Real Property

Question 1

Future Estates

Answer 1

An interest in property where the holder of the interest will enjoy the right to own and possess the property at a future date. This interest can be held by a grantor, where they would receive the property in a reversion, or in a party that may receive the property via an executory interest or as a remainder.

Question 2

Defeasible Fees

Answer 2

A conditioned conveyance of real property, whereas violation of these conditions terminates the conveyance. It requires express language and reserves a future interest in either the grantor or a third person.

Question 3

Three Defeasible Fees

Answer 3

1. Fee Simple Determinable
2. Fee Simple Subject to Condition Subsequent
3. Fee Simple Subject to Executory Interest

Question 4

Fee Simple Determinable

Answer 4

It is followed by a possibility of reverter. The grantor includes language that spells out a condition how the grantee may lose the property. The grantee will retain the property, but ownership is “determinable,” meaning that the grantee can determine their fate, such as if they perform the condition, the possessory interest automatically reverts back to the grantor.

Question 5

Fee Simple Subject to Condition Subsequent

Answer 5

It is followed by a right of re-entry, where the grantor can specify a condition that must happen. If the grantee does not perform the condition, then the grantor can take the property back with right of entry if the grantor chooses to.

Question 6

Fee Simple Subject to Executory Interest

Answer 6

It is followed by an executory interest, where the grantor can specify a condition, that if not met, will allow a third party to take possession based on their executory interest.

Question 7

Life Estate

Answer 7

A possessory interest in real property granted until the death of the life tenant. Upon death of the life tenant, ownership of the property will then pass to the specified remainderman. A life tenant may not pass ownership of the property by will.

Question 8

Life Tenant Responsibilities

Answer 8

A life tenant has a duty to not waste the land. A future interest holder amy sue for damages or enjoin such acts. If they fail to keep the property in repair, pay taxes or pay interest on the mortgage, they are committing waste. They do not, however, need to pay the mortgage, which is the responsibility of the remainderman. Income produced on the land is the sole property of the life tenant, however, if the land is vacant and unproductive, a life tenant is not required to pay taxes.

Question 9

Remainders

Answer 9

It is a future interest held by a third person that becomes possessory upon the natural termination of a preceding estate. Should the remainderman pass away prior to a life tenant, upon the death of the life tenant the property will pass to the estate of the remainderman.

Question 10

Vested Remainder

Answer 10

A future interest in an existing and ascertained person that is guaranteed to become possessory. An open vested remainder exists if there are other persons that may vest in the future.

Question 11

Contingent Remainder

Answer 11

A potential future interest in land that is dependent upon the happening of a later event, or satisfaction of some condition precedent.

Question 12

Springing Executory Interest

Answer 12

A future interest that cuts short a grantor’s reversionary interest in an estate and doesn’t follow the natural termination of the preceding estate.

Question 13

Rule against Perpetuities

Answer 13

Invalidates any interest in property if there is any chance the interest may vest more than 21 years after a measuring life in being at the creation of the interest. Applies to contingent remainders, executory interests, class gifts, or to rights of first refusal if they are contract or covenant rights.

RAP prevents dead-hand control of property, that is, allowing prior owners to control the property, indefinitely, even after death. It does not apply to vested remainders, reversions, or in a remainder wher the property will return to the grantor. A life in being matters – if not born at the time of the grant, then the grant is invalid.

Question 14

Fee Simple Mineral Rights

Answer 14

If a grantee holds land in fee simple, they have a right to remove minerals. Only a life tenant has to account to future interest holders regarding the removal of minerals.

Question 15

Fair Housing Act

Answer 15

It is unlawful to refuse to sell or rent due to race, color, religion, sex, familial status, or origin. The act also prohibits discriminatory terms of sale, or discriminatory advertisement. Exceptions exist for religious organizations, private clubs and apartment buildings with 4 or less units, when the owner occupies one unit. The owner can discriminate, however, cannot advertise preference.

Question 16

Tenancy in Common

Answer 16

It is a concurrent estate held with no right to survivorship. Tenants can hold different interests in the property, but each is entitled to possession of the whole. Interests are alienable, devisable, and inheritable.

Question 17

Co-Tenancy Repairs

Answer 17

Each co-tenant is responsible for their fair share of carrying costs (taxes, mortgage interest payments) based upon the undivided share that they hold. A co-tenant that makes repairs is entitled to contribution for reasonable and necessary repairs provided they notified the others of the need.

Question 18

Joint Tenancy

Answer 18

It is a conveyance of real property to two or more persons which includes right of survivorship. Requires four unities: 1) time; 2) title; 3) interest; and 4) possession (T-TIP)

Question 19

Joint Tenancy Severance

Answer 19

When one joint tenant unilaterally transfers ownership interest, the new tenant takes possession of a tenancy in common. The remaining interest holders continue as joint tenants. If a joint tenant takes out a mortgage, in a lien theory jurisdiction, the joint tenancy remains intact. In a title theory jurisdiction, the joint tenancy is severed, and a tenancy in common is created.

Question 20

Tenancy by the Entirety

Answer 20

A tenancy by the entirety is a joint tenancy held by a married couple with the right of survivorship. It is only severable by divorce, death, a creditor of both spouses, or mutual agreement. Neither spouse alone can convey or encumber this real property interest.

Question 21

Legal Possession

Answer 21

American view – landlord only has the duty to deliver legal possession.

Modern (English) view – landlord must deliver actual possession.

Question 22

Leaseholds

Answer 22

A leasehold provides the tenant with a present possessory interest in real property.

Question 23

Tenancy for Years

Answer 23

A leasehold estate for a fixed period of time. It automatically terminates at the end of the lease period. If the lease is longer than a year, it requires a writing per SOF.

Question 24

Periodic Tenancy

Answer 24

A tenancy that continues for a specified time until terminated by proper notice. It can be created by express agreement, or by implication if rent is paid at specific periods, or by law. Requires notice of a full period, except for a year-to-year tenant, who only requires a 6 month notice.

Question 25

Tenancy at Will

Answer 25

It is an ongoing leashold which will continue until terminated by either the tenant or the landlord.

Question 26

Tenancy at Sufferance

Answer 26

It occurs when a tenant has wrongfully remained in the property beyond the expiration of the lease.

Question 27

Holdover Tenant

Answer 27

One who remains in possession of property despite the expiration of the lease. If the landlord allows themt o remain on the property and accepts rent, the tenant becomes a month-to-month tenant.

Question 28

Tenant Duties

Answer 28

Payment of rent, not commit waste and not to use the property for illegality. A landlord can terminate the lease or seek injunctive relief in the case of illegality by tenants.

Question 29

Rental Fees

Answer 29

Rental fees earned from third parties must be shared with all joint tenant and tenant in common owners.

Question 30

Ouster

Answer 30

A tenant in common or a joint tenant who is denied access to their property has been subjected to ouster. A tenant in common cannot adversely possess and interest in a tenancy in common absent an ouster.

Question 31

Implied Warranty of Habitability

Answer 31

Implied in every residential (not commercial) lease. It requires that the landlord provide a place to live that is reasonably suitable for inhabitation, including heat, running water, and sewage disposal. If breached, the tenant may move out and terminate the lease, withhold o reduce the rent, repair and deduct from the rent, or remain and sue for damages.

Question 32

Constructive Eviction

Answer 32

It can occur as a result of the landlord's breach of the implied covenant of quiet enjoyment if the landlord substantially interferes with the tenant's use and enjoyment of the premises by their actions or failure to act to resolve a problem. The breach must cause a loss of substantial use and enjoyment of the premises, and the tenant must give the landlord notice and opportunity to remedy the problem. Once the tenant vacates the premises, the tenant may terminate the lease and seek damages.

Question 33

Self-Help

Answer 33

Refers to the actions a landlord takes to eject a tenant from their property. Most states do not allow self-help. The landlord must properly serve the tenant with notice of a lawsuit and obtain a court judgment of possession.

Question 34

Assignment of a Lease

Answer 34

Assignment occurs when a tenant transfers all of their remaining interest to a third party. Leases are freely assignable unless prohibited in the lease agreement. Assignee is liable to the landlord for rent and all other covenants that run with the land (privity of estate). The Assignor also remains liable based on privity of contract.

Question 35

Assignment Clauses

Answer 35

These clauses are valid, but narrowly construed against the landlord. If the landlord knows of an assignment, but doesn't object, then they have waived the clause. If the assignment clause is violated, the landlord accepts the assignment by accepting rent from the new tenant.

Question 36

Subleases

Answer 36

It is a transfer of less than the full amount of the lease term/property to another. A sub-lessee is only in privity with the sub-lessor by contract and is not personally liable to the landlord for rent or for the performance of any of the covenants in the main lease, unless the sublessee expressly assumes the covenants or maintains privity of estate. Someone who leases cannot sublease for longer than their own lease -- if they do, the tenant can be ejected.

Question 37

Waste

Answer 37

Affirmative waste is voluntary waste. Permissive waste is through neglect. Ameliorative waste can be affected via improvements to the land that do not benefit later landowners.

Question 38

Fixtures

Answer 38

A fixture is chattel attached to the land, thereby converting it from personal property to fixture. Fixtures that can be removed from the land without causing damage and trade equipment are typically exceptions.

Question 39

Real Covenants

Answer 39

A non-possessory interest in land, obtained via contract and recorded to establish that it runs with the land. The contract is a formal obligation of the burdened party to either do something or refrain from doing something on the land. Breaches of real covenants are remedies with monetary damages

Question 40

Covenants -- Benefits

Answer 40

Enforcement of a real covenant requires a writing that satisfies the statute of frauds, intent for the covenant to run with the land, vertical privity, and the covenant must touch and concern the land.

Question 41

Covenants -- Burdens

Answer 41

Requires the same as a benefit, as well as horizontal privity and notice. Notice may be actual, inquiry (which may be revealed during inspection), or constructive (via proper recording).

Question 42

Vertical Privity

Answer 42

A transfer of rights or burdens between a party that enters a covenant and their successors in ownership.

Question 43

Horizontal Privity

Answer 43

The original parties that enter a real covenant must have privity of estate, i.e., a grantor-grantee relationship. Neighbors do not have privity of estate and cannot enforce the burden of a real covenant.

Question 44

Equitable Servitudes

Answer 44

A non-possessory agreement regarding how the land can be used and enforced by an injunction. Enforcement of the benefit requires a writing, intent by the parties to enter the agreement, and it must touch and concern the land. To enforce the burden, all of the above, plus notice are required. No vertical or horizontal privity is required.

Question 45

Easements

Answer 45

It is an agreement where a dominant party buys the right to use someone else's land -- the servient land. These agreements must be in writing to satisfy the statute of frauds, excepting easements by necessity and prescription.

Question 46

Easement in Gross

Answer 46

An easement that provides use or benefit to a particular person or persons. Example: Utility company personnel that may need to enter the property to service equipment.

Question 47

Easement Appurtenant

Answer 47

An easement that benefits any successive owner's enjoyment and use of the land. These attach to the land. Burdening easements pass to subsequent owners as long as the new owner has notice.

Question 48

Easement Creation

Answer 48

An easement can be created via an express grant, implication, necessity, or prescription.

Question 49

Express Grant

Answer 49

An easement is created by express grant when it is in a valid, signed writing, which details the conveyance of the right to the dominant party.

Question 50

Easement by Implication

Answer 50

It is created when a single tract of land is divided and the previous owner established use. The easement must affect the value of the land and when initially created it was not intended to be temporary.

Question 51

Easement by Necessity

Answer 51

An easement by necessity is created when a single owner subdivides their property and access to the property would be impossible without usage of the easement. Once the necessity is no longer needed, the easement is rescinded.

Question 52

Easement by Prescription

Answer 52

It is created in a similarly as an adverse possession, where the possessor's use is open and notorious, hostile, and continuous for the duration of the statutory period.

Question 53

Termination of an Easement

Answer 53

It is terminated through non-use, abandonment (requires a physical act), agreement, merger, or end of necessity.

Question 54

Transfer of an Easement

Answer 54

An easement appurtenant is transferred when real property encumbered with an easement is transferred to a new owner. The burden and benefit convey as well, but subject to the recording statute.

Question 55

Affirmative/Negative Easement

Answer 55

An affirmative easement allows the holder to affirmatively use another's land. A negative easement allows the holder to compel the owner not to use land in a particular way.

Question 56

Easement Relocation

Answer 56

An easement appurtenant cannot be moved if its location was already reasonably decided. After the easement is created, the reason for location selection is irrelevant.

Question 57

Easement Maintenance

Answer 57

An easement holder is required to make any necessary repairs to the easement. If the land is damaged by the holder, they are responsible for repair.

Question 58

Profit

Answer 58

A profit is an agreement that entitles its holder to enter the servient estate to extract resources, such as timber, oil, or quarried material.

Question 59

License

Answer 59

A license is a permission to enter another's land for some identified narrow purpose. A license does not need to be in writing and is freely revocable at the will of the licensor, unless estoppel applies to bar revocation.

Question 60

Zoning

Answer 60

Zoning laws enforce land usage based upon city planning, where the land is assigned to residential, commercial, or industrial use. They are enforced by state or local government police power and seek to control land use for the protection of the health, safety, morality and welfare of citizens.

Question 61

Non-Conforming Use

Answer 61

Allows a landowner to continue to use his land despite a change in zoning that makes the present usage illegal. Requires that the previous use be legal, that there be no break in continuous use, and the use is not substantially increased.

Question 62

Variance

Answer 62

A property owner may obtain a zoning variance if the new zoning law imposes an undue hardship, and the variance will not be contrary to the public safety.

Question 63

Spot Zoning

Answer 63

If a zoning amendment confers a special benefit on a small land parcel regardless of public interest, it is generally invalid. Note: If the regulation benefits a small group, then raise this issue.

Question 64

Dedication

Answer 64

A dedication is a donation of land or creation of an easement for public use. These dedications can be express or implied, and are typically associated with housing subdivisions, where a map or plan has been approved and recorded.

Question 65

Lateral Support/Subjacent Support

Answer 65

Every landowner is entitled to lateral support of their soil, or subjacent support (from below through excavation), in its natural condition, from adjoining land. Neighbors will be found strictly liable for excavating and causing neighboring property to crumble under its own weight. If the plaintiff's land has a structure that is damaged, and the weight of the structure likely contributed to the land collapse, liability will attach only if the plaintiff can prove negligence.

Question 66

Restraint on Alienation

Answer 66

Occurs when a grantor forbids the sale of land that is being conveyed.

Question 67

Marketable Title

Answer 67

Implied in every land sale contract is a warranty that at closing the seller will give the buyer marketable title that is reasonably free of defects regardless of the type of deed contemplated in the contract. Purchasers have a duty to report defects to give the seller reasonable time to cure. Marketability challenges must be made before the deed transfer, otherwise they will merge into the deed.

Question 68

Land Sale Contracts

Answer 68

Require a writing, identifying the parties, signed by the party to be bound, description of the land or parcel, and state the consideration.

Question 69

Subject to Mortgage

Answer 69

If the mortgagor sells the property and conveys a deed, a grantee takes subject to mortgage which remains on the land. The grantee can sign an assumption agreement, promising to pay the mortgage loan. If so, they become primarily liable to the lender, while the original mortgagor becomes secondarily liable to the mortgagee as a surety. Mortagee can then go after either party to get the mortgage repaid. The mortgagor will always be personally liable, and all subsequent grantees, whether they assume the mortgage or not, can lose the property if it is foreclosed upon for the mortgage default.

Question 70

Foreclosure

Answer 70

Upon foreclosure, the mortgagor's interest in the property is terminated. The priority of a mortgage is determined by the time it was placed on the property. A foreclosure will terminate interests junior to the mortgage being foreclosed. If proceeds from the foreclosure sale are insufficient, then the foreclosed unpaid parties will seek a deficiency judgment.

Question 71

Recording Statutes

Answer 71

A recording statute allows for documentation of transfer of real property ownership and provides guidance for the priority of ownership. These statutes are critical when determining the ownership of a parcel of property that has been transferred to multiple parties. There are three types of recording statutes: race, notice, and race-notice.

Question 72

Race Jurisdiction

Answer 72

The owner is whomever records first.

Question 73

Notice Jurisdiction

Answer 73

Any subsequent bona fide purchaser that provides notice of ownership first will own the property when a previous purchaser failed to record.

Question 74

Race-Notice

Answer 74

A subsequent bona fide purchaser prevails over a prior grantee if they did not know of the earlier transfer and their deed was recorded before the first purchaser's deed.

Question 75

Bona Fide Purchaser

Answer 75

A purchaser of real property for some value who is not aware of some defect in ownership of the property. As a bone fide purchaser, as long as they record the purchase of the property, they will likely gain good title, despite no-notice third party challenges of ownership.

Question 76

Shelter Rule

Answer 76

A grantee is protected by their bona fide purchaser grantor. It protects donees and devisees who did not take the property for consideration.

Question 77

Notice to a Purchaser

Answer 77

A purchaser can receive notice by three methods: actual, inquiry or record.

Question 78

Actual Notice

Answer 78

Requires personal knowledge from any source, most often by inspection of the property and observing conditions on the land.

Question 79

Inquiry Notice

Answer 79

It is gained during a required and reasonable inspection.

Question 80

Recor Notice

Answer 80

Affected when the deed is properly recorded.

Question 81

Doctrine of Merger

Answer 81

Obligations contained in the contract, such as a seller's duty to deliver marketable title, merge into the deed and cannot thereafter be enforced unless the deed contains the obligation.

Question 82

Warranties

Answer 82

General warranty deeds contain three present covenants and three future covenants.

Question 83

Present Covenants

Answer 83

1. Seisin 2. Right to Convey 3. Covenant against Encumbrances

Question 84

Seisin

Answer 84

The grantor warrants that they own the estate they now claim to convey

Question 85

Right to Convey

Answer 85

The grantor promises that they have the authority to make the conveyance

Question 86

Covenant against Encumbrances

Answer 86

The grantor promises that there are no non-possessory interests, servitudes, or mortgages on the land, other than those previously disclosed. If an encumbrance is found to exist after the sale, damages are equal to the difference in value of the property due to the encumbrance.

Question 87

Future Covenants

Answer 87

1. Quiet Enjoyment 2. Warranty 3. Future Assurances

Question 88

Quiet Enjoyment

Answer 88

A promise that the grantee won't be disturbed in possession by a third party's lawful title claim.

Question 89

Warranty

Answer 89

A promise to defend the grantee if lawful claims of title asserted by others arise.

Question 90

Future Assurances

Answer 90

A grantor promises to correct any future problems and do what is reasonably necessary to perfect the title conveyed.

Question 91

Quitclaim Deed

Answer 91

A deed that offers no warranties or assurances, and only passes whatever rights the seller has -- even if the seller has no rights at all.

Question 92

Special Warranty Deed

Answer 92

Covenants against title defects the grantor themselves create rather than all defects by all prior owners

Question 93

Breach of Warranty Against Encumbrances

Answer 93

If any encumbrance is found to exist after the sale, damages are equal to the difference in value of the property due to the encumbrance.

Question 94

Adverse Possession

Answer 94

Allows someone in possession of land owned by another to acquire title if possession is continuous, hostile, open and notorious, exclusive, and they actually possession the land. The adverse possessor must pay the required property tax.

Question 95

Deed Conveyance

Answer 95

Requires lawful execution, delivery and acceptance. Lawful execution requires that the deed by in writing, identify the parties, be signed by the grantor and provide and adequate property description. For the delivery to be valid, the grantor must demonstrate a present intent to transfer the interest -- physical transfer is not required.