Real Property

Question 1

What is a fee simple in present estates?

Answer 1

A fee simple is the default estate created when the grantor uses language such as ‘O to A’ or ‘O to A and his/her heirs’

A fee simple is an estate capable of lasting forever without conditions.

Question 2

What is a defeasible fee?

Answer 2

A defeasible fee is a conveyance in fee simple where the grantor places express conditions on the conveyance

It may be terminated by the occurrence of an event.

Question 3

What are the three main types of defeasible fees?

Answer 3

• Fee Simple Determinable
• Fee Simple Subject to Condition Subsequent
• Fee Simple Subject to Executory Interest

Question 4

Define Fee Simple Determinable.

Answer 4

A conditional conveyance where the grantor retains a possibility of reverter, vesting automatically when the condition fails

Created using durational language.

Question 5

Define Fee Simple Subject to Condition Subsequent.

Answer 5

A conditional conveyance where the grantor retains a right of entry, which does NOT vest automatically when the condition fails

Created using conditional language.

Question 6

What is a Fee Simple Subject to Executory Interest?

Answer 6

A conditional conveyance where a third party is granted an executory interest that divests an earlier interest

Example: ‘O conveys Greenacre to A and his heirs, but if Greenacre is no longer used as a farm, then to B and her heirs.’

Question 7

What is a life estate?

Answer 7

A present possessory estate limited by a person’s life, terminating when the measuring life dies

Created with phrases like ‘O to A for A’s life.’

Question 8

What is the difference between a vested and contingent remainder?

Answer 8

• Vested remainder: Given to an ascertainable grantee and not subject to a condition precedent
• Contingent remainder: Fails either condition or is subject to a condition precedent

Question 9

What is a tenancy in common?

Answer 9

The default estate created by a conveyance of real property to two or more people, where each has a separate but undivided interest

There is no right of survivorship.

Question 10

Define joint tenancy.

Answer 10

A conveyance of real property to two or more people with a right of survivorship, where surviving joint tenants automatically take the deceased tenant’s property interest.

Question 11

What are the four unities required to create a joint tenancy?

Answer 11

• Possession
• Interest
• Time
• Title

Question 12

What happens if any of the four unities of joint tenancy are severed?

Answer 12

The joint tenancy is terminated, and the cotenants hold the property as tenants in common.

Question 13

What is the difference between a partition in kind and a partition by sale?

Answer 13

• Partition in kind: Physically divides the property into distinct portions
• Partition by sale: Sells the property and divides the proceeds among cotenants

Question 14

What types of possessory estates can arise from the landlord-tenant relationship?

Answer 14

• Tenancy for years
• Periodic tenancy
• Tenancy at will
• Tenancy at sufferance

Question 15

What is a tenancy for years?

Answer 15

An interest that lasts for a fixed and ascertainable amount of time, automatically terminating when the term expires.

Question 16

What is a periodic tenancy?

Answer 16

A repetitive and ongoing interest that continues for a set period until terminated by proper notice from either party.

Question 17

What defines a tenancy at will?

Answer 17

A tenancy that continues until terminated by either party, which can occur at any time and without notice.

Question 18

What is a tenancy at sufferance?

Answer 18

Created when a tenant refuses to vacate the premises after the lease has terminated, controlling temporary tenancy until resolved.

Question 19

What are the circumstances under which a tenant’s duty to pay rent is suspended?

Answer 19

• The premises are destroyed
• The landlord completely or partially evicts the tenant
• The landlord materially breaches the lease

Question 20

What is the implied warranty of habitability?

Answer 20

An obligation in every residential lease requiring landlords to maintain property to be reasonably suitable for basic human needs.

Question 21

What can a tenant do if the landlord breaches the implied warranty of habitability?

Answer 21

• Vacate the premises and terminate the lease
• Withhold or reduce rent
• Remedy the defect and offset costs against rent
• Defend against eviction

Question 22

What is the implied covenant of quiet enjoyment?

Answer 22

A lease provision preventing the landlord from actions that make the premises unsuitable for their intended purposes.

Question 23

What is the Implied Covenant of Quiet Enjoyment?

Answer 23

It prevents the landlord from actions that make the premises unsuitable for their intended purposes, leading to constructive eviction of the tenant.

This covenant is automatically included in every lease, whether commercial or residential.

Question 24

What are the conditions for a constructive eviction to occur?

Answer 24

1. Landlord caused premises to be unsuitable.
2. Tenant notified the landlord.
3. Landlord did NOT correct the problem.
4. Tenant vacates after a reasonable time.

A tenant may withhold rent or seek damages if constructively evicted.

Question 25

Define an assignment in the context of leases.

Answer 25

A complete transfer of the tenant’s entire remaining term under the lease. ## Footnote The landlord can collect rent from either the assignee or the original tenant.

Question 26

What is a sublease?

Answer 26

A transfer of less than the tenant's entire remaining term under the lease. ## Footnote The landlord can only collect rent from the original tenant in a sublease.

Question 27

What is a surrender in lease termination?

Answer 27

A termination of the lease agreement and the landlord-tenant relationship, requiring tenant to return possession and landlord to consent. ## Footnote This releases both parties from their duties under the lease.

Question 28

What constitutes abandonment of a lease?

Answer 28

When the tenant unilaterally returns possession without the landlord’s consent before the lease expires. ## Footnote The tenant must continue paying rent until the landlord finds a replacement tenant.

Question 29

What is the duty to mitigate in lease agreements?

Answer 29

The landlord must make reasonable efforts to re-rent the property if the tenant abandons it or is evicted. ## Footnote This is common under the majority rule; the minority rule does not require mitigation.

Question 30

What are the four elements required for a benefit of a real covenant to run to successors?

Answer 30

1. Writing. 2. Intent. 3. Touch and Concern. 4. Relaxed Vertical Privity. ## Footnote These elements ensure the covenant is enforceable by successors.

Question 31

What are the six elements required for a burden of a real covenant to run to successors?

Answer 31

1. Writing. 2. Intent. 3. Touch and Concern. 4. Strict Vertical Privity. 5. Horizontal Privity. 6. Notice. ## Footnote These requirements ensure successors are bound by the covenant.

Question 32

What is the primary difference between a real covenant and an equitable servitude?

Answer 32

The remedy for a breach: money damages for real covenants and injunctive relief for equitable servitudes. ## Footnote Equitable servitudes have easier requirements for binding successors.

Question 33

What must be proven for an implied reciprocal servitude to be enforced?

Answer 33

1. Intent to create a servitude on all plots. 2. Negative servitude (promise to refrain from doing something). 3. Notice of the servitude. ## Footnote A writing is not required for equitable servitudes created by implication.

Question 34

What is an express easement?

Answer 34

A right held by one person to use another’s land, created by grant or reservation. ## Footnote An express easement must be in writing to satisfy the statute of frauds.

Question 35

What conditions must be met for an implied easement by implication to exist?

Answer 35

1. Division of a single tract of land. 2. Prior use as if there was an easement. 3. Continuous and apparent use after division. 4. Use must be reasonably necessary. ## Footnote This easement arises from the circumstances of land division.

Question 36

Define an implied easement by necessity.

Answer 36

Created when land is divided, and one property becomes virtually useless without the easement. ## Footnote This easement is established due to the necessity that arises from the division.

Question 37

What are the grounds for terminating an easement?

Answer 37

1. Release. 2. Merger. 3. Abandonment. 4. Prescription. 5. Sale to a Bona Fide Purchaser. 6. Estoppel. 7. End of Necessity. ## Footnote Each ground has specific criteria that must be met for termination.

Question 38

What is a fixture?

Answer 38

Tangible personal property attached to real property, treated as part of the real property. ## Footnote A chattel is considered a fixture if there is intent for it to become part of the real property.

Question 39

What are the requirements for a valid land sale contract?

Answer 39

1. Must be in writing and signed. 2. Must contain essential terms (parties, property description, price). ## Footnote These requirements fulfill the statute of frauds.

Question 40

What is the implied covenant of marketable title?

Answer 40

The seller must convey title free from unreasonable risk of litigation at closing. ## Footnote Defects that make title unmarketable must be cured before closing.

Question 41

What is the implied warranty of fitness or suitability?

Answer 41

Protects against latent defects in new construction, ensuring it is safe and fit for habitation. ## Footnote Both initial and subsequent purchasers may recover damages in most jurisdictions.

Question 42

What constitutes a duty to disclose defects?

Answer 42

A seller must disclose material defects that substantially impact value, desirability, or health and safety. ## Footnote General disclaimers do not fulfill this duty.

Question 43

What is the seller's duty regarding material defects?

Answer 43

Most jurisdictions impose a duty on the seller to disclose material defects to the buyer, which are defects that substantially impact the: * Value of the property * Desirability of the property * Health and safety of its occupants ## Footnote General disclaimers (e.g., “as is”) do NOT satisfy the seller’s duty to disclose defects.

Question 44

What is 'Equitable Conversion' in real estate?

Answer 44

In the majority of jurisdictions, the purchaser holds equitable title during the period between the execution of the contract and the closing and delivery of the deed. ## Footnote During this period, the purchaser is responsible for any damages to the property, while the seller retains the right to possess the property.

Question 45

What are the two components of a mortgage?

Answer 45

The two components of a mortgage are: * The Note: The borrower’s promise to repay the debt or loan * The Mortgage: The device that provides security to the note by allowing foreclosure if the borrower defaults ## Footnote The mortgage allows the lender to recover the outstanding debt.

Question 46

What is a Purchase-Money Mortgage?

Answer 46

A purchase-money mortgage is a mortgage where the borrower takes out a loan for the purpose of purchasing property. ## Footnote This type of mortgage directly finances the acquisition of real estate.

Question 47

What is a Future-Advance Mortgage?

Answer 47

A future-advance mortgage is a line of credit used for home equity, construction, business, and commercial loans, often referred to as a 'second mortgage'.

Question 48

What are the three main alternatives to mortgages as security devices?

Answer 48

The three main alternatives are: * Deed of Trust * Installment Land Contract * Absolute Deed ## Footnote Each alternative has different implications for ownership and security interests.

Question 49

What liability does a borrower have after transferring property?

Answer 49

The borrower remains personally liable after the transfer unless: * The lender releases the borrower from obligation * The lender modifies the transferee’s obligation ## Footnote This means the original borrower may still be held responsible for the mortgage debt.

Question 50

What is an Acceleration Clause?

Answer 50

An acceleration clause allows the lender to demand immediate full payment from the borrower upon transfer or when the borrower obtains a second mortgage. ## Footnote This clause can significantly impact the borrower's financial obligations.

Question 51

What is the First in Time Rule regarding foreclosure?

Answer 51

The First in Time Rule states that all surviving debts must be satisfied in chronological order, starting with the oldest, unless exceptions apply. ## Footnote Exceptions include Purchase-Money Mortgages and certain recorded agreements.

Question 52

What are the requirements for a valid deed?

Answer 52

A valid deed must: * Satisfy the statute of frauds * Identify the parties * Describe the property sufficiently * Be delivered and accepted ## Footnote Delivery indicates present intent to transfer, and acceptance is generally presumed.

Question 53

What types of deeds provide different levels of title protection?

Answer 53

The three types of deeds are: * General Warranty Deed * Special Warranty Deed * Quitclaim Deed ## Footnote Each type provides varying levels of protection and warranties regarding the title.

Question 54

What does the Shelter Rule state?

Answer 54

The Shelter Rule allows a person who is transferred property from a bona fide purchaser (BFP) to have the same recording statute protections as the BFP. ## Footnote This means the transferee 'takes shelter' in the BFP's status.

Question 55

What are the three types of notice in recording statutes?

Answer 55

The three types of notice are: * Actual Notice * Constructive Notice * Inquiry Notice ## Footnote Each type of notice affects the rights of subsequent purchasers regarding prior interests in property.

Question 56

What is 'Adverse Possession'?

Answer 56

Adverse possession allows a trespasser to acquire title to land owned by another if their possession is: * Continuous for the statutory period * Open and notorious * Exclusive * Hostile ## Footnote The requirements ensure that the true owner is aware and has the opportunity to reclaim their property.