Real Property Flashcards

Question

Fee simple determinable

Answer 1

An estate that will **end automatically** at the happening of a **condition**. It happens automatically because the condition is a durational marker set at the beginning. * Created by words of **duration**, such as “**so long as**,” “**until**,” “**while**,” or “**during**.” * **Grantor’s** future interest is a **possibility of reverter**. **No notice** of termination is required once the condition is met. If the condition is never met, it is treated as a **fee simple absolute**. * **Hint** → Limiting words will be placed **before** the first punctuation mark.

Answer 2

The estate is not limited by duration, but rather by a **condition** which will give the grantor the **right to take the property** back once it is met. * Created by **conditional phrases**, such as “**on the condition that**,” “**provided that**,” “**but if**,” or “**however**.” * **Grantor’s** future interest is a **right of reentry**, also called a **power of termination** which **must** be stated in the original deed. * **Hint** → Limiting words will be placed **after** the first punctuation mark.

Answer 3

Limited by a **condition**, but instead of the property going back to the grantor, it will go to a **third party** when the condition is met. * Created by phrases such as “**until . . . then to**” or “**but if . . . then to**.” * **Grantor** has **no future interest**. * **Third party** will have an **executory interest** (shifting v. springing). * Subject to the **rule against perpetuities**.

Answer 4

Property is granted to someone **for life**. * Created by “**O to A for life**.” * **Grantor’s** future interest is a **reversion**. * Life estates are **alienable**, meaning they can be **sold** to someone else. * A can sell to B, but when A dies, B will be removed from the property. * “**Pur autre vie**” → Life estate for the **life of another**. **Note**: life estates can be **determinable**, **subject to a condition subsequent**, or **subject to an executory limitation** as well.

Answer 5

**Shifting Executory Interest** → Simply goes to **another transferee** upon the condition being met. **Springing Executory Interest** → Possession follows a **gap in time** during which **no transferee** has the right to possession. * For example, “to C and heirs, if C returns from France.”

Answer 6

**Vested Remainder** → Given to an **ascertained person**, and the words of condition will **not include a condition precedent** (other than the natural termination of the estate). A person is **ascertained** if they are **born or identified**. **Contingent Remainder** → Given to an **unascertained person**, or the words creating the remainder **contain a condition precedent** (in addition to the natural termination of the estate). A person is **unascertained** when they are **unborn or unidentified**. * Since heirs cannot be identified until the grantee dies, “**to heirs**” creates a **contingent remainder**.

Answer 7

If a situation can be imagined in which the interest **might not vest** within the perpetuities period, the interest is **void**. This is the result even though the circumstances that might bring about the remote vesting are **unlikely to occur or are unrealistic**. Ask: within 21 years, are we guaranteed to know whether the one with the future interest will get the property? The validity of interests under the Rule is determined **at the time the interests are created**, taking into account the facts then existing. The “lives in being plus 21 years” period begins to run, and the measuring lives used to show the validity of an interest must be in **existence**, at that time. Applies to COPER: * Contingent remainders/Class gifts * Option to purchase connected with a fee * Powers of appointment * Executory interests * Rights of first refusal

Answer 8

“To A and B, as joint tenants, and not as tenants in common.” Main difference from a tenancy in common is that each tenant has a **right of survivorship**. A right of survivorship is **destroyed** if a joint tenant **transfers** his interest. Joint tenancies are **alienable**, which means that joint tenants are **free to transfer** their interest. When this happens, the **transferee** has a **tenancy in common**, and the **remaining joint tenants** still have a **joint tenancy**. Joint tenancies are not descendable or devisable. A right of survivorship will always trump a will. Requires the **four unities** to be met. Failure to meet any one of the unities creates a **tenancy in common**. * (1) **Unity of Time** → All tenants must take their interest at the same time. * This was traditionally circumvented by the use of a straw person. * (2) **Unity of Title** → All tenants must take their interest from the same source (deed, will, grant, etc.). * (3) **Unity of Interest** → All tenants must have equal and identical interest in the property. * (4) **Unity of Possession** → All tenants must have a possessory interest in the whole.

Answer 9

“To A and B” creates a **tenancy in common**, which is the form favored by the law currently. Tenants in common do **not** have a right of survivorship. A deceased tenant’s share will **transfer** to his or her heirs upon death. Interests in a tenancy in common are **alienable** (can transfer), **descendable** (death without a will), and **devisable** (death with a will). Jurisdictions in the United States will view the tenancy as a tenancy in common over a joint tenancy if there is any type of **ambiguity**. This is because joint tenants can turn their estates into tenancies in common at any time, without the knowledge of the other joint tenants.

Answer 10

In a **lien theory** state, a joint tenancy is **not severed** when one joint tenant **mortgages** his interest in the property. However, a joint tenancy is **severed** when one joint tenant **conveys his interest**. In a **title theory** state, when you go to the bank to get a mortgage, you give title to the bank until mortgage is paid off and JT is **severed**. In title theory, bank holds **legal title** until mortgage is paid off. Until then, the borrower has **equitable title**.

Answer 11

The **open mine doctrine** permits a **life tenant** (**does not apply to other freehold estates**) to commit **voluntary waste** by depleting resources if the mines were **open at the time the tenant took possession** of the land. The life tenant can only use mines **already in existence** and **cannot open new ones**. The life tenant also **may not deplete** more of the resources **than the interest that he owns**.

Answer 12

Where the owners of **adjacent parcels** are **uncertain** of the true boundary, they may establish a boundary between their parcels **by agreement**. There must be an **actual taking** (and **relinquishing**) of possession following the agreement **to evidence that agreement**. The agreement may be **oral**.

Answer 13

A life tenant's rights are limited by the law of **waste**. The law of waste is designed to **preserve the land** so the remaindermen can receive the land in the **same** (**or better**) condition that it was in **at the beginning of the life tenancy**. Remaindermen can sue to prevent life tenant from committing waste. A life tenant also has a duty to **pay the interest on the mortgage** to the **extent of profits derived** from the property. The **remainderman must pay** the mortgage **principal**.

Answer 14

If one tenant **wrongfully excludes another** co-tenant from possession of the **whole** or **any part** of the whole property, such conduct amounts to an **ouster**. This is required before one co-tenant can begin to **adversely possess** the property against another co-tenant. **Ouster** is the act of wrongfully excluding a cotenant from the property. Acts such as changing the locks, posting “no trespassing” signs, or physically denying a cotenant admittance to a piece of property are all considered ousters.

Answer 15

Adverse possession requires proof of possession that is: * (1) **open**, visible, and notorious; * (2) **actual**; * (3) **exclusive**; * (4) **hostile** and under a **claim of title or right**; and * (5) **continuous** for the **statutory period**. An adverse possessor may **tack** his/her possession onto the possession of a **previous adverse possessor**. Tacking is allowed if the adverse possessors are in **privity of estate**. Privity of estate is an **intentional transfer of possession**. **Hostility** is determined from the view of the **rightful owner**; subjective intent of the adverse possessor does **not** matter. Real property obtained by adverse possession is **not marketable** until the possessor obtains a **legal decree** in court that they are the title owner.

Answer 16

An adverse possessor who enters under "**color of title**" (i.e., with a **facially valid** but for some other reason **invalid deed**) will be deemed in **constructive possession** of all the property **described in the deed** so long as the portion of the property constructively possessed is **reasonable in proportion to the property actually possessed**. In the **absence of a deed**, an adverse possessor has title under a **claim of right**, and only obtains title to that portion of the land he **actually possesses**.

Answer 17

**3 Present (Do NOT run with the land, breached at time of conveyance)** * Covenant of seisin * Covenant of right to convey (grantor has the right to convey) * Covenant against encumbrances (breached if third party has an interest in land that diminishes grantee's value of the land) **3 Future (Do run with the land, breached if third party interferes with grantee's possession)** * Quiet enjoyment (breached if someone interferes with grantee's right to possession) * General warranty (grantor will defend grantee against claims by third parties and will compensate for losses resulting from successful claims) * Further assurances (grantor will perform all acts necessary to perfect title if found to be imperfect)

Answer 18

How to identify: * (1) Look for phrases: “**without notice**,” or “**in good faith**,” or “**subsequent purchaser for value**.” If present, **NOT a Race Statute** * (2) If one of the above phrases present, it is either **Race/Notice** or **Notice** statute. * (3) Look for the word “**first**.” If present, is a **Race/Notice** statute, if **not**, is a **Notice** statute

Answer 19

**Race**: First person to record wins **Notice**: Last BFP wins **Race/Notice**: First BFP to record wins BFP **pays value** (purchaser, mortgagee, judgment creditor), takes in **good faith**, and takes **without notice** of earlier conveyance/mortgage. Promising to pay value is insufficient, the BFP must **actually pay** the value. A majority of jurisdictions interpreting such statutes treat **judgment creditors** as protected in full (i.e., against all unrecorded interests subject to the recording act) only if they **purchase** the debtor's property at a **judicial sale**. Mere **entry of the judgment**, creating a lien against the judgment debtor's property, is **not** considered a "purchase for value" under the ordinary notice-type recording statute.

Answer 20

Acts as a **conveyance of the property**: where the **grantor intends an immediate transfer** of the property, and the **grantee accepts delivery** of the deed. Physical delivery is **not** important, the **intent of the parties** controls. **Recordation** of a validly executed deed, even if the absence of actual knowledge of the grantee, constitutes **prima facie evidence of delivery**. Once accepted, title to land can only be returned to the grantor by way of a deed delivered to and accepted by the original grantor.

Answer 21

Acquisition of title to real property via adverse possession is **not a conveyance** within the operation of the recording act, and thus that act **does not benefit** a subsequent (to the perfection of adverse possession) purchaser of the same property.

Answer 22

The shelter rule provides protection for a **subsequent purchaser** who does **not** satisfy the applicable recording statute. Under this rule, a person who is a **successor in interest** to a person **protected** by the recording statute is **also protected**.

Answer 23

Where there is a **modification**, a **junior mortgage holder prevails** over the modification if the modification **materially prejudices** the holder of the junior mortgage. Increasing the amount of the **principal** and increasing the **interest rate** are examples of modifications materially prejudicing the holder of a junior mortgage. Extending time does **not** materially prejudice because it lowers monthly rates and makes it easier to pay off the mortgage so junior is in a better spot.

Answer 24

If the proceeds of the sale are **insufficient** to satisfy the mortgage debt, the **mortgagee** can bring a **personal action** against the **mortgagor/debtor** for the deficiency.

Answer 25

At any time **after default** but **before foreclosure**, the **mortgagor** has the **right to redeem** the property by **paying the debt due** (**Equitable Right of Redemption**). **Statutory Right of Redemption**: The mortgagor’s right to redeem during a **statutory period** following the foreclosure sale. The right to redeem may **not** be waived ("clogged") at the time the mortgage is created, but can be waived later on for **consideration**.

Answer 26

One who **assumes** a mortgage is **personally liable for payment** of the amount still owed to the mortgagee. However, unless the original mortgagee **releases** the original mortgagor from liability, the original mortgagor **remains liable** as well. Unless prohibited in mortgage document, mortgages are **freely assumable** and the mortgagee's permission is **not** required. One who takes “**subject to a mortgage**” is **not** personally liable, but **cannot prevent foreclosure** if mortgagor defaults.

Answer 27

A purchase money mortgage is a mortgage given to secure a loan that enables the mortgagor to **acquire title** to the property at issue. A PMM, whether recorded or unrecorded, is entitled to **priority over other liens** on the property. A **seller’s PMM** has priority over a **contemporaneous PMM** from a 3rd party.

Answer 28

In an installment land contract, the **debtor** is the purchaser of the land who signs a contract with the **vendor**, agreeing to make regular installment payments until the **full contract price** (including accruing interest) has been paid. Only at that time will the vendor give a **deed** transferring legal title to the purchaser. In case of **default**, the contract may contain a **forfeiture clause** providing that the vendor may cancel the contract, retain all money paid to date, and retake possession of the land. However, the defaulting purchaser may be entitled to **restitution** to the extent his payments exceed the vendor’s damages.

Answer 29

Personal property can become a **fixture** (and thus a part of the realty, **not** to be removed) if the one who attached it **intended** that it become part of the real property. If personal property is determined to be a fixture, it will be **subject to mortgages** on the property. Chattels used in a **trade or business** are not intended to be fixtures and, thus, may be removed **during the tenancy** (and in many states, for a brief period **after the termination** of the tenancy) but the tenant must **repair any damages** caused by the removal.

Answer 30

The **costs of the foreclosure** get paid before anything else. Then, **property tax liens** have priority. Then, **senior lienholders**. Finally, **junior lienholders**. The homeowner will only receive proceeds from the foreclosure if there is a **surplus** after all of the mortgages and liens are paid off. Foreclosure of a senior lien will **wipe out all junior liens**. If this happens, junior lienholders can sue the **landowner** for the debts owed, but **cannot foreclose** the property to secure the debt.

Answer 31

If a tenant is on the premises and **fails to pay rent**, the landlord can **evict through the courts** or **continue the relationship** and **sue for rent due**. However, the landlord **must not engage in self-help**, such as changing the locks, forcibly removing the tenant, or removing any of the tenant's possessions. Self-help is flatly outlawed and is punishable civilly and criminally.

Answer 32

A covenant is a **written promise** **to do** (affirmative) or **not to do** (negative) something **related to land**; it is a contractual limitation or promise regarding land. Real covenants are commonly found in deeds and when certain requirements are met, they may be binding on successors in interest (**run with the land**). If the enforcing party is seeking **money damages**, it is a covenant. An equitable servitude is a promise that **equity** will enforce against successors of the burdened land regardless of whether it runs with the land, unless the successor is a **BFP without notice** of the covenant. If the enforcing party is seeking an **injunction**, it is an equitable servitude.

Answer 33

For the **burden** of a covenant to run with the land, there must be **writing**, **intent**, **notice** (subject to the applicable recording statute), **touch and concern**, **horizontal privity**, and **vertical privity**. For the **benefit** to run, there needs to be **writing**, **intent**, **touch and concern**, and **vertical privity**.

Answer 34

For the **burden** of an equitable servitude to run with the land, there must be **writing**, **intent**, **notice**, and **touch and concern**. Privity is **not** required. For the **benefit** to run, there must be **writing**, **intent**, and **touch and concern**.

Answer 35

A landowner has a right to have his land **supported in its natural state by adjoining land**. If, however, the land has buildings on it, an excavating adjacent landowner is **strictly liable** for damage to the buildings caused by the excavation only if the excavation **would have caused the land to subside even in its natural state** (i.e., without buildings). Even if the land would **not** have subsided in its natural state, the excavating landowner is liable for the damages if she was **negligent**.

Answer 36

Negative easements entitle their holders to prevent the servient landowner from doing something that would otherwise be **permissible**. Negative easements are generally recognized in only four categories: **light**, **air**, **support**, and **stream water** from an artificial flow. Negative easements can only be created by **express grant**. A **minority** of states allow negative easements for a **scenic view**.

Answer 37

The appurtenant easement passes **automatically** with transfers of the **dominant tenement**, regardless of whether it is even mentioned in the conveyance. The burden of the easement appurtenant also passes automatically with the **servient estate**, **unless** the new owner is a **bona fide purchaser without notice** of the easement.

Answer 38

An easement in gross is **not** transferable unless for **commercial purposes**.

Answer 39

For a court to find an easement by implication from preexisting use, is must find that the previous use on the servient part was **apparent and continuous**, and the parties expected that the use would survive division because it is **reasonably necessary** to the dominant tenement's use and enjoyment.

Answer 40

In two limited situations, easements may be implied without preexisting use: * When lots are sold in a subdivision **with reference to a recorded plat or map** that shows streets leading to the lots, buyers of the lots have **implied easements** to use the streets to access their lots. * The holder of a **profit à prendre** has an **implied easement to pass over the surface** of the servient land and to use it as **reasonably necessary to extract** from the servient property its minerals or some product of the servient property (such as timber, fish, or game), as specified by the terms of the profit.

Answer 41

An easement by necessity (another form of easement by implication) will be implied when a landowner conveys a portion of her land **with no way out** except over some part of the grantor’s remaining land. The owner of the **servient parcel has the right to locate** the easement. An easement by necessity will be **terminated** as soon as the necessity ends, **unless** the easement was by **express grant**.

Answer 42

An easement may be acquired by analogy to adverse possession. The elements are: * (1) **continuous and uninterrupted** use for the **statutory period**; * (2) **open and notorious** use; * (3) **actual** use that **need not be exclusive**; and * (4) **hostile use** (without consent). Granting permission automatically defeats an easement by prescription. The owner of the dominant tenement may also **terminate an easement** by satisfying the elements through **interference** with the easement.

Answer 43

The scope of an easement is determined by the **terms of the grant** or the conditions that created it. If there are no specific limitations in the grant, courts assume that an easement was **intended to meet both present and future needs of the dominant tenement**. If, however, the dominant parcel is **subdivided**, the lot owners will not succeed to the easement if to do so would **unreasonably overburden** the servient estate. Exceeding the scope of an easement does **not** terminate the easement. The proper remedy for the servient owner is an **injunction against the misuse**.

Answer 44

An **oral expression** of an intent to abandon an easement **won’t terminate** an easement unless it’s also **committed to writing** (a **release**) **or accompanied by action** (**abandonment**). But if the servient owner **materially changes** their position in **reasonable reliance** on the easement holder’s assurances or representations (such as that the easement will no longer be enforced), the easement terminates through estoppel. A **release** must be in **writing**. To terminate an easement by abandonment, there must be **some physical action** which demonstrates an **intent to never use** the easement again. Mere **nonuse coupled with words** of abandonment is **insufficient**.

Answer 45

An easement is extinguished when title to the **easement** and title to the **servient land** become **vested in the same person** (because a person doesn’t need an easement over their own land). So, if the same person **acquires ownership of both** the easement and the servient estate, those estates **merge** and the easement is destroyed.

Answer 46

Options to purchase are sometimes attached to leases. An option to purchase real property is a **separate contract** supported by **consideration** that is a continuing offer to sell the land at a **specified price**. As long as the option is contained **within the lease** itself, the consideration for the lease **supports the option**. Because it is an interest in land, an option must be evidenced by a **signed writing** to satisfy the **Statute of Frauds**. Absent a contrary provision, the option lasts **as long as the lease**. The method of exercise is determined by the agreement. Generally, the party granting the option **may keep the consideration** regardless of whether the option is exercised; the consideration is for the **continuing offer**, and not money for the purchase. An option to purchase in a lease is enforceable even if it would otherwise violate the Rule Against Perpetuities. The usual remedy for enforcement of an option to purchase is **specific performance**, but damages are also available.

Answer 47

The nonbreaching party is entitled to **damages** (difference between **contract price** and **market value** on the date of breach, plus **incidental costs**) or, because land is unique, **specific performance**. Note that if the buyer wishes to proceed **despite unmarketable title**, they can usually get specific performance with an **abatement of the purchase price**. Sales contracts usually require the buyer to deposit “**earnest money**” with the seller and provide that **if the buyer defaults** in performance, the **seller may retain this money** as liquidated damages. Courts routinely uphold the seller’s retention of earnest money if the amount appears to be **reasonable** in light of the seller’s **anticipated and actual damages**. However, if the clause includes an **option** to recover **actual damages** instead, courts view the clause as a penalty rather than liquidated damages and will not enforce it.

Answer 48

Absent a provision to the contrary, a contract for the sale of land contains an **implied promise** by the seller that she will deliver to the buyer a **marketable** title **at the time of closing**. This promise imposes on the seller an obligation to deliver a title that is **free from reasonable doubt**; i.e., free from questions that might present an **unreasonable risk of litigation**. Title is marketable if a **reasonably prudent buyer** would accept it in the exercise of ordinary prudence. An **easement** that reduces the value of the property (e.g., an easement of way for the benefit of a neighbor) generally renders title **unmarketable**. If the **buyer** determines, prior to closing, that the seller's title is unmarketable, he **must notify** the seller and allow a **reasonable time to cure** the defect. If the seller is unable to acquire title before closing, so that title remains unmarketable, the buyer can **rescind**, **sue for damages** caused by the breach, or obtain **specific performance** with an **abatement** of the purchase price. However, the **buyer cannot rescind prior** to closing on grounds that the seller's title is unmarketable. Where an **installment land contract** is used, the seller's obligation is to furnish marketable title when **delivery** is to occur. Thus, a buyer **cannot** withhold payments or seek other remedies on grounds that the seller's title is unmarketable prior to the date of promised delivery.

Answer 49

A profit is a nonpossessory interest in land that entitles the holder of the profit to enter on the servient tenement and **take something off of the land** (e.g., minerals, timber, oil, or game). Like an easement, a profit may be **appurtenant** or **in gross**. If the profit exists to serve a **dominant estate**, the profit is appurtenant and can only be transferred along **with the dominant estate**. Conversely, if the profit does not exist to serve a dominant estate, it is a profit **in gross** and may be transferred separate and **apart from the dominant estate**.

Answer 50

Generally, courts assume that time is **not**"of the essence" in **real estate contracts**. This means that the closing date stated in the contract is not absolutely binding in equity, and that a party, even though late in tendering her own performance, can still enforce the contract if she tenders **within a reasonable time** after the date.

Answer 51

Under the Fair Housing Act, it is unlawful to take certain actions because of a person's **race**, **color**, **religion**, **sex**, **disability**, **familial status**, or **national origin**, including: * (1) **Refusing to negotiate, rent, or sell** housing or make available a mortgage loan or other financial assistance; * (2) **Providing different terms or conditions** for the sale or rental of a dwelling or for a mortgage or other financial assistance; and * (3) **Falsely representing that a dwelling is not available** for inspection, sale, or rental. Except as relates to advertising, the Fair Housing Act does **not** apply to: * (1) **owner-occupied** buildings with **four or fewer units** in which persons live independently of each other; and * (2) **single-family homes** sold or rented by an owner who owns **no more than three** single-family homes.

Answer 52

Under the doctrine of equitable conversion, once a contract for sale of real property is **signed** and each party is entitled to **specific performance**, equity regards the **buyer as the owner** of the property. This affects the passing of title when a party to the contract **dies** before the contract is completed. A deceased **buyer's** interest passes as **real property**, while a deceased **seller's** interest passes as **personal property** (the right to receive payment).

Real Property Flashcards

(76 cards)