Real Property

Question 1

Constructive Eviction

Answer 1

When a landlord substantially interferes with the tenant’s use and enjoyment of the property by breaching a duty to the tenant, the tenant’s obligation to pay rent may be excused under the theory of constructive eviction. In order to end a lease before the end of its term by constructive eviction, the landlord must have breached a duty, which caused the loss of the substantial use and enjoyment of the premises, the tenant must give the landlord notice of the problem and reasonable opportunity to cure, and the tenant must vacate the property within a reasonable period of time. Not every interference with the use and enjoyment of the premises amounts to a constructive eviction. Temporary or de minimis acts generally do not amount to constructive eviction.

Question 2

Duty to Repair

Commercial Leases

Answer 2

Under the common law, there was no implied duty on the part of the landlord to repair leased premises. However, the majority of jurisdictions today enforce an implied duty upon the landlord to repair under a residential lease, even when the lease attempts to place the burden on the tenant, except for damages caused by the tenant. In contrast, courts are reluctant to imply a landlord’s duty to repair in commercial leases because the implied warranty of habitability does not apply in commercial leases.

Question 3

Terminating a Lease

Answer 3

1. Automatically upon the expiration of the term.
2. May also occur before the expiration of the term when:
   a. the tenant surrenders the leasehold, and the landlord accepts the return of the leasehold; or
   b. a tenant abandons the leasehold without justification, the landlord may treat the abandonment as an offer of surrender and could accept that surrender by retaking the premises.

Question 4

Tenant abandonment of a leasehold

Answer 4

When a tenant abandons the leasehold, the landlord may treat the abandonment as an offer of surrender and accept such surrender, or the landlord may attempt to** re-rent the premises** on the tenant’s behalf and hold the tenant liable for any deficiency.

Majority rule: require landlords to mitigate damages by making a good faith attempt to re-rent the premises

Question 5

Landlord’s duty to repair

Answer 5

Under the common law, there was no implied duty on the part of the landlord to repair leased premises.
However, the majority of jurisdictions today enforce an implied duty upon the landlord to repair under a residential lease, even when the lease attempts to place the burden on the tenant, (except for damages caused by the tenant).

Courts are reluctant to imply a landlord’s duty to repair in commercial leases because the implied warranty of habitability does not apply in commercial leases.

Question 6

When is an easement terminated?

Answer 6

1. if the owner of the dominant or servient estate acquires fee title to the other estate. The easement is said to “merge” into the title. The merger of property interests results in the extinguishment of the property right.
2. by a writing that expressly** release**s the easement right and complies with the requirements for the creation of a deed
3. Any attempt to convey an appurtenant easement separate from the land it benefits terminates (or “severs”) the easement.
4. if the owner of the easement acts in an affirmative way that shows a clear intent to relinquish the easement right
5. An easement by necessity terminates when the necessity ceases to exist.
6. An easement may be terminated if the owner of the servient estate’s interference with the easement is continuous, actual, open, and hostile use for a specific period.
7. If the servient estate owner changes position to his detriment in reliance on statements or conduct of the easement holder that the easement is abandoned, then the easement holder may be estopped from asserting the easement.
8. If an express easement is granted but not recorded, then, depending on the applicable recording act, the easement may not be enforceable against a subsequent purchaser of the servient estate (not terminated, but cannot be enforced).

Question 7

Prior Use Implied Easement

Answer 7

If the owner of two parcels of land previously used one parcel to benefit the other, then the court may find that, upon the transfer of one parcel, the parties intended the use to continue if that use was continuous, apparent or known, and reasonably necessary to the dominant land’s use and enjoyment

Question 8

Joint tenancy

Answer 8

A joint tenancy exists when at least two people own property with the right of survivorship.

In addition to the right of survivorship, each joint tenant must have the four unities: the right to possess or use the property and equal interests which were created at the same time and in the same instrument

Question 9

Title theory

Answer 9

The granting of a mortgage constitutes a transfer of title.

Minority rule.

A transfer of title severs the joint tenancy and converts it into a tenancy in common.

Question 10

When one party leases their interest in a joint tenancy

Answer 10

There is a split among jurisdictions with respect to joint tenancies when one joint tenant leases his interest. Some jurisdictions hold that the lease destroys the unity of interest and thus severs the joint tenancy, while other jurisdictions believe that the lease merely temporarily suspends the joint tenancy, which resumes upon expiration of the lease.

Question 11

Tenancy in common

Answer 11

A tenancy in common exists when two or more co-owners have an equal right to possess property, but do not have a right of survivorship. In that case, each co-tenant holds an undivided interest with unrestricted rights to possess the whole property, regardless of the size of the co-tenant’s interest.
Each tenant can unilaterally transfer, devise, mortgage, or lease his interest to a third party, without affecting the interest of the other tenants.

Question 12

When one co-tenant receives rent

Answer 12

A co-tenant must account to other co-tenants for rent received from third parties, but can deduct operating expenses, including necessary repairs, when calculating net proceeds. Third-party rents are divided based on the ownership interest of each tenant.

Question 13

What are three corresponding future interests to these three defeasible fees:

1. fee simple determinable
2. fee simple subject to a condition subsequent
3. fee simple subject to an executory condition

Answer 13

1. Fee simple determinable: possibility of reverter (if holder is grantor) or executory interest (if holder is third party).
2. Fee simple subject to a condition subsequent: right of entry/right of reentry/power of termination (holder is grantor and must exercise right to terminate)
3. Fee simple subject to an executory condition: executory interest (holder is third party).

Question 14

Name four real property instruments that must comply with the Statute of Frauds (aside from a land sales contract).

Answer 14

1. Promise to create an interest in real property
2. Assignment of a right to purchase
3. Option contract
4. Promise to give a mortgage or other lien security

Question 15

What kind of tenants have the right to unilaterally partition a piece of property?

Answer 15

A tenant in common or a joint tenant may unilaterally partition property.

(NOTE: A tenant by the entirety does not have this right.)

Question 16

A tenant in common or a joint tenant may unilaterally partition property.

(NOTE: A tenant by the entirety does not have this right.)

Answer 16

A co-tenant must account to other co-tenants for rent received from third parties, and rent is divided based on ownership interest of each tenant.

Question 17

A co-tenant must account to other co-tenants for rent received from third parties, and rent is divided based on ownership interest of each tenant.

Answer 17

1. The fee simple determinable terminates automatically and
2. Full ownership of the property either

returns to the grantor (possibility of reverter) or

transfers to a third party (executory interest).

Question 18

A landlord’s failure to comply with applicable housing code requirements is evidence of a breach of which warranty?

Answer 18

The implied warranty of habitability, which applies to residential leases and is nonwaivable.

Question 19

What is a wild deed?

Answer 19

A wild deed is a recorded deed that is not within the chain of title (i.e.,recorded and indexed, but not in the correct way to give subsequent purchasers notice).

Question 20

As between an assignee and a sublessee, who is in privity of estate with the landlord and thus liable to the landlord for rent and other covenants in the lease?

Answer 20

An assignee is in privity of estate with the landlord, and thus he is liable to the landlord for the rent and any other covenants in the lease.

However, if the assignee reassigns the leasehold to a subsequent tenant, then the privity of estate with the landlord ends and the initial assignee is no longer liable to the landlord based on privity of estate.

Question 21

What are the prerequisites for creating an easement by necessity?

Answer 21

The dominant and servient estates must have been under common ownership in the past, and the necessity arose when the property was severed (which rendered the dominant property virtually useless without the benefit of an easement across the servient estate).

Question 22

What protections does a buyer have with an option contract?

Answer 22

During the time specified in the contract, the buyer is protected against revocation by the grantor and termination if the grantor of the option dies or becomes incapacitated.

Question 23

What is a major difference between a vested remainder subject to open and a contingent remainder?

Answer 23

A vested remainder subject to open is transferred to a group rather than individual, and at least one member of the group is individually ascertainable and entitled to the remainder interest.

A contingent remainder is created in a grantee who is unascertainable.

Question 24

After a mortgaged property is sold at a foreclosure sale, in what order are the proceeds distributed to different stakeholders? (Identify at least four.)

Answer 24

1. Proceeds are used to pay any costs related to the sale.
2. The party who foreclosed on the property is paid, up to the amount outstanding on its mortgage interest.
3. If any money remains, any junior interests are paid in order of their priority.
4. If any money remains, the mortgagor is paid.

Question 25

What are the three common types of recording acts?

Answer 25

1) Notice: A purchaser for value without notice of prior interest prevails. 2) Race: A purchaser for value who records first prevails. 3) Race-notice: A purchaser for value without notice and records first prevails.

Question 26

Explain the two doctrines that govern the rights that a land owner has to take or use water from a watercourse that flows through or adjacent to the owner's land?

Answer 26

Reasonable-use: Favored in the eastern U.S. and allows the owner to make any reasonable use of the water. Water rights cannot be sold or transferred separately. Prior-appropriation: Favored in the western U.S. and states that water rights are determined by priority of beneficial use (first in time, first in right). Water rights can be sold or transferred separately.

Question 27

For a constructive eviction claim to be effective (i.e., tenant no longer has to pay rent), what TWO things must a tenant do if the residential rental property is uninhabitable?

Answer 27

1. Give notice and adequate time for the landlord to correct the problems, AND 2. Vacate the property within a reasonable amount of time

Question 28

What future interest, held by a third party, is not a remainder, and generally cuts short the prior interest upon the occurrence of a specified condition?

Answer 28

An executory interest

Question 29

If a buyer is purchasing property using an installment land contract, when does she obtain legal title?

Answer 29

Buyer obtains legal title upon final payment under the installment payment plan.

Question 30

What are the two types of executory interests? How is each defined?

Answer 30

1. Shifting executory interest: divests the interest of the grantee by cutting short a prior estate created in the same conveyance. The estate “shifts” from one grantee to another on the happening of the condition. 2. Springing executory interest: divests the interest of the grantor or fills a gap in possession in which the estate reverts to the grantor.

Question 31

What is a novation?

Answer 31

A novation is an agreement by the landlord to release the original tenant from liability after an assignment or sublease. Note: Absent a novation, the original tenant remains liable to the landlord for the entire duration of the lease.

Question 32

By what point in time must a seller deliver marketable title?

Answer 32

Seller is not required to deliver marketable title until closing (as sellers often use the proceeds of the sale to satisfy any prior mortgages or liens). For installment contracts, not until delivery.

Question 33

What are the three types of waste that both a tenant of a life estate and a tenant in a leasehold must avoid?

Answer 33

(i) Voluntary waste (affirmative, substantial change); (ii) Permissive waste (deterioration through neglect, failure to preserve, or failure to reasonably protect); and (iii) Ameliorative waste (voluntary waste that does not diminish the value of the property).

Question 34

What remedies does a tenant have when a landlord breaches the warranty of habitability?

Answer 34

If the premises are not habitable, then the tenant may choose to: 1. Refuse to pay rent 2. Remedy the defect and offset the cost against rent 3. Treat the condition as a constructive eviction

Question 35

What estate requires clear language that the interest is measured in terms of a life, not a number of years?

Answer 35

A life estate is a present possessory estate that is limited in duration by a life. Upon the end of the measuring life, title reverts to the grantor or specified remainderman.

Question 36

Who bears the risk of loss if real property is destroyed between execution of a land-sale contract and closing?

Answer 36

In most states, the buyer bears the risk of loss (regardless of whether the buyer takes possession of the property), except when the loss is due to seller's intentional or negligent actions (then seller bears risk).

Question 37

Which covenant is a promise by the landlord not to interfere with the tenant's possession of the leased premises? How is this breached?

Answer 37

The implied covenant of quiet enjoyment, which is implied in every lease. This warranty is breached only when the conduct of the landlord or someone with superior title prevents the tenant from possessing the leased premises.

Question 38

What is a life estate pur autre vie?

Answer 38

A life estate measured by the life of a third party is called a “life estate pur autre vie.”

Question 39

A conveyance by will by a joint tenant of his property interest has what effect?

Answer 39

NONE. The property passes automatically to the remaining joint tenant(s) due to the right of survivorship.

Question 40

When analyzing facts concerning a party's liability for changing the flow of surface water, what three theories should you consider?

Answer 40

1. Common Enemy 2. Natural Flow 3. Reasonable Use

Question 41

What are the three common types of concurrent estates? What unities are required for each?

Answer 41

1. Tenancy in common: Unity of possession 2. Joint tenancy: Unities of possession, interest, time, and title ("PITT") 3. Tenancy by the entirety: Unities of person, possession, interest, time, and title

Question 42

A covenant running with the land means that subsequent owners may be burdened by or may have to enforce the covenant. What are the 6 requirements for a burden to run with the land?

Answer 42

1. Writing to satisfy Statute of Frauds (exception implied reciprocal servitude) 2. Intent 3. Notice 4. Horizontal Privity 5. Vertical Privity 6. Touch and Concern

Question 43

A plaintiff must prove racial intent or purpose in order to establish a violation of the Fourteenth Amendment's Equal Protection Clause. What must a plaintiff show to establish racial discrimination under the Fair Housing Act?

Answer 43

The plaintiff needs to show a disparate racial impact.

Question 44

What is a mortgage?

Answer 44

A mortgage is a security device used to secure payment of a debt.

Question 45

A sublessee is not liable to the landlord for rent or any other covenants in the lease unless what happens?

Answer 45

If the sublessee expressly assumes the rent covenant (or any other covenants), then the sublessee becomes personally liable to the landlord.

Question 46

What durational language is often used with a fee simple determinable?

Answer 46

So long as While During Until

Question 47

In most states, there is a rebuttable presumption that a conveyance to two or more persons creates what kind of tenancy?

Answer 47

Tenancy in common (which requires only the unity of possession).

Question 48

For a deed to be effective, what must the grantor and grantee do?

Answer 48

In general a deed transfers title only when 1. The grantor INTENDS to convey an interest, 2. The grantor DELIVERS a deed to the grantee, AND 3. The grantee ACCEPTS the deed. Tip: When comparing and contrasting questions about delivery, always look to facts indicating the grantor's INTENT.

Question 49

Regarding the effect of a mortgage on a joint tenancy, what is the difference between a title theory jurisdiction and a lien theory jurisdiction, and which is the majority rule?

Answer 49

Lien theory states (the majority): no severance - the mortgage is only a lien on the property Title theory states (the minority): severance - the joint tenancy is converted into a tenancy in common with respect to the mortgaging tenant

Question 50

What two possible components denote a contingent remainder?

Answer 50

The remainder is created in an unascertainable grantee, OR if it is subject to a condition precedent to the grantee's taking.

Question 51

What is an ouster?

Answer 51

Ouster occurs when a co-tenant refuses to allow another co-tenant access to the property. In this event, the ousted co-tenant may seek an injunction to gain access to the property and to recover the value of the use of the property for the time during which the co-tenant was denied access to the property.

Question 52

What are the three requirements in a land sale contract to satisfy the Statute of Frauds?

Answer 52

It must be in writing, signed by the party to be charged, AND contain all essential terms (parties, description of property, price/payment info).

Question 53

Regarding a landlord's tort liability, the modern trend is to hold them to a general duty of reasonable care. This means that a landlord may be liable for what three things?

Answer 53

A landlord may be liable for: 1. Existing defects prior to the tenant’s occupation of the premises 2. Failure to make repairs required by a housing code 3. At times, the criminal activity of third persons who injure tenants

Question 54

What are the four exceptions to the Statute of Frauds writing requirement?

Answer 54

1. Partial performance 2. Full performance 3. Detrimental reliance 4. Admission

Question 55

What future interest is retained by a grantor when a fee simple determinable is conveyed?

Answer 55

A possibility of reverter is a future interest retained by a grantor when a fee simple determinable is conveyed.

Question 56

What are the four types of landlord-tenant estates?

Answer 56

1. Tenancy for years 2. Periodic tenancy 3. Tenancy at will 4. Tenancy at sufferance

Question 57

What is a landowner's liability if he excavates on his land and causes the adjacent, undeveloped land to collapse or subside?

Answer 57

The excavating land owner is strictly liable.

Question 58

What was the common law Rule Against Perpetuities (RAP) designed to do?

Answer 58

RAP was designed to prevent interests from vesting in the too distant future. Tip: RAP is concerned with contingent interests that may remain contingent beyond the lives in being, plus 21 years. In other words, RAP settles the time within which a contingent remainder must vest in order to be valid. An interest is too remote if it depends upon a contingency, which could possibly happen after the specified period of lives in being, plus 21 years.

Question 59

To which future interests will the Rule Against Perpetuities (RAP) never apply?

Answer 59

RAP is not an issue when analyzing future interests that revert to the grantor (i.e., reversion, possibility of reverter, right of reentry).

Question 60

What are the two types of mortgages?

Answer 60

1. Purchase money mortgage: A person takes out a loan for the purpose of purchasing property 2. Future advance mortgage: A line of credit used for home equity, construction, business, and commercial loans (“second mortgage”)

Question 61

What is an option contract?

Answer 61

In an option contract, one party acquires the right to purchase property, usually for a specific period of time, in exchange for consideration. (i.e., The buyer usually pays for the option.)

Question 62

What is a constructive eviction?

Answer 62

A constructive eviction occurs when the landlord breaches a duty to the tenant, such as failing to make a repair, that substantially interferes with the tenant’s use and enjoyment of the leasehold (e.g., fails to provide heat or water).

Question 63

How do the remedies available for breach of a real covenant differ from the remedies available for breach of an equitable servitude?

Answer 63

The remedy for breach of a real covenant is money damages, while the remedy for breach of an equitable servitude is an injunction. Tip: When deciding whether to analyze facts under a real covenant analysis or an equitable servitude analysis, note what the party is seeking (damages or an injunction).

Question 64

Why is the following grant a fee simple absolute rather than a fee simple determinable?: Grantor conveys Blackacre "to B to be used for a horse farm." B does not use Blackacre as a horse farm.

Answer 64

Grantor's language merely indicates his desire, intent, or purpose for which the property should be used rather than imposing a condition that could limit the duration of the estate.

Question 65

What are the requirements for adverse possession?

Answer 65

Possession must be Continuous, Actual, Open and Notorious, Hostile, and Exclusive for the statutory period. Mnemonic: ANOCHE ("last night" in Spanish) (Note: Government-owned land cannot be adversely possessed.)

Question 66

What are the six covenants of title that a grantor guarantees with a general warranty deed?

Answer 66

SIX Covenants of a General Warranty Deed Present covenants: 1) Covenant of seisin, 2) Covenant of the right to convey 3) Covenant against encumbrances Future covenants: 4) Covenant of quiet enjoyment 5) Covenant of warranty 6) Covenant of further assurances

Question 67

In a lien theory state (which is the majority), a mortgage interest is treated as a lien that does not affect a joint tenancy until foreclosure. What does a mortgage do to a joint tenancy in a title theory state?

Answer 67

In a title theory state, the joint tenancy is severed upon the granting of the mortgage, and the interest is converted into a tenancy in common.

Question 68

What is a right of reentry and who retains this right?

Answer 68

A right of reentry is a future interest retained by the grantor after a fee simple subject to a condition subsequent is granted.

Question 69

What happens when a casualty occurs during the time between execution of a land-sale contract and closing, and the seller is carrying insurance?

Answer 69

Any insurance proceeds the seller receives must be credited against the buyer's purchase price.

Question 70

Groundwater is natural water that flows or lies under the surface and either percolates to the surface naturally or is tapped by a well. What are the four doctrines that govern groundwater rights?

Answer 70

1. Prior-appropriation 2. Correlative-rights 3. Reasonable-use 4. Common-law doctrine of absolute ownership

Question 71

What does it mean if a remainder is subject to a condition precedent?

Answer 71

The condition must first be met or satisfied for a remainderman to ever take possession. Example: Carlos conveys his bakery "to A for life, then to B if B eats cake every day for one year." B's remainder is contingent because she must eat cake every day for one year before she can take possession.

Question 72

Restrictions on the transferability of property (restraints on alienation) are generally prohibited. However, what two restraints on alienation can be valid on a life estate?

Answer 72

A forfeiture restraint (property forfeited if interest owner attempts to transfer) and a promissory restraint (promise by interest holder not to transfer) can be valid on a life estate.

Question 73

What is the difference between a sublease and an assignment?

Answer 73

An assignment is a complete transfer of a tenant's remaining lease term; a transfer of less than that is a sublease. Tip: If the tenant retains a reversionary interest in the leasehold, then the transfer is a sublease.

Question 74

What happens when an attempt to create an easement fails due to the Statute of Frauds?

Answer 74

A license results when there is a failed attempt to create an easement. Example: Grantee receives a license when grantor orally conveys an easement for more than one year.

Question 75

A tenant is considered a holdover tenant when he continues to occupy the premises without the landlord's consent and after the expiration of the lease. What two remedies does a landlord have?

Answer 75

The landlord may evict, or the landlord may bind the holdover tenant to a new periodic tenancy.

Question 76

What is attornment and how does it happen?

Answer 76

Attornment is the tenant's acknowledgement of a new landlord. This can be accomplished (i) in writing, or (ii) by making rent payments to the new landlord.

Question 77

What is a retaliatory eviction?

Answer 77

A retaliatory eviction is the unlawful eviction of a residential tenant by a landlord in response to the tenant complaining, in good faith and with reasonable cause, about a housing, building, or safety code violations.

Question 78

A purchase-money mortgage (PMM) is often used by buyers who don't have enough money for a traditional down-payment or who cannot get a large enough bank mortgage. The PMM funds must be used to purchase the property and are given either to the seller as part of the purchase price or to a third party lender. In the event that a mortgagor-borrower defaults, who has priority if there is a seller PMM and third party lender PMMs?

Answer 78

A seller's PMM has priority over a third-party's PMM. Priority of third party PMMs against each other are determined chronologically (subject to applicable exceptions).

Question 79

What terms must a valid deed contain?

Answer 79

(i) Identities of the grantor and the grantee, (ii) Words of transfer, (iii) Description of the property interest being transferred, and (iv) Grantor’s signature.

Question 80

What is an actual eviction?

Answer 80

An actual eviction, as opposed to a constructive eviction, occurs when the landlord removes the tenant from the premises. This total eviction terminates the lease and ends the tenant’s obligation to pay rent.

Question 81

What future interest is held by the grantor who grants a life estate but does not convey the remaining future interest to a third party?

Answer 81

A reversion (or “reverter”) A reversion is fully transferable inter vivos, devisable by will, and descendible by inheritance. Reversions are not subject to the Rule Against Perpetuities.

Question 82

How is the scope of an easement determined?

Answer 82

The scope of an express easement is defined in the first instance by its terms. If the terms are ambiguous, courts look to the intent of the parties. The scope of an easement by necessity is determined by the extent of the necessity. The scope of an easement by implication is determined by the existing quasi-easement. The scope of an easement by prescription is limited to the nature and extent of the adverse use.

Question 83

What are two major exceptions to a tenant's duty to pay rent?

Answer 83

1. Destruction of the premises not due to tenant's fault, or 2. Material breach of the lease by the landlord (e.g., breach of the covenant of quiet enjoyment or the implied warranty of habitability)

Question 84

What is marketable title?

Answer 84

Marketable title is title free from defects (such as undisclosed easements, future interests) regardless of the type of deed. Essentially, it is title that is free from an unreasonable risk of litigation.

Question 85

What is the fifth unity unique to a tenancy by the entirety?

Answer 85

The fifth unity, unique to tenancies by the entirety, is the unity of person. The 5 unities are: Possession, interest, time, title, and person.