Real property Flashcards
At common law, a conveyance of property from O “to O and A as joint tenants with right of survivorship” creates a __________.
A. Tenancy for years
B. Tenancy by the entirety
C. Tenancy in common
D. Joint tenancy
CORRECT ANSWER: C. Tenancy in common.
At common law, a conveyance of property from O “to O and A as joint tenants with right of survivorship” creates a tenancy in common. There are three forms of concurrent ownership in land: joint tenancy with right of survivorship, tenancy in common, and tenancy by the entirety. In a joint tenancy, each co-tenant owns an undivided share of the property, and the surviving co-tenant has the right to the whole estate (right of survivorship). At common law, four unities are required to create a joint tenancy: (i) time (interests vested at the same time), (ii) title (interests acquired by the same instrument), (iii) interest (interests of the same type and duration), and (iv) possession (interests give identical rights to enjoyment). If these four unities are not present, a joint tenancy cannot be created at common law. Instead, a tenancy in common results. A tenancy in common is a concurrent estate with no right of survivorship. A tenancy by the entirety is a marital estate akin to a joint tenancy in that four unities (plus a fifth-marriage) are required for its creation, and the surviving spouse has the right of survivorship. A conveyance from O “to O and A” does not satisfy the unities of time and title because O acquired his interest first by another instrument. Thus, the conveyance creates a tenancy in common rather than a joint tenancy.
The conveyance does not create a tenancy by the entirety at common law because, as explained above, it does not satisfy the unities of time and title, and the facts do not indicate that O and A are husband and wife.
The conveyance does not create a tenancy for years at common law. A tenancy for years is a leasehold estate in land wherein the tenant has a present possessory interest in the leased premises and the landlord has a reversion. Here, O and A are not in a landlord-tenant relationship.
If A and B own property as joint tenants, and B dies leaving a will devising her interest in the property to C, who owns the property?
A. C only
B. A only
C. A and C, as joint tenants
D. A and C, as tenants in common
CORRECT ANSWER: A. A only.
If A and B own property as joint tenants, and B dies leaving a will devising her interest in the property to C, A only owns the property. A testamentary disposition by one joint tenant will not sever a joint tenancy. A will devising a joint tenant’s interest to another is inoperative as to joint tenancy property because when the co-tenant who is the testator dies (which is when the will becomes effective), her rights in the joint tenancy property are extinguished, and the will has no effect on them. Thus, upon B’s death the property is freed from her concurrent interest, leaving A the sole owner and C with no interest in the property.
On the other hand, certain acts by one joint tenant will sever a joint tenancy (e.g., suit for partition, inter vivos conveyance by one joint tenant, execution of a mortgage by one joint tenant in a title theory state). Then, the transferee takes the interest as a tenant in common and not as a joint tenant. Thus, if B had successfully conveyed her interest to C by deed, A and C would own the property as tenants in common but not as joint tenants. Alternatively, if A and B had owned the property as tenants in common, B’s will would have effectively conveyed her interest to C, so that A and C would own the property as tenants in common. Furthermore, C only would be incorrect in any event because B can convey no greater interest than the one-half interest she owns.
How will the proceeds from a partition sale of property initially held by four joint tenants (A, B, C, and D) be divided if A sold her interest to E, and B died, leaving her property to F and G?
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A. F and G get 1/8 each; C, D, and E get 1/4 each
B. C, D, and E get 1/3 each
C. C and D get 3/8 each; E gets 1/4
D. C and D get 1/2 each
CORRECT ANSWER: C. C and D get 3/8 each; E gets 1/4
The proceeds from a partition sale of property initially held by four joint tenants (A, B, C, and D), after A sold her interest to E, and B died, leaving her property to F and G, would be divided as follows: C and D get 3/8 each; E gets 1/4. The distinguishing feature of a joint tenancy is the right of survivorship. When property is held by three or more joint tenants, one joint tenant’s conveyance destroys the joint tenancy only as to that interest. The remaining joint tenants continue to hold in joint tenancy as between themselves, and the grantee holds his interest as a tenant in common with them. When A sold her interest to E, that 1/4 interest was severed and thus converted into a tenancy in common, which E continues to hold. Thus, E gets A’s 1/4 share. When one joint tenant dies, the property is freed from her interest, and the survivors retain an undivided right in the property. Since B’s interest was extinguished on her death, B’s devisees do not take B’s interest; the surviving joint tenants hold free of it. This leaves C and D as joint tenants with right of survivorship, together owning a 3/4 interest in the land. A joint tenancy is terminated by a suit for partition. When the partition sale was ordered, this joint tenancy was converted into a tenancy in common, and split equally between C and D. Thus, C and D each will receive 3/8 of the partition proceeds.
The proceeds would not be divided so that C and D get 1/2 each. A severed her interest in the joint tenancy when she sold her interest to E. However, as is explained above, E now holds that interest as a tenant in common. Thus, E is entitled to 1/4 of the partition proceeds.
The proceeds would not be divided so that C, D, and E get 1/3 each. This would be the case if E took A’s share as a joint tenant, but as is explained above, E took as a tenant in common. Thus, E’s share does not increase on B’s death, because he does not have the benefit of the right of survivorship.
The proceeds would not be divided so that F and G get 1/8 each, and C, D, and E get 1/4 each. F and G do not take B’s share on her death. When a joint tenant dies, her share is divided among the surviving joint tenants. This is the essence of the right of survivorship. Moreover, a devise, unlike an inter vivos conveyance, will not sever a joint tenant’s interest. Thus, B’s devisees take nothing, and C, D, and E take as discussed above.
A man and a woman purchased a parcel of land, taking title as joint tenants. Two years later, they married and had a son. Several years after that, the man and woman divorced. After the divorce, the woman and her son continued to occupy the land, although title remained in the names of both the man and the woman. The man moved out of the state and conveyed all of his title and interest in the land by deed to the son. Shortly thereafter, the man was killed in an automobile collision. The man died intestate.
Who has title to the land?
A. The woman.
B. The woman owns one-half and the man’s heirs own one-half.
C. The woman and her son as joint tenants.
D. The woman and her son as tenants in common.
CORRECT ANSWER: D. The woman and her son as tenants in common.
The woman and her son have title to the land as tenants in common. The man and the woman took title to the land as joint tenants. An inter vivos conveyance by one joint tenant of his undivided interest severs the joint tenancy, so that the transferee takes the interest as a tenant in common and not as a joint tenant. Here, there was an inter vivos conveyance by the man to the son of all of the man’s interest in the property held in joint tenancy with the woman. This conveyance destroyed the joint tenancy, so that the son takes his interest in the property as a tenant in common with the woman, rather than as a joint tenant. (A) is incorrect because the severance of the joint tenancy destroyed the right of survivorship. A joint tenancy carries with it a right of survivorship, whereby the death of one joint tenant frees the property from his concurrent interest, so that the surviving joint tenant retains an undivided right in the property that is no longer subject to the interest of the decedent. Had the man died without having conveyed his interest in the land, the woman would have had full ownership of the property, free of the man’s interest. However, because the joint tenancy had been terminated prior to the man’s death, there was no right of survivorship. Note also that the estate held by the man and the woman was not a tenancy by the entirety, which is a marital estate similar to a joint tenancy between a husband and wife. If a conveyance to spouses is unclear as to the type of estate created, most states presume that it creates a tenancy by the entirety. Here, the man and the woman took title to the land prior to their marriage, and their subsequent marriage does not affect the nature of their title. This is important because in a tenancy by the entirety, one spouse cannot convey any interest. (B) is incorrect because the man conveyed his interest in the land to the son. Thus, there is no interest or right in the land to which the heirs of the man can succeed under the intestacy laws. In addition, even if there had been no conveyance, the man’s heirs would not have succeeded to his interest in the land. Rather, the woman would have taken an undivided interest in the property by means of the right of survivorship. (C) is incorrect because one joint tenant cannot convey his right of survivorship. When a joint tenant conveys his interest, it automatically becomes a tenancy in common interest. This is because the unity of time (one of the four unities required for creation of a joint tenancy) is lacking. To be joint tenants, the interests of the co-tenants must vest at the same time. Here, the woman and the man’s interest vested at the same time, but the son’s vested much later. Thus, the woman and her son cannot be joint tenants.
Two partners bought a commercial building from an owner. They paid cash for the building and took title as joint tenants with right of survivorship. Several years later, the first partner executed a mortgage on the building to secure a personal loan to a bank. The second partner had no knowledge of the mortgage to the bank. The state in which the commercial building is located recognizes the lien theory of mortgages. The first partner died before paying off his loan. He left all of his property by will to his daughter, his only heir.
Who has title to the commercial building?
A. The second partner has title free and clear of the mortgage.
B. An undivided one-half is held by the second partner free and clear of the mortgage, and the other one-half is held by the daughter, subject to the mortgage.
C. An undivided one-half is held by the second partner and the other one-half by the daughter, with both halves subject to the mortgage.
D. The second partner has title to the entire property, with an undivided one-half being subject to the mortgage.
CORRECT ANSWER: A.
The second partner has title free and clear of the mortgage. When the partners bought the property, they took title as joint tenants with right of survivorship. If the joint tenancy continued until the first partner’s death, then the property would pass immediately on death to the second partner. Because the second partner did not sign the mortgage, she would not be subject to it, regardless of whether she knew about it. The key to answering this question is to know whether execution of the mortgage by the first partner caused a severance of the joint tenancy. If it did cause a severance, then the first partner’s one-half would not pass to the second under right of survivorship but instead would pass to the first’s estate, and thus would go to the daughter by will. Whether a mortgage creates a severance or not depends on whether the state follows the lien theory or the title theory of mortgages. Lien theory means no severance; title theory means severance. Because this is a lien theory state (majority rule on the MBE), there was no severance; thus, the joint tenancy remained intact. On the first partner’s death, the joint tenancy ended and the first partner’s interest instantly passed to the second partner. The first partner’s estate got nothing; hence, the daughter could get nothing. (B) would be the correct answer if the execution of the mortgage had created a severance of the joint tenancy. The severance would have changed the joint tenancy to a tenancy in common. The second partner would keep her one-half, free of the mortgage she did not sign, and the daughter would inherit the first partner’s one-half, subject to the mortgage the first partner signed. Because we are told this is a lien theory state, there was no severance when the mortgage was executed so the joint tenancy remained intact until the first partner’s death. (C) is incorrect. Not only is the joint tenancy unsevered so that it remains intact to give title to the entire property to the second partner, but also under no circumstances could the second partner be held liable for a mortgage she did not enter into. (D) is incorrect. When the first partner died, the property passed free and clear to the surviving joint tenant. The mortgage signed by the first partner did not sever the joint tenancy because this is a lien theory state. The mortgage can be held only against the property the first partner has; when the first partner died, the right of survivorship operated to end the first partner’s interest and automatically vested it in the survivor.
A landowner conveyed her parcel of land to “my brother and my sister jointly, with right of survivorship.” Shortly thereafter, the brother was in an automobile accident. The driver of the other vehicle sued the brother on a theory of negligence, and obtained a judgment in the amount of $250,000. Because the brother did not have insurance or enough cash to satisfy the judgment, the driver levied on the brother’s interest in the land.
What interest will the driver most likely take?
A. None, because the brother’s interest in the land cannot be partitioned.
B. An undivided one-half interest, regardless of whether the brother and the sister’s title to the land is construed as a joint tenancy or a tenancy in common.
C. An undivided one-half interest, assuming the brother and the sister’s interest is construed as a tenancy in common and not a joint tenancy.
D. A contingent right of survivorship that will vest if the brother survives the sister.
CORRECT ANSWER: B. An undivided one-half interest, regardless of whether the brother and the sister’s title to the land is construed as a joint tenancy or a tenancy in common.
The driver will get an undivided one-half interest in the land regardless of the status of the brother and the sister’s title. A joint tenancy is a concurrent estate with a right of survivorship, while a tenancy in common does not have a right of survivorship. At common law, the conveyance here would qualify as a joint tenancy because the unities of time, title, interest, and possession are present in the conveyance. Although under modern law a joint tenancy must be created with specific language or else it will be presumed to be a tenancy in common, the conveyance here still would probably qualify as a joint tenancy, even though it did not use the words “joint tenancy,” because it contained the “right of survivorship” language. However, regardless of whether the estate is characterized as a joint tenancy or a tenancy in common, one tenant’s interest may be transferred without the consent of the other tenant, and a creditor may levy on the interest. In most jurisdictions, a lien against one joint tenant’s interest does not sever the joint tenancy until the lien holder proceeds to enforce it by foreclosure. At that point, the purchaser at the foreclosure sale will hold the property as a tenant in common with the other tenant, but will still have an undivided one-half interest in the property unless and until he brings an action to partition the estate. (A) is incorrect because both joint tenancies and tenancies in common may be subject to partition. (In contrast, tenancies by the entirety cannot be terminated by involuntary partition.) (C) is incorrect because, as discussed above, a joint tenant may validly convey or encumber his interest in the property. (D) is incorrect because the driver does not have a contingent interest; she has a present lien on the brother’s interest that can be enforced immediately by foreclosure, which would sever the joint tenancy.
In which of the following situations must the tenant continue to pay a portion of the rent?
A. The landlord takes possession of an unused barn on the leased premises and stores farm equipment in it.
B. A paramount title holder obtains a judgment in an ejectment action against the tenant.
C. A paramount title holder takes possession of an unused barn on the leased premises and stores farm equipment in it.
D. The landlord obtains a judgment in an ejectment action against the tenant.
CORRECT ANSWER: C. A paramount title holder takes possession of an unused barn on the leased premises and stores farm equipment in it.
If a paramount title holder takes possession of an unused barn on the leased premises and stores farm equipment in it, the tenant must continue to pay a portion of the rent. Every lease contains an implied covenant that neither the landlord nor someone with paramount title will interfere with the tenant’s quiet enjoyment and possession of the premises. This covenant is breached by the tenant’s total or partial actual eviction from the leased premises. Total actual eviction occurs when the landlord or a paramount title holder excludes the tenant from the entire leased premises. This terminates the tenant’s obligation to pay rent. Partial actual eviction occurs when the tenant is excluded from only part of the leased premises. Partial eviction by the landlord relieves the tenant of the obligation to pay rent for the entire premises, even though the tenant continues in possession of the remainder of the premises. Partial eviction by a paramount title holder results in an apportionment of rent; i.e., the tenant is liable for the reasonable rental value of the portion that he continues to possess. A paramount title holder’s taking possession of an unused barn constitutes partial actual eviction. Thus, rent will be apportioned.
If the landlord or a paramount title holder obtains a judgment in an ejectment action against the tenant, the total actual eviction terminates the tenant’s obligation to pay rent.
If the landlord takes possession of an unused barn on the leased premises and stores farm equipment in it, the partial actual eviction by the landlord terminates the tenant’s obligation to pay rent for the entire premises.
A landlord leased an apartment to a tenant for five years. The lease provided that the landlord will: (i) keep the apartment building at a comfortable temperature 24 hours per day, and (ii) have the carpets cleaned once a year. Two years later, the landlord began turning off the air conditioning at 10 p.m. The tenant’s apartment became hot and stuffy, and she demanded that the landlord honor the covenant. The landlord refused. The following month, the pipes burst in the tenant’s only bathroom, rendering it unusable. The resultant flooding soiled some of the carpeting, which had not been cleaned in the past 12 months. The tenant reported the problems to the landlord, who did not return the tenant’s phone calls.
Which of the following are valid reasons for the tenant to terminate the lease?
A. Only that the landlord did not keep the apartment building at a comfortable temperature 24 hours per day.
B. Only that the landlord did not fix the bathroom pipes.
C. That the landlord did not keep the apartment building at a comfortable temperature 24 hours per day and did not fix the bathroom pipes.
D. That the landlord did not keep the apartment building at a comfortable temperature 24 hours per day, did not have the carpets cleaned, and did not fix the bathroom pipes.
CORRECT ANSWER: B. Only that the landlord did not fix the bathroom pipes.
The tenant will be successful in terminating the lease because the landlord breached the implied warranty of habitability by failing to fix the bathroom pipes. The general rule at common law was that the landlord was not liable to the tenant for damages caused by the landlord’s failure to maintain the premises during the period of the leasehold. Today, however, a majority of jurisdictions, usually by statute, provide for an implied warranty of habitability for residential tenancies. In the absence of a local housing code, the standard applied is whether the conditions are reasonably suitable for human residence. If the landlord breaches the implied warranty, the tenant may: (i) terminate the lease, (ii) make repairs and offset their cost against future rent, (iii) abate rent, or (iv) seek damages. Here, a court is likely to consider the lack of a functioning bathroom as making the premises unsuitable for human residence, allowing the tenant to terminate the lease. (A) is therefore incorrect. (C) would be a stronger answer if the tenant had vacated the premises within a reasonable time. The doctrine of constructive eviction provides that where a landlord does an act or fails to perform some service that he has a legal duty to provide, and thereby makes the property uninhabitable, the tenant may terminate the lease and seek damages. However, a tenant cannot claim a constructive eviction unless: (i) the injurious acts were caused by the landlord, (ii) the premises are uninhabitable, and (iii) the tenant vacates the premises within a reasonable time. Here, the landlord’s failing to keep the apartment building at a comfortable temperature 24 hours per day meets conditions (i) and perhaps (ii), but the tenant remains in possession. Therefore, the tenant cannot claim constructive eviction and (C) is incorrect. (D) is incorrect for the same reason.
Which of the following transfers creates a sublease from T to T2?
A. One year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises”
B. Six months into a seven-month tenancy for years, T transfers his interest “to A for the balance of the leasehold term”
C. Two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year”
CORRECT ANSWER: C. Two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year”
If two years into a four-year tenancy for years, T “assigns my entire interest to T2 for one year,” the effect of the transfer is to create a sublease between T and T2. The label given by the parties does not determine whether a transfer is an assignment or a sublease. Rather, a complete transfer of a tenant’s entire remaining lease term is an assignment, and a transfer retaining any part thereof is a sublease. Here, although T “assigned” his interest to T2, he transferred only one of the remaining two years of the lease. Thus, the transfer is a sublease rather than an assignment.
If six months into a seven-month tenancy for years, T transfers his interest “to A for the balance of the leasehold term,” the effect of the transfer is an assignment of the lease from T to T2 because it includes T’s entire remaining lease term.
If one year into a five-year tenancy for years, T transfers his interest “to T2 for four years; however, if T2 breaches the original lease terms, T may reenter and retake the premises,” the effect of the transfer is an assignment of the lease from T to T2. T transferred the remaining four years of the lease to T2, and by the slight majority view, T’s reservation of a right of reentry does not result in a sublease, but rather is still an assignment.
If L leases property to T, and L subsequently assigns L’s interest to L2, whom may T hold liable when X, a paramount title holder, ejects T?
A. L or L2
B. Neither L nor L2
C. L2 only
D. L only
CORRECT ANSWER: A. L or L2
If L leases property to T, and L subsequently assigns L’s interest to L2, T may hold L or L2 liable when X, a paramount title holder, ejects T. A landlord may assign the rents and reversion interest that he owns. The assignee is liable to the tenants for performance of all covenants made by the original landlord in the lease, provided that those covenants run with the land. The original landlord also remains liable on all of the covenants he made in the lease. X’s evicting T from the entire leased premises breaches the covenant of quiet enjoyment, which runs with the land. Thus, L and L2 are personally liable to T.
L only is incorrect because L2, the assignee, is liable for all lease covenants that run with the land, and the covenant of quiet enjoyment runs with the land.
L2 only is incorrect because L, the original landlord, also remains liable on all covenants in the original lease after assignment.
Neither L nor L2 is incorrect because the original landlord (L) remains liable on all covenants in the original lease after assignment, and the assignee (L2) is liable for all lease covenants that run with the land, including the covenant of quiet enjoyment.
A landlord leased a house to a tenant for five years. Under the terms of the lease, the tenant was to pay a fixed monthly rent plus all taxes and reasonable maintenance charges for the upkeep of the house. Three years into the lease, the tenant assigned her lease to a friend by written agreement. Although the tenant properly set forth the terms concerning the rent and maintenance charges, she failed to properly state that the friend was liable to pay the taxes on the residence during the period of the lease. A year later, the landlord received notice that a tax lien would be placed on the residence unless the taxes were immediately paid. The landlord paid the taxes and brought suit against the tenant’s friend for the amount. The suit extremely upset the friend, who abandoned the residence.
Can the landlord successfully bring a suit against the tenant for this breach of the lease?
A. No, because the tenant is no longer a tenant.
B. No, because the tenant is no longer in privity of estate with the landlord.
C. Yes, because the tenant’s assignment to the friend did not terminate the tenant’s obligations.
D. Yes, because the tenant had caused the problem by failing to include the tax payment provision in her assignment.
CORRECT ANSWER: C. Yes, because the tenant’s assignment to the friend did not terminate the tenant’s obligations.
The landlord can sue the tenant for breach because the tenant’s assignment to the friend did not terminate the tenant’s obligations. An assignee is in privity of estate with the landlord and is liable for all covenants that run with the land, including the covenant to pay rent. The original tenant (assignor) remains in privity of contract with the landlord and is liable for the rent reserved in the lease if the assignee abandons the property. Therefore, the tenant is liable to the landlord for the remaining rent. (A) is incorrect because the tenant’s status as a tenant is immaterial. (B) is incorrect because, although the assignor’s privity of estate with the landlord ends upon assignment, the assignor remains liable on the original contractual obligations. (D) is incorrect because the tenant’s failure to include the tax payment provision in her assignment to the friend does not affect the tenant’s liability as assignor under privity of contract.
A landlord entered into a 10-year lease of a building with an auctioneer, who planned to use the building itself for a storage area and the covered porch at the front of the building for auctions. A term in the auctioneer’s lease stated, “Lessor agrees to maintain all structures on the property in good repair.” Four years into the lease, the landlord sold the property to a buyer. The buyer did not agree to perform any obligations under the lease. As instructed, the auctioneer began paying rent to the buyer. In the fifth year of the lease, the porch roof began to leak. Citing the lease terms, the auctioneer asked the buyer to repair the roof. He continually refused to do so. The auctioneer finally repaired the roof herself at a cost of $2,000. The auctioneer then brought an appropriate lawsuit to recover the money.
Absent any other facts, what is the auctioneer likely to recover?
A. $2,000 from the landlord only, because the sale of the property did not sever his obligation to the auctioneer.
B. $2,000 from the buyer only, because a covenant to repair runs with the land.
C. $1,200 from the buyer and $800 from the landlord, because that represents their pro rata shares.
D. $2,000 from either the buyer or the landlord, because they are both in privity with the auctioneer.
CORRECT ANSWER: D. $2,000 from either the buyer or the landlord, because they are both in privity with the auctioneer.
The auctioneer may recover the cost of repair from either the landlord or the buyer. A landlord’s promise in a lease to maintain the property does not terminate because the property is sold. Although no longer in privity of estate, the original landlord and tenant remain in privity of contract, and the original landlord remains liable on the covenant unless there is a novation. A novation substitutes a new party for an original party to the contract. It requires the assent of all parties and completely releases the original party. Because neither the auctioneer nor the buyer has agreed to a novation, the landlord remains liable for the covenant because he and the auctioneer remain in privity of contract even after the sale. Thus, the promise to repair can be enforced against the landlord. When leased property is sold, the purchaser may be liable for his predecessor’s promises if the promise runs with the land. A covenant in a lease runs with the land if the parties to the lease so intend and the covenant touches and concerns the land. Generally, promises to do a physical act, such as maintain or repair the property, are considered to run with the land. Thus, the buyer is liable because he is in privity of estate with the auctioneer and the covenant to repair runs with the land. Consequently, both the landlord and the buyer are potentially liable to the auctioneer for the repairs. While it is true that the sale/assignment to the buyer did not sever the landlord’s obligation to the auctioneer, as explained above, the landlord is not the only person who is liable to the auctioneer. Because both the landlord and the buyer are potentially liable for the repairs, (A) is incorrect. (B) is incorrect because although it is true that a covenant to repair touches and concerns the land and runs with it on assignment, the landlord as well as the buyer can be held liable. (C) is incorrect because the auctioneer may recover the full amount from either the landlord or the buyer.
A landowner and her neighbor owned adjoining parcels of land. The landowner’s property was situated to the west of the neighbor’s property. A highway ran along the east of the neighbor’s property. Twelve years ago, the landowner asked the neighbor if it would be all right for the landowner to use an eight-foot strip along the northern part of the neighbor’s land to access the highway. The only other way for the landowner to get to the highway was to use a one-lane unpaved road that meandered through the woods for two miles. The neighbor agreed, and the landowner used the strip of land regularly to access the highway. The statutory period for adverse possession in this jurisdiction is 10 years.
What is the landowner’s interest in the neighbor’s eight-foot strip of land?
A. An easement appurtenant.
B. An easement by necessity.
C. An easement by prescription.
D. Not an easement.
CORRECT ANSWER: D. Not an easement.
The landowner’s interest in the neighbor’s eight-foot strip of land is not an easement. In effect, the landowner only has a “license” (i.e., a revocable privilege) to use the land. The answer is best reached by the process of elimination. Because an easement is an interest in land, the Statute of Frauds applies. Here, the agreement between the landowner and the neighbor was not in writing; thus, the Statute of Frauds requirements for the creation of an express easement were not met. Therefore, (A) is incorrect. (B) is incorrect because an easement by necessity is created when the owner of land sells a part of it and deprives the part sold of access to the public road. Here, the facts do not indicate that the landowner’s and the neighbor’s parcels were once part of a common tract, and the landowner has an alternate, albeit inconvenient, way to access the highway-the one-lane road. Thus, the landowner does not have an easement by necessity. (C) is incorrect because the landowner’s use of the land was permissive. To acquire a prescriptive easement, the use must be open and notorious, adverse, and continuous and uninterrupted for the statutory period. Although the landowner used the strip for the requisite 10-year period, she does not meet the adverse requirement necessary to obtain a prescriptive easement.
A retiree purchased a rustic cabin on a small plot of land near the center of a landowner’s large parcel of land. The deed to the land, which the landowner delivered to the retiree for fair consideration, did not specifically grant an easement over the landowner’s property to reach the public highway bordering her land. There were two means of access to the cabin from the public roads: a driveway from the county road on the south, and a private road from the highway on the east. The landowner told the retiree that he could use the private road from the highway. Twice during his first two years at the cabin, the retiree took the driveway from the county road instead; at all other times he used the private road.
At the end of his second year at the cabin, the retiree began reading tarot cards to supplement his retirement income. He had a steady stream of clients coming to his home at all hours of the day and night. Most of the clients came in on the driveway from the county road, which ran close to the landowner’s home. The landowner objected, and told the retiree that neither he nor his clients had any right to use that driveway and that they must use the private road from the highway. The retiree refused, and he and his clients continued to use the driveway from the county road for three years. Finally, the landowner began blocking off the driveway from the county road. The retiree brought suit to enjoin this practice. The prescriptive period in this jurisdiction is five years.
Who will most likely prevail?
A. The landowner, because the tarot business has changed the nature of the use of the easement by necessity.
B. The landowner, because she may select the location of the easement.
C. The retiree, because he has a valid easement by necessity in the driveway from the county road.
D. The retiree, because he has acquired an easement by prescription in the driveway from the county road.
CORRECT ANSWER: B. The landowner, because she may select the location of the easement.
The landowner will prevail in a suit because she, as the holder of the servient estate, has the right to choose the location of an easement by necessity. An easement by necessity arises when the owner of a tract of land sells a part of the tract and by this division deprives one lot of access to a public road or utility line. The owner of the servient parcel has the right to locate the easement, provided the location is reasonably convenient. The landowner has chosen the private road from the highway; thus, the retiree has no right to use the driveway from the county road. Both (A) and (C) are incorrect because the retiree has no easement by necessity in the driveway. As stated above, the owner of the servient parcel (the landowner) has located the easement in the private road; thus, no easement in the driveway exists. When the owner of an easement uses it in a way that exceeds its legal scope (i.e., the easement is surcharged), the servient landowner may enjoin the excess use and possibly collect damages. If the easement by necessity had been located in the driveway, the excess use from the tarot business could have been the basis for the court’s ruling in the landowner’s favor. However, as stated above, the easement is in the private road from the highway. (D) is incorrect because the retiree’s use has not been continuous for the five-year period. To acquire an easement by prescription, the use must be: (i) open and notorious, (ii) adverse, and (iii) continuous and uninterrupted for the statutory period. Continuous adverse use does not mean constant use. Periodic acts that put the owner on notice of the claimed easement fulfill the requirement. In this case, however, two uses in the first two years would not be sufficient to put the landowner on notice that the retiree intended to claim an easement in the driveway. Therefore, the retiree has not acquired a prescriptive easement in the driveway from the county road.
A landowner owned a large tract of land, which he divided into two parcels. The northern parcel abutted a public highway. The shortest route from the southern parcel to the highway was over a private road that crossed the northern parcel. The other route was over a single-lane dirt and gravel path that wound for over four miles through the woods. The landowner sold the southern parcel to a developer, including an express easement in the private road across the northern parcel. The landowner knew of the developer’s plans to open an inn on the property. The developer built the inn but never opened it to the public.
Fifteen years later, the developer sold the southern parcel to an investor, who planned to open the inn to the public. The developer had never properly recorded her deed to the land, but the investor promptly recorded her deed, which made no mention of a right to cross the northern parcel via the private road. About a week after the investor took possession of the southern parcel, she learned of the provision in the developer’s deed to the land. However, the landowner refuses to grant the investor permission to use the road across his property to reach the highway.
Does the investor have a right to cross the northern parcel?
A. No, because the easement is not mentioned in the investor’s deed, and the developer’s deed containing the easement was not recorded.
B. No, because the investor’s opening of the inn would increase the use of the easement.
C. Yes, but only if the developer exercised her right to use the easement when she owned the southern parcel.
D. Yes, even if the developer never exercised her right to use the easement when she owned the southern parcel.
CORRECT ANSWER: D. Yes, even if the developer never exercised her right to use the easement when she owned the southern parcel.
The investor has an easement to cross the northern parcel even if the developer never exercised her right to use the easement. The original easement granted to the developer was an easement appurtenant, the benefit of which passes with a transfer of the benefited land. An easement is deemed appurtenant when the right of special use benefits the easement holder in her physical use or enjoyment of another tract of land. The land subject to the easement is the servient tenement, while the land having the benefit of the easement is the dominant tenement. The benefit of an easement appurtenant passes with transfers of the benefited land, regardless of whether the easement is mentioned in the conveyance. All who possess or subsequently succeed to title to the dominant tenement are entitled to the benefit of the easement. The easement granted to the developer was an easement appurtenant because the right to use the private road across the northern parcel (the servient tenement) benefited the developer in her use and enjoyment of the southern parcel (the dominant tenement) by providing her with the most convenient access to the public highway. Thus, when the developer sold the benefited land to the investor, the benefit of the easement also passed to the investor as an incident of possession of the southern parcel. (A) is incorrect because, as explained above, this benefit passed to the investor despite the fact that the deed to the investor made no mention of the easement. The failure to record does not affect the validity of the easement. Recordation is not essential to the validity of a deed, but only serves to protect the interests of a grantee against subsequent purchasers. Here, the dispute is between the original grantor and the successor of the original easement holder. The purpose of most recording statutes is to provide notice to a burdened party. The person who granted the easement is in no need of notice. The only relevance of recording in this situation is with respect to the servient tenement, the northern parcel. The grant of easement should be recorded on the northern parcel, or bona fide purchasers from the landowner will take free of it. However, no such purchasers are involved in this question. (B) is incorrect because the investor’s use of the easement would not be a change in its use. This choice goes to the scope of the easement. The key for determining the scope is the reasonable intent of the original parties, including the reasonable present and future needs of the dominant tenement. Here, because the landowner knew of the developer’s plans to open an inn, he knew that she and her guests would use the road across the northern parcel. The investor’s use of the easement would be the same-her use and that of her guests. This is not a change in intended use sufficient to allow the landowner to legally prevent the investor’s use of the easement. (C) is incorrect because nonuse does not extinguish an easement. Abandonment, which does terminate an easement, requires a physical act by the easement holder that manifests an intent to permanently abandon the easement (e.g., erecting a building that blocks access to an easement of way). Because there is no indication of such an act by the developer, the easement continues to benefit the southern parcel even if the developer never used it.
In a residential subdivision, will a commercial builder be bound by a residential-use restriction that was omitted from his deed?
A. Yes, if the builder is in horizontal privity with the developer.
B. No, because there is no written restrictive covenant in the deed to the builder’s lot.
C. Yes, if the builder had inquiry notice of a common scheme for development.
D. No, unless the builder had actual notice of restrictive covenants in the deeds to other lots.
CORRECT ANSWER: C. Yes, if the builder had inquiry notice of a common scheme for development.
Yes, a commercial builder will be bound by the restriction if the builder had inquiry notice of a common scheme for development. An equitable servitude is a covenant (i.e., a promise to do or not do something on the land) that, regardless of whether it runs with the land at law, can be enforced in equity against assignees of the burdened land who have notice of it. Generally, equitable servitudes are created by covenants contained in a writing that satisfies the Statute of Frauds. However, in the absence of a writing, reciprocal negative servitudes may be implied if:
1. There is a common scheme for development (i.e., a plan existing at the time sales of the subdivision parcels began that all parcels be developed within the terms of the negative covenant); and 2. The grantee had actual, record, or inquiry notice of the covenant.
Thus, the builder may be bound without actual notice of restrictive covenants in the deeds to other lots. In a residential subdivision, the builder would be on inquiry notice of a common scheme for development if the neighborhood appeared to conform to common restrictions. Thus, the builder would be bound by the residential-use restriction.
Even though there is no written restrictive covenant in the deed to the builder’s lot, the restriction may be enforced as a reciprocal negative servitude, discussed above.
To be bound by the restriction, the builder need NOT be in horizontal privity with the developer. Horizontal privity requires that the original parties to a real covenant shared some interest in the land independent of the covenant at the time they entered it (e.g., as grantor and grantee). Horizontal privity is required to enforce the burden of a real covenant at law, but it is not required to enforce the burden of an equitable servitude.
Which of the following is not required for the burden of an equitable servitude to run to successors in interest?
A. The covenant touches and concerns the land.
B. There is vertical privity between the covenantor and their successor in interest.
C. The successor in interest has notice of the covenant if they have given value.
D. The covenanting parties intended that successors in interest be bound by the covenant.
CORRECT ANSWER: B. There is vertical privity between the covenantor and their successor in interest.
Vertical privity between the covenantor and their successor in interest is not required for the burden of an equitable servitude to run to successors in interest. An equitable servitude is a covenant (that is, a promise to do or not to do something on the land) that, regardless of whether it runs with the land at law, can be enforced in equity against successors of the burdened land unless the successor is a bona fide purchaser (meaning, a subsequent purchaser for value without notice of the covenant). The burden of an equitable servitude will run to successors in interest if: 1. The covenanting parties intended that successors in interest be bound by the covenant; 2. The successor in interest has notice of the covenant (if they’ve given value); and 3. The covenant touches and concerns the land (that is, it benefits the covenantor and their successor in their use and enjoyment of the burdened land). A subsequent purchaser for value of land burdened by a covenant is not bound by it in equity unless they had notice of the covenant when they acquired the land. Note that in most states, successors of the burdened land who are not purchasers (for example, donees) are bound by the covenant whether or not they had notice. Horizontal privity between the original covenanting parties and vertical privity between the covenantor and their successor in interest are not required.
Which of the following is required for the burden of an equitable servitude to run to a subsequent purchaser of the land?
A. The restriction must be recorded in the buyer’s chain of title.
B. There must be a common scheme for development.
C. The purchaser must have notice of the covenant.
D. There must be horizontal privity between the original covenanting parties.
CORRECT ANSWER: C. The purchaser must have notice of the covenant.
For the burden of an equitable servitude to run to a subsequent purchaser of the land, the purchaser must have notice of the covenant. An equitable servitude is a covenant (that is, a promise to do or not do something on the land) that, regardless of whether it runs with the land at law, can be enforced in equity against successors of the burdened land unless the successor is a bona fide purchaser (meaning, a subsequent purchaser for value without notice of the covenant). The burden of an equitable servitude will run to a subsequent purchaser if:
1. The covenanting parties intended that successors in interest be bound by the covenant; 2. The purchaser has notice of the covenant; and 3. The covenant touches and concerns the land (that is, it benefits the covenantor and the covenantor’s successor in their use and enjoyment of the burdened land). The requisite notice may be acquired through actual notice (direct knowledge of the covenants in the prior deeds); inquiry notice (the neighborhood appears to conform to common restrictions); or record notice (if the prior deeds are in the grantee’s chain of title the grantee will, under the recording acts, have constructive notice of their contents). Thus, there the restriction need not be in the buyer’s record chain of title for the buyer to be burdened by it-as long as the buyer has some kind of notice.
Horizontal privity between the original covenanting parties is not required. Horizontal privity means the original parties to a real covenant shared some interest in the land independent of the covenant at the time they entered it (for example, as grantor and grantee). Horizontal privity is required to enforce the burden of a real covenant at law, but it is not required to enforce the burden of an equitable servitude.
A common scheme for development is not required for the burden of a written equitable servitude to run to a subsequent purchaser. Generally, equitable servitudes are created by covenants contained in a writing that satisfies the Statute of Frauds. However, reciprocal negative servitudes may be implied absent a writing if there is a common scheme for the development of a subdivision and the grantee had actual, record, or inquiry notice of restrictions that do not appear in their deed. The common scheme exception applies only to negative covenants and equitable servitudes; affirmative covenants must be in writing.
A developer prepared and recorded a subdivision plan, calling for 100 home sites on half-acre lots. There were five different approved plans from which a purchaser could choose the design of the home to be built on his lot. Each deed, which referred to the recorded plan, stated that “no residence shall be erected on any lot that has not been approved by the homeowners’ association.”
A lawyer purchased a lot and built a home based on one of the approved designs. However, many of the lots were purchased by investors who wanted to hold the lots for investment purposes. Two years after the lots went on the market, one such investor sold her lot to an architect by a deed that did not contain any reference to the recorded plan nor the obligation regarding approval by the homeowners’ association. In fact, because very few residences had been built in the subdivision since the lots were first available for purchase, no homeowners’ association meetings had been held in two years.
The architect began building a very modernistic house on her one-half acre. When the lawyer noticed the house being built, he brought an action to enjoin the construction.
For which party will the court rule?
A. The architect, because her deed contained no restrictive covenants.
B. The architect, because any restrictive covenant in her deed can only be enforced by the opposite party to the covenant or that person’s successor in title.
C. The lawyer, because the recorded subdivision plan, taken with the fact that all lots were similarly restricted and the architect had notice of this, gave him the right to enforce the covenant on her property.
D. The lawyer, because his deed contained the restrictive covenant.
CORRECT ANSWER: C. The lawyer, because the recorded subdivision plan, taken with the fact that all lots were similarly restricted and the architect had notice of this, gave him the right to enforce the covenant on her property.
The lawyer will likely prevail. When a subdivision is created with similar covenants in all deeds, there is a mutual right of endorsement (each lot owner can enforce against every other lot owner) if two things are satisfied: (i) a common scheme for development existed at the time that sales of parcels in the subdivision began; and (ii) there was notice of the existence of the covenant to the party sued. Here, there was a common scheme evidenced by the recorded plan, and the fact that the covenant was in the architect’s chain of title gave her constructive notice of the restriction. Therefore, not only does the covenant apply to the architect’s land, but the lawyer (or any other lot owner) can enforce it as a reciprocal negative servitude. (A) is incorrect. While it is true that the architect’s deed had no restrictions, those restrictions are binding if they are in her chain of title so as to give her notice of them. The restriction was in the deed from the developer to the investor, so the fact that it was omitted in the deed from the investor to the architect is of no significance. (B) is incorrect. While a covenant is normally only enforceable by the party receiving the promise (here, the developer), this is a situation of mutual rights of enforcement within a geographically defined area, a special situation that gives every lot owner in the area the right of enforcement, even though they did not directly receive the benefit of the promise. (D) is incorrect. The fact that gives the lawyer the right of enforcement is not just the fact that his deed contains the covenant, but that the same covenant was in all of the deeds from the developer, including the one to the architect’s predecessor in title.
A developer created an exclusive residential subdivision. In his deed to each lot, the following language appeared:
Grantee agrees for himself and assigns to use this property solely as a single-family residence, to pay monthly fees as levied by the homeowners’ association for upkeep and security guard services, and that the backyard of this property shall remain unfenced so that bicycle paths and walkways may run through each backyard, as per the subdivision master plan [adequately described], for use by all residents of the subdivision.
The developer sold lots to an actuary, a baker, and a coroner. All deeds were recorded. The subdivision was developed without backyard fences, with bicycle paths and walkways in place in accordance with the general plan. The actuary in turn sold to an accountant by a deed that omitted any mention of the covenants above, and the accountant had no actual knowledge thereof. Shortly thereafter, the accountant started operating a tax preparation business out of his home. The baker in turn sold to a barber, who knew of, but refused to pay, the monthly fees levied by the homeowners’ association. The coroner leased their property for 10 years to a chiropractor, who erected a fence around the backyard, unaware of the covenant against such fencing.
According to common law principles, which of the following statements is correct?
A. If the developer, still owning unsold lots, sues the accountant to have him cease operating the tax preparation business, the accountant would win because there is no privity between the developer and the accountant.
B. If the homeowners’ association sues the barber to collect the monthly fees for upkeep and security guard services, the homeowners’ association would win because the covenant regarding fees is enforceable in equity against the barber.
C. If the barber sues the chiropractor to obtain removal of her backyard fence, the barber would win because the covenant regarding fencing is enforceable in equity against the chiropractor.
D. If the chiropractor sues the accountant to have him cease operating the tax preparation business, the chiropractor would win because the covenant regarding single-family use is enforceable at law against the accountant.
CORRECT ANSWER: C. If the barber sues the chiropractor to obtain removal of her backyard fence, the barber would win because the covenant regarding fencing is enforceable in equity against the chiropractor.
If the barber sues the chiropractor to remove her backyard fence, the barber would win because the covenant regarding fencing is enforceable against the chiropractor as an equitable servitude. An equitable servitude is a covenant that, regardless of whether it runs with the land at law, equity will enforce against the successors of the burdened land unless the successor is a bona fide purchaser (meaning, a subsequent purchaser for value without notice of the covenant). The benefit of an equitable servitude runs to successors if: (i) the original parties so intended, and (ii) the servitude touches and concerns the land. The burden runs if (i) and (ii) are met and (iii) the subsequent purchaser has actual or constructive notice of the covenant. Privity of estate is not needed to enforce an equitable servitude because it is enforced not as an in personam right against the owner of the servient tenement, but as an equitable property interest in the land itself. Here, the original parties intended for the fencing covenant to be enforceable by and against assignees, as shown by the specific language of the covenant (“Grantee agrees for himself and assigns”) and its purpose to provide bicycle paths and walkways running through each backyard for the use of all subdivision residents. The benefit of the covenant touches and concerns the barber’s property because it increases his enjoyment thereof by providing him with such paths and walkways. Therefore, the barber is entitled to enforce the covenant. The burden of the covenant touches and concerns the land occupied by the chiropractor because it restricts the landholder in their use of the parcel (that is, her rights in connection with the enjoyment of the land are diminished by being unable to fence in the backyard). The chiropractor will be deemed to have both record and inquiry notice of the restriction. The restriction is contained in deeds in the chiropractor’s chain of title, and that can confer record notice, despite the fact that we don’t typically think of lessees doing title searches. The recording acts protect purchasers of the fee or any lesser estate, which would include a leasehold estate. The chiropractor also has inquiry notice because the subdivision is sufficiently developed in accordance with a general plan for the subdivision. Moreover, any neighbor in a subdivision can enforce a covenant contained in a subdivision deed if a general plan existed at the time he purchased his lot. As has been noted, the maintenance of access to all backyards for use as bike paths and walkways was part of such a general plan. Finally, the fact that the chiropractor did not succeed to the coroner’s entire estate, but rather a leasehold interest, is irrelevant because privity is not required to enforce an equitable servitude. Therefore, all of the requirements are in place for the existence of an equitable servitude, which can be enforced by the barber against the chiropractor. (A) is incorrect because there is privity between the developer and the accountant. There was horizontal privity between the original covenanting parties because, at the time the actuary entered into the covenant with the developer, they shared an interest in the land independent of the covenant (that is, they were in a grantor-grantee relationship). The accountant holds the entire interest held by the actuary at the time the actuary made the covenant; thus, there is vertical privity. (B) is incorrect because the remedy sought is the payment of money. Breach of a real covenant, which runs with the land at law, is remedied by an award of money damages, whereas breach of an equitable servitude is remedied by equitable relief, such as an injunction or specific performance. Because the homeowners’ association seeks to obtain from the barber the payment of money, it is inaccurate to refer to this as a situation involving an equitable servitude. (D) is incorrect because, as explained above, if equitable relief is sought, the covenant must be enforced as an equitable servitude rather than a real covenant.
If a mortgage exists on property when a real estate contract is signed:
A. Title may be marketable
B. The contract is void
C. The mortgage is extinguished
D. Title is unmarketable
CORRECT ANSWER: A. Title may be marketable.
If a mortgage exists on property when a real estate contract is signed, title may be marketable. Every land sale contract contains an implied covenant that the seller will furnish marketable title on the date of closing. Generally, encumbrances (i.e., mortgages, liens, easements, and covenants) render title unmarketable. However, a seller has the right to satisfy a mortgage or lien at the closing with sale proceeds. Thus, if the purchase price is sufficient and this is accomplished simultaneously with the transfer of title, the buyer cannot claim that the seller’s title is unmarketable.
If a mortgage exists on property when a real estate contract is signed, the mortgage is NOT extinguished. Rather, the mortgage will remain on the land and will encumber the title in the hands of the buyer unless it is satisfied as explained above. If the mortgage is not timely satisfied, the seller will breach the implied covenant of marketability, for which the buyer may pursue several remedies (e.g., rescission, damages, or specific performance with abatement of the purchase price). The contract is NOT void.
Which of the following is true when a seller of land breaches the implied covenant of marketable title?
A. The buyer may sue for breach after closing
B. The seller can obtain specific performance
C. The closing date may be extended to allow the seller time to cure
D. Rescission is unavailable as a remedy
CORRECT ANSWER: C. The closing date may be extended to allow the seller time to cure
When a seller of land breaches the implied covenant of marketable title, the closing date may be extended to allow the seller time to cure. Every land sale contract contains an implied covenant that the seller will provide marketable title at closing. Marketable title is title reasonably free from doubt, which a reasonably prudent buyer would accept. While it need not be perfect title, it must not present the buyer with an unreasonable risk of litigation. Generally, this means an unencumbered fee simple with good record title. If the buyer determines that the seller’s title is unmarketable, he must notify the seller and give her a reasonable time to cure, even if this requires extending the closing date, and even if time is of the essence.
When a seller of land breaches the implied covenant of marketable title, rescission IS available as a remedy. If the seller fails to cure the defects as explained above, then the buyer may rescind the contract, sue for damages for breach, get specific performance with abatement of the purchase price, or(in some jurisdictions) require the seller to quiet title. A court also may order rescission before the delivery date of an installment land contract if the buyer shows that the seller cannot possibly cure the defects in time. In contrast with the buyer’s remedies, the seller CANNOT obtain specific performance or damages (unless the seller cures the title defect within a reasonable time).
When a seller of land breaches the implied covenant of marketable title, the buyer may NOT sue for breach after closing. The implied covenant of marketable title applies at the contract stage of a land sale transaction, before the closing (i.e., exchange of purchase price and deed). The closing extinguishes the contract, which is said to merge with the deed. Then, absent fraud, the seller is no longer liable on this implied covenant; the buyer must rely on any assurances made in the deed.
On April 15, a seller entered into a valid written agreement to sell her home to a buyer for $175,000. The provisions of the agreement provided that closing would be at the buyer’s attorney’s office on May 15, and that the seller would deliver to the buyer marketable title, free and clear of all encumbrances.
On the date of closing, the seller offered to the buyer the deed to the house, but the buyer refused to go ahead with the purchase because his attorney told him that a contractor who had done work on the house had recorded a lis pendens on May 1 against the property regarding a $10,000 contract dispute he had with the seller. The seller indicated that she was unaware of the lien, but that she was willing to go ahead with the sale and set aside funds from the purchase price to cover the contractor’s claim until the dispute was resolved. The buyer still refused to proceed, stating that the seller had breached the contract.
If the seller brings an action against the buyer for specific performance, what is the probable result?
A. The buyer prevails, because the title to the property was not marketable as of the date of closing.
B. The buyer prevails, because an encumbrance was on the title as of the date of closing that was subject to litigation.
C. The seller prevails, because under the doctrine of equitable conversion, the buyer was the owner of the property when the lis pendens was recorded, and therefore it was invalid.
D. The seller prevails, because an implied term of their contract was that she could use the proceeds to clear any encumbrance on the title.
CORRECT ANSWER: D. The seller prevails, because an implied term of their contract was that she could use the proceeds to clear any encumbrance on the title.
The seller will likely prevail because she is entitled to clear the encumbrance with the proceeds of the sale. In a contract for the sale of real property, the seller of the land is entitled to use the proceeds of the sale to clear title if she can ensure that the purchaser will be protected. The seller’s offer to escrow the funds in this case should act as such guarantee. Thus, (A) is incorrect. (B) is incorrect because, although there will be litigation over the contract dispute, the litigation will not affect the title to the land because the contractor is claiming only money damages and not an interest in the property. (C) is incorrect because the doctrine of equitable conversion is only applicable as against the seller and the buyer, and does not affect the right of some third party with regard to attaching property held in the name of a debtor.
O conveys a life estate to A, with a remainder to B.
If during A’s lifetime, X enters into actual, exclusive possession that is open and notorious and hostile for the statutory period, will X obtain title to the land?
A. Yes, if X had color of title
B. No, because land subject to a future interest cannot be acquired by adverse possession
C. No, but X will acquire A’s life estate
D. Yes, because X satisfied the elements of adverse possession
CORRECT ANSWER: C. No, but X will acquire A’s life estate.
No, X will not obtain title to the land. If during A’s lifetime, X enters into actual, exclusive possession that is open and notorious and hostile for the statutory period, X will not obtain title to the land, but X will acquire A’s life estate. If a landowner does not commence an action to eject a would-be adverse possessor before the statute of limitations expires, she is barred from suing for ejectment, and title vests in the possessor. However, the statute of limitations does not run against the holder of a future interest (e.g., remainder, reversion) until her interest becomes possessory. The future interest holder has no right to possession until the prior present estate terminates, and thus no cause of action for ejectment accrues until that time. Here, X will acquire A’s life estate by adverse possession (i.e., a life estate pur autre vie, measured by A’s life), but not B’s remainder, which remains nonpossessory while A is living. Thus, upon A’s death, X’s interest will terminate.
This is true even though X satisfied the elements of adverse possession. To establish title by adverse possession, the occupier must show:
(i) An actual entry giving exclusive possession that is (ii) Open and notorious, (iii) Adverse (hostile), and (iv) Continuous throughout the statutory period.
Land subject to a future interest CAN be acquired by adverse possession; however, the statute will not begin to run as against the future interest holder until her interest becomes possessory, as explained above. This is true regardless of whether X had color of title (i.e., a document purporting to convey title).
