transferee-buyer takes title “subject to” an existing mortgage obligation, is the transferee-buyer personally liable upon default?
No.
217
What is privity of estate?
Privity of estate requires both parties to an agreement to share an interest in the property that is the subject of the agreement.
218
What is a statutory right of redemption?
Statutory right of redemption arises after a foreclosure sale. A jurisdiction may provide this right by statute to allow additional time for the mortgagor to compensate the party who purchased the property at the foreclosure sale and reclaim the property.
219
What happens when a mortgagee accepts a deed in lieu of foreclosure without reserving the right to foreclose?
It extinguishes the first mortgage. However, this transaction does not affect the a second mortgage. The first mortgagee takes title to the prop subject to the second mortgage. The transfer of property on which there is a mortgage by the mortgagor does not eliminate the mortgage. While its mortgage remains on the property, the second mortgage can still foreclose.
Had first mortgagee foreclosed, second mortgage would have likely been eliminated.
220
What is a public nuisance?
an unreasonable interference with the health, safety, or property rights of the community.
221
What is a private nuisance?
a substantial, unreasonable interference with another individual’s use or enjoyment of his property. The interference may be intentional, negligent, reckless, or the result of abnormally dangerous conduct.
222
What is a public nuisance?
an unreasonable interference with the health, safety, or property rights of the community. to recover for a public nuisance, a plaintiff must show that he suffered a different kind of harm than that suffered by the rest of the community.
223
What is a private nuisance?
a substantial, unreasonable interference with another individual’s use or enjoyment of his property. The interference may be intentional, negligent, reckless, or the result of abnormally dangerous conduct.
224
When might the SOL for quiet title actions for adverse possession cases be tolled?
The statute of limitations for quiet-title actions against those alleging adverse possession does not run against a true owner who is afflicted with a disability at the inception of the adverse possession. Insanity, infancy, and imprisonment may all qualify as disabilities that toll the statute of limitations.
225
A landowner enjoys the right to subjacent support when...
the landowner transfers the rights to access and remove oil or minerals from the property
226
What is the doctrine of exoneration of liens?
The devisee of real property is entitled under the common-law doctrine of exoneration of liens to have any outstanding balance of a mortgage or other encumbrance on the property to be paid from the remaining assets of the testator's estate. Note that today, most jurisdictions have abolished this doctrine and property passes subject to any encumbrance.
227
What are fructus naturales and the rule for them?
Fructus naturales are wild crops that are not cultivated; such crops are considered real property and pass automatically with the land.
228
What is fructus industriales and the rule for them?
purposely planted and cultivated; considered personalty; if harvested, personal property; if cultivated, considered personalty
229
What is an equitable mortgage?
one created through fairness, not an explicit agreement; a court may recognize an equitable mortgage (or one created through fairness, not an explicit agreement) even though the deed provides for the absolute transfer of the real property, a court will not order the return of the property if there are countervailing equities, such as the ownership of the property by a good faith purchaser
230
What is an equitable mortgage?
one created through fairness, not an explicit agreement; a court may recognize an equitable mortgage (or one created through fairness, not an explicit agreement) even though the deed provides for the absolute transfer of the real property, a court will not order the return of the property if there are countervailing equities, such as the ownership of the property by a good faith purchaser
231
Is physical transfer of a deed required?
No, and it is not conclusive evidence of the grantor's intent
232
Is physical transfer of a deed required?
No, and it is not conclusive evidence of the grantor's intent
233
The execution and recording of a deed does what?
creates a rebuttable presumption that the deed is to be presently operative.
234
A covenant can be terminated by abandonment if...
the parties to the covenant act in an affirmative way that shows a clear intent to relinquish the covenant right; mere nonuse, however, or statements of intent without affirmative conduct, will not constitute abandonment
235
A covenant can be terminated by abandonment if...
the parties to the covenant act in an affirmative way that shows a clear intent to relinquish the covenant right; mere nonuse, however, or statements of intent without affirmative conduct, will not constitute abandonment
236
What is a purchase-money mortgage?
a mortgage granted to (i) the seller of real property or (ii) a third-party lender, to the extent that the loan proceeds are used to acquire title to the real property or construct improvements on the real property if the mortgage is given as part of the same transaction in which title is acquired.
237
What is the priority rule for a purchase-money mortgage?
A purchase-money mortgage has priority over mortgages and liens created by or that arose against the purchaser-mortgagor prior to the purchaser mortgagor’s acquisition of the property, whether or not recorded.
238
Can a co-tenant unilaterally partition prop?
A tenant in common or a joint tenant has the right to unilaterally partition the property. This can be either voluntarily through the parties’ agreement or involuntarily through court action. Courts prefer a partition in kind if the division is practical and fair.
239
Can a co-tenant unilaterally partition prop?
A tenant in common or a joint tenant has the right to unilaterally partition the property. This can be either voluntarily through the parties’ agreement or involuntarily through court action. Courts prefer a partition in kind if the division is practical and fair.
240
If the purchase price reflects the assumption of the mortgage, what effect does that have on what defenses a purchaser of a mortgaged prop can raise against the mortgagee?
If the purchase price reflects the assumption of the mortgage, the purchaser of a mortgaged property who assumes the mortgage cannot assert the defenses of the mortgagor-seller against the enforcement of the mortgage. Otherwise, the purchaser would, by being permitted to avoid the assumed obligation, be unjustly enriched. (Note: A deed of trust functions as a mortgage in many states.)
241
If the purchase price reflects the assumption of the mortgage, what effect does that have on what defenses a purchaser of a mortgaged prop can raise against the mortgagee?
If the purchase price reflects the assumption of the mortgage, the purchaser of a mortgaged property who assumes the mortgage cannot assert the defenses of the mortgagor-seller against the enforcement of the mortgage. Otherwise, the purchaser would, by being permitted to avoid the assumed obligation, be unjustly enriched. (Note: A deed of trust functions as a mortgage in many states.)
242
Does a prop owner have legal right to sunlight?
A property owner, as an attribute of owning the property, does not have a legal right to sunlight or to a view.
243
Wrt to an option holder, does proposing a different $ amount count as a rejection and counteroffer?
although an offeree rejects an offer by making a counteroffer, an option holder may propose to alter the terms for purchasing the property subject to the option without sacrificing the right to exercise the option.
244
theory of constructive eviction:
When a landlord substantially interferes with the tenant’s use and enjoyment of the property by breaching a duty to the tenant, the tenant’s obligation to pay rent may be excused under the theory of constructive eviction.
In order to end a lease before the end of its term by constructive eviction, the landlord must have breached a duty, which caused the loss of the substantial use and enjoyment of the premises, the tenant must give the landlord notice of the problem and reasonable opportunity to cure, and the tenant must vacate the property within a reasonable period of time.
Not every interference with the use and enjoyment of the premises amounts to a constructive eviction. Temporary or de minimis acts which do not amount to a permanent expulsion generally do not amount to constructive eviction.
245
Future-advances mortgage with obligatory payments vs. junior mortgage but that is not a future-advances mortgage.
Though Bank made its final advance after Finance Company recorded its mortgage, Finance Company’s lien is still junior to Bank’s. This is because Bank’s mortgage on Whiteacre was the earliest mortgage and its payments were obligatory rather than optional.
246
After acquired title doctrine
When a person who purports to transfer real property that he does not own subsequently becomes the owner of that property, the after acquired title doctrine provides that title to the property automatically vests in the transferee.
247
the rule in Shelley’s Case
any conveyance, which purports both to convey a present possessory estate of definite duration (such as a life estate) to a grantee and to create the corresponding remainder entirely in the grantee's heirs, instead results in the conveyance of the grantor's entire estate to the grantee alone, because both the present and future estates are deemed to be merged in the grantee.
