Real Property Flashcards

Question

Implied Covenant of Quiet Enjoyment

Answer 1

Every lease includes an implied covenant of quiet enjoyment that prevents a landlord from interfering with the tenant’s quiet enjoyment and possession of the property. − This covenant is breached when a tenant is constructively evicted.

Answer 2

When: 1) The landlord breached a duty to the tenant; 2) The landlord’s breach caused a loss of the substantial use and enjoyment of the premises; 3) The tenant gave the landlord notice of the condition; 4) The landlord failed to remedy it in a reasonable time after notice was given; AND 5) The tenant vacated the premises. *If constructive eviction occurs, tenant may terminate the lease, seek damages, & may avoid rent for time constructively evicted. Priority: Medium

Answer 3

Landlord HAS a duty to (1) repair common areas, and (2) warn of latent defects that create a risk of serious harm that the landlord knows of (or should know of).

Answer 4

Landlord has NO duty to repair (unless specified in the lease agreement).

Answer 5

Common Law → NO duty to mitigate damages. Most States → Impose a duty to take reasonable steps to mitigate losses (i.e. attempting to lease the property to another). − The mitigation DOES NOT need to be successful in order to recover damages. Priority: HIGH

Answer 6

when a tenant transfers ALL of his remaining lease interest to a third-party. − A lease may be freely assigned UNLESS the lease states otherwise. − An assignment CANNOT be for a longer period than the remaining lease term.

Answer 7

Assignee → liable to the landlord for rent and all other covenants that run with the land (privity of estate). − Assignor (Original Tenant) → also remains liable for rent (privity of contract). − Landlord → maintenance obligation runs with the land (privity of estate). Priority: HIGH

Answer 8

If the lease requires landlord’s consent, consent MUST be obtained. − Landlord waives the right to enforce a provision prohibiting assignment if he accepts rent from the assignee.

Answer 9

Most States, allow the landlord to withhold consent for any reason (even if unreasonable). Some States, require the landlord to have a reasonable basis for withholding consent. For example: Inability to fulfill lease terms, financial irresponsibility, instability, etc. Priority: Medium

Answer 10

when a tenant (sublessor) transfers ONLY SOME of his remaining lease interest. − Tenant may freely sublet UNLESS a provision in the lease states otherwise. − A sublease CANNOT be for a longer period than the remaining lease term. Sublessee is NOT liable to the landlord for rent or other covenants (there is no privity of estate). − Sublessor (original tenant) remains liable to landlord for rent (privity of contract). Priority: Medium

Answer 11

an agreement to end a lease early. − Landlord must clearly accept surrender of the lease (unless otherwise agreed). − An attempt to end the lease early (such as leaving the keys) DOES NOT constitute a surrender unless landlord clearly accepts. If landlord: − ACCEPTS the surrender → tenant’s duty to pay rent (after the acceptance) ends. − DOES NOT accept the surrender → tenant is deemed to have abandoned and is liable for damages. Priority: HIGH

Answer 12

a non-possessory interest in land that obligates the holder to either do something or refrain from doing something. − Remedy = damages (The remedy is damages, unlike equitable servitudes) Priority: Medium

Answer 13

There must be: 1) A writing that satisfies the statue of frauds; 2) Intent that the covenant runs with the land; 3) Vertical privity (when a successor holds the entire interest held by a predecessor); AND 4) The covenant must touch and concern the land( makes the land more useful or valuable). Priority: Medium

Answer 14

There must be: 1) A writing that satisfies the statue of frauds; 2) Intent that the covenant runs with the land; 3) Vertical privity (when a successor holds the entire interest held by a predecessor); 4) Horizontal privity between the original parties (the two parties shared some interest in the land independent of the covenant); 4) The covenant must touch and concern the land( makes the land more useful or valuable); AND 5) The new owner must have notice of the covenant Notice = actual (knowledge), record (covenant is recorded), OR inquiry (inspection would reveal it). Priority: Medium

Answer 15

a covenant that equity will enforce if the burdened estate had notice of the covenant (regardless of whether it runs with the land). (The remedy is injunctive relief, rather than damages) Priority: Medium

Answer 16

There must be: 1) A writing that satisfies the statue of frauds; 2) Intent for the servitude to be enforceable; AND 3) The servitude must touch and concern the land (makes the land more useful or valuable) Priority: Medium

Answer 17

There must be: 1) A writing that satisfies the statue of frauds; 2) Intent for the servitude to be enforceable; AND 3) The servitude must touch and concern the land (makes the land more useful or valuable); AND 4) The new owner must of had notice of the servitude (actual, record, or inquiry notice). Priority: Medium

Answer 18

courts will imply reciprocal restrictive covenants on land parcels in a subdivision sold by a developer ONLY IF: 1) Developer had a common scheme or plan that ALL parcels would be subject to the restriction at the time sold; AND 2) Land owner had notice of the restriction (a) actual, (b) constructive/record, or (c) inquiry –obvious from looking at the subdivision. Priority: Medium

Answer 19

A development/neighborhood of individually owned lots which have an obligation to: a) pay for/contribute maintenance of the property held in common; OR b) pay dues or assessments to an association that maintains the neighborhood and/or properties. *Typical CIC’s = condos, co-ops, and HOA’s. Residents and successive owners are subject to recorded obligations (restrictive covenants) that run with the land. Priority: Medium

Answer 20

is a non-possessory interest in the use of someone else’s land.

Answer 21

Easement in Gross: Benefits a specific owner’s enjoyment (DOES NOT pass to subsequent owners, unless easement is for commercial activity) Easement Appurtenant: Benefits ANY owner’s enjoyment (DOES pass to subsequent owners, if owner had notice) Priority: HIGH

Answer 22

An express agreement by the grantor allowing the easement, which must: 1) Be in writing signed by the grantor; 2) Identify the land and parties involved; AND 3) Indicate the grantor’s intent to convey the easement. Priority: HIGH

Answer 23

It’s created when the possessor’s use of the land is: 1) Open and notorious; 2) Continuous; 3) Hostile(without permission of the owner); AND 4) For the statutory period. Priority: HIGH

Answer 24

It’s established when: 1) a single tract of land is divided by a common owner; 2) a pre-existing use by the grantor is established prior to the division; 3) use was continuous and apparent indicating that it was meant to be permanent; AND 4) the use is reasonably necessary for the owner’s use and enjoyment of the land conveyed. Priority: HIGH

Answer 25

It’s created when: 1) land owned by the one owner is subdivided; AND 2) the easement (access of land) is essential to the use because no other entrance/exit is available. Priority: HIGH

Answer 26

a) Estoppel – when the servient estate owner reasonably relies (or materially changes position) on an assurance that the easement will not be enforced; b) Termination of the necessity; c) Involuntary destruction of the servient estate; d) Condemnation of the servient estate; e) Written release; f) Abandonment – a physical action showing an intent to never use the easement again; g) Merger of the properties (if land is separated again, it does not revive the easement); OR h) Prescription. Priority: HIGH

Answer 27

the privilege to use another’s land in a particular way. − Doesn’t need to be in writing. − May be revoked at any time by the licensor, BUT licensor may be estopped from revoking if licensee invested substantial money/labor in reasonable reliance. *A license is NOT an interest in land. Priority: Medium

Answer 28

gives the holder the right to take natural resources such as petroleum, minerals, timber, and wild game from the land of another.

Answer 29

Is personal property affixed to the land/dwelling so that it becomes part of the land. − Whether an item is a fixture is determined by the objective intent of the installer.

Answer 30

Courts consider: 1) The nature of the item; 2) way it’s attached; 3) damage that would result if removed; AND 4) extent to which the item is adapted to the property. -the more the item is incorporated into the property, the more likely its a fixture. Priority: Medium

Answer 31

An item attached for a tenant’s trade or business is NOT a fixture UNLESS removal causes substantial damage to the property. – But, the item may become a fixture if it’s not removed before the end of the lease term.

Answer 32

It allows someone who is in possession of land, owned by another, to acquire title when the possession of the property is: "OCEANS" 1)Continuous for the statutory period (i.e. 10 yrs); 2) Open and notorious. (use that would put a true owner on notice); 3) Exclusive; 4) Actual (possess the land as a true owner would); AND 5) Hostile and under a claim of right (without the true owner's consent) *title acquired by adverse possession is the same title that the original owner possessed Priority: HIGH

Answer 33

Adverse possessors in privity may aggregate their years spent possessing the property to meet the statutory period. − Privity → exists when the land is voluntarily transferred to another (i.e. deed or bequest).

Answer 34

If a person takes possession of a portion of land under color of title (invalid deed), the adverse possession extends to the entire portion of land described in the deed/title. Priority: HIGH

Answer 35

The contract must: 1) Be in writing; 2) Describe the property; 3) Identify the parties involved; 4) Contain the purchase price; AND 5) Be signed by the grantor/grantee (depending on who the contract will be enforced against). Priority: Medium

Answer 36

Once the deed is delivered & accepted, the land sale contract merges with the deed. − Result is that rights to sue under the contract are EXTINGUISHED, and a buyer may only sue upon the deed. Some Courts → will NOT apply the merger doctrine if it doesn’t carry out the probable intent of the parties. − Examples: mutual mistake, scrivener’s error.

Answer 37

The Seller has the duty to convey marketable title to a buyer. − Marketable Title = title free from an unreasonable risk of litigation at closing (i.e when purchase price and deed exchanged) Title is Unmarketable if the property has a substantial defect, such as: a) Defect in the record chain of title; and/or b) Encumbrances → mortgages, liens, restrictive covenants, easements, a claim of adverse possession, or zoning violations. *Zoning restrictions DO NOT make title unmarketable. If seller CANNOT convey marketable title at closing, the buyer may withdraw without penalty. − A buyer MAY waive the defect. If the buyer waives, seller cannot cancel the contract. Priority: Medium

Answer 38

splits ownership between the buyer and seller once the land sale contract is signed. – Buyer → has equitable title of the property. – Seller → has legal title, and holds the property in trust for the buyer. Priority: Medium

Answer 39

Risk of Loss: − Most States → risk of loss transfers to the buyer upon signing the contract. − Minority States → Seller bears the risk of loss UNLESS buyer has possession or title to the property at the time of loss.

Answer 40

Even though a land sale contract may specify a closing date, the time for performance may be changed if requested by one of the parties. EXCEPTION → If the contract contains a “time is of the essence” clause. − If buyer fails to perform on the closing date, it’s deemed a material breach and the seller may keep the down payment as liquidated damages. Priority: Medium

Answer 41

Real property is deemed unique, and specific performance is an appropriate remedy. − EXCEPTION → when the property has been sold to a Bona Fide Purchaser without notice. Priority: Medium

Answer 42

Protects buyers of newly built homes against latent defects AND warrants the home is safe and fit for human habitation at the time of sale. − Latent Defect = a defect that could not have been discovered by a reasonable inspection. Priority: HIGH

Answer 43

A valid Deed must: 1) Be in writing; 2) Be signed by the grantor; 3) Identify the parties (the grantor and grantee); 4) Describe the property; AND 5) Indicate the grantor’s present intent to convey the land. Grantor’s Intent to Convey Land – Any words indicating grantor’s intent to immediately convey the land are sufficient (i.e. grant, convey, give, transfer). − BUT, intent will not be found if: (a) grantor expressly reserves the right to revoke the deed; OR (b) gives an instruction to only deliver the deed upon grantor’s death. Priority: Medium

Answer 44

General warranty deed covenants against any title defects created by the grantor or prior titleholders The three present covenants are: 1) Seisin (rightful owner); 2) Right to convey; AND 3) Covenant against encumbrances. The three future covenants are: 1) Warranty (to defend against any third party claims to title); 2) Quiet enjoyment (not to be bothered by a third party's claim to title); AND 3) Further assurances (to do whatever is reasonable to perfect title). Priority: HIGH

Answer 45

Warrants that seller has not breached the covenants of title during the ownership: 1) Seller has not previously conveyed the property; AND 2) No encumbrances against title made by seller. Priority: HIGH

Answer 46

Is an “as is” deed; contains NO warrantees/covenants. − The grantor is NOT liable for any encumbrances or defects in title. Priority: HIGH

Answer 47

If grantor conveys title to real property before he owns it, the title will automatically vest in the grantee as soon as grantor acquires title.

Answer 48

shows all transfers for a piece of land. − 2 Indexes → one organized by names of grantors, and one organized by names of grantees.

Answer 49

Wild Deed = A deed NOT recorded properly, and thus not discoverable in the chain of title. − A wild deed DOES NOT put subsequent purchasers on constructive notice of a land transfer.

Answer 50

1) A notice statute – a subsequent bona fide purchaser (no notice+pays value) will prevail over prior grantee that failed to record. 2) A race statute – whomever records first prevails (notice is irrelevant). 3) A race-notice statute – a subsequent bona fide purchaser (no notice + pays value) is protected ONLY if he records before the prior grantee. Notice = (a) actual notice; (b) constructive (record) notice; or (c) inquiry notice (notice of what a reasonable inspection of land would provide). Priority: Medium

Answer 51

A person who: 1) Takes real property without notice of a prior conveyance; AND 2) Pays valuable consideration. *A person who receives land by gift (a donee) or by bequest (heir, devisee) is NOT a Bona Fide Purchaser. Priority: HIGH

Answer 52

A person who purchases land from a BFP receives the same status and rights as the BFP.

Answer 53

MUST: 1) be in writing, 2) be signed by the party to be charged, AND 3) reasonably identify the parties and the land.

Answer 54

Used by the buyer (the borrower) to purchase real property, and the seller is the lender who secures the mortgage on the property. − The holder has priority over ALL other junior and senior mortgages. Priority: Medium

Answer 55

A loan in which the lender may provide future payments under the original loan. The lender secures a mortgage on the real property for the entire amount of the loan, including future advances. Priority: HIGH

Answer 56

1) The borrower (the purchaser of the property); 2) The lender; AND 3) A third-party trustee who holds title to the property until the loan is paid off. *Title is transferred to the purchaser once the loan is paid. Priority: Medium

Answer 57

Express Mortgage Assumption – occurs if there is an express agreement for grantee to (1) take the real property, AND (2) continue making mortgage payments. Implied Mortgage Assumption (only allowed in a few states) – occurs if: (1) no express agreement exists; (2) grantee/buyer pays the seller only the equity in the home; AND (3) grantee continues to make payments to the lender on the balance of the mortgage. If a buyer “assumes” the mortgage, he is primarily and personally liable on the mortgage. − Seller remains secondarily liable. Priority: Medium

Answer 58

If a buyer takes real property subject to a seller’s mortgage, he is NOT personally liable on the mortgage. − BUT, a duly recorded mortgage remains on the land, and mortgagee (lender) may foreclose on the mortgage.

Answer 59

It extinguishes (destroys) all junior mortgages. − All senior (prior recorded) mortgages are NOT affected. Order of Preference – Proceeds from a foreclosure sale are used to pay off debts in this order: 1) Attorney fees and expenses associated with the sale. 2) Debts owed to mortgagee (the lender). 3) Any amount leftover goes to the mortgagor (debtor).

Answer 60

Mortgagee (lender) may seek a deficiency judgment against the debtor if the proceeds are insufficient to satisfy the mortgage debt.

Answer 61

(land-use regulations) – are ALLOWED when it reasonably protects the health, safety, morals, or general welfare of the community.

Answer 62

It is an exception to a zoning ordinance, and two types exist: 1) Use variance; 2) Area variance. A variance application may be granted if: (1) property owner shows he will suffer hardship because of the ordinance; AND (2) variance would NOT damage or harm the public welfare. Priority: Medium

Answer 63

Allows a landowner to continue to use his land in violation of a later enacted zoning law. − If the prior use was originally legal, a subsequent zoning law will NOT bar the continued use. *The non-conforming use MUST be continuous, otherwise it’s no longer protected. Changes to a Non-Conforming Use Property: − Insubstantial changes and reasonable alterations to repair the property →PERMITTED. − Substantial changes that enlarge, alter, or extend the non-conforming use → NOT ALLOWED.

Answer 64

Apply the State law where real property at issue is located (the situs rule) for cases involving the title/sale of real property. *States have a strong interest in actions that affect real property within their state. Priority: Medium

Answer 65

1) 1st Restatement – Situs rule – the laws of the state where the real property is located will govern. 2) 2nd Restatement – The state with the Most Significant Relationship to the property will govern. The situs state is presumed to have the most significant relationship. 3) Interest Analysis Test – Situs rule will apply UNLESS another state has a greater interest in having their law applied. *Apply the test that has been adopted by the jurisdiction. *If the land is merely incidental to a contract (i.e. brokerage contract, mortgage agreement), then apply the choice of law rules for contracts. Priority: Medium

Answer 66

The FHA prohibits discrimination in housing-related activities based on a person’s race/color, religion, sex, national origin, disability, and/or familial status (except for facilities designated as 55+ year old “senior housing”). FHA Exemptions → The FHA does not apply to: a) Religious organizations; b) Private clubs that limit occupancy to members; c) Owner-occupied buildings with no more than 4 units occupied by persons living independently of each other; OR d) Single-family houses sold or rented by the owner (without the use of an agent) as long as the private landlord/owner doesn’t own more than three homes at the time. Discriminatory Advertisements → are prohibited. − A discriminatory ad violates the FHA even if the property falls under an exemption.