Real Prop Flashcards
(106 cards)
Adverse Possession
Allow one who has wrongfully entered a property to obtain possession of that property under the following requirements:
- actual possession
- open and notorious and visible possession
- hostile possession
- continuous use for the given statutory period.
actual possession
the claimant must have exclusive use of the property, which means he must physically occupy the premise.
- exclusive use: the true owner must be excluded from the premises and the property may not be open to public.
- partial possession: a reasonable percentage of the property must be actually used. Claimant (C) may only claim possession of the portion of the property he actually used.
- tenant: C may lease the premise to a tenant to satisfy the actual possession element.
Open and notorious and visible possession
the claimant must possess and use the property in a way that a typical owner of similar property would use the property.
- the use must be sufficiently open to put the true owner on notice of the trespass by the adverse possessor.
Hostile possession
Possession of the land must be without owner’s consent
- hostile possession may mean impermissible, the possession does not need to be done in a hostile manner.
- Boundary disputes: where one property owner occupied the land, mistakenly thinking it is his own, it can be deemed hostile.
- Ouster of a co-tenant is required to find a hostile possession with concurrent property owners since all co-tenants have equal right of possession of the property.
ouster occurs when a co-tenant claims exclusive right to possession and refuses occupancy to his co-tenant.
Continuous use for the given statutory period
- statutory period: common law = 20 years; state laws varies but most require 15 years.
- continuous possession = the owner may not reenter to regain possession during the statutory time. If he does, the clock starts over.
- seasonal use may still satisfy continuous possession if this is the way a typical owner of similar property would use the land.
- tacking: one adverse possessor may tack his time with the time of another adverse possessor to meet the statutory requirement if the two possessors are in privity.
Effect of adverse possession
AP does not convey marketable title. However, the title can be perfected and made marketable by means of a judicial action to quiet title.
Land sale contract
The contract for a conveyance of an interest in real estate typically governs the agreement until the time of closing. After closing the deed became the operative document under the merger doctrine.
Statute of Fraud
requirements:
- K in writing
- names of the parties
- signed by the party to be bound
- sufficiently describe the land, and
- state some consideration (purchase price and manner of payment)
SOF Part Performance Exceptions
- Possession of the land by the purchaser
- Substantial improvement are made to the premises
- Payment for part or all of the purchase price.
Most courts require at least 2 exceptions are met to apply the exception.
PIP
Marketable title
implied promise in every land sale contract that the seller covenants to transfer marketable title at the time of closing.
Marketable title = title free from reasonable doubt about the seller’s ability to convey what he purports to convey.
Doctrine of equitable conversion
once the contract is signed, the buyer is deemed the owner of real property even before closing.
Remedy for breach of land sale contract
- damages = difference between the market price and the contract price.
- specific performance: permanent injunction where court orders D to perform the contract as promised.
Requirements for specific performance
- valid contract
- contract conditions imposed on P are satisfied or waived.
- inadequate legal remedy: real property is always unique
- mutuality of performance
- feasibility of enforcement
- No defenses such as laches or unclean hands.
Mnemonic: Chocolate Cheesecake Is My Favorite Dessert
Mortgage
a financing arrangement that conveys a security interest in land where the parties intended the land to be collateral for the repayment of a monetary obligation.
Buyer/borrower = mortgagor
Lender = mortgagee
Rights of mortgagee and mortgagor
buyer-mortgagor has right to possession of the property and title; the creditor-mortgagee has a lien, which grants the right to take the land and foreclose. Mortgages are transferaable.
Foreclosure
a process by which the mortgagee may reach the land in satisfaction of the debt if the mortgagor is in default on the loan.
- Judicial foreclosure: mortgagee must foreclose by proper judicial proceedings.
- Priority of loans: Fees from attorneys/trustees> Purchase Money Mortgage or secured senior interests > secured junior interest > unsecured interests.
Purchase Money Mortgage (PMM)
mortgage given to secure a loan that enables the debtor to originally purchase the property. A PMM receives priority over non-PMM mortgages, but a PMM may not get a deficiency judgment against the debtor.
Deficiency Judgment
occurs when the property is worth less than the amount owed on the outstanding loan. Lender can sue debtor personally for the deficiency different only if:
- there was judicial foreclosure; and
- the loan was not PMM
Antideficiency statutes
A lender cannot receive more than the value of the loan. Any excess remaining is returned to the buyer.
Redemption
When a mortgage is paid off, the property is redeemed from the mortgage. Some states have statutory redemption allowing the mortgagor a fixed period of time after forclosure to redeem the mortgage.
Deed of trust vs. mortgage
similar to a mortgage, except the debtor is the trustor and the deed of trust is given to a third-party trustee.
Installment contract vs. mortgage
Buyer makes a down payment and pays off the balance in installment. Deed is converted when the buyer paid off the installment.
Conveyance by deed
a deed is a document that serves to pass legal title from the grantor to the grantee when it is lawfully executed and properly delivered.
Deed requirements
- identification of the parties;
- In writing and signed by the grantor, which is witnessed or notarized.
- adequate description of the property
- words of intent (“grant”)
- no consideration is required