Real Property Flashcards
(14 cards)
Present Estates: Fee Simple Absolute; Defeasible Fees; Life Estate; Waste
Fee Simple Estates: Type; Language; Future Interest
Life estate: characteristics; rights/obligations
Fee Simple Absolute
* Freely alienable, devisable, and descendible
* Potentially infinite in duration and
* Not accompanied by a future Interest
Defeasible Fees
* Freely alienable, devisable, and descendible
* Potentially infinite in duration. BUT may be terminated by occurrence of an event
Fee simple determinable
* Durational—”so long as,” “during,” “until”
* Future interest in grantor—possibility of reverter
Fee simple subject to condition subsequent
* Conditional—”but if,” “provided that,” “unless”
* Future interest in grantor—right of entry
Fee simple subject to executory interest
* Durational or conditional
* Future interest in third party—executory interest
Life Estate
* A life estate is a present possessory estate that is:
* Limited in duration by a life
* Fully transferable during measuring life (grantee’s life or pur autre vie)
* Automatically terminated at end of measuring life
* Potentially defeasible
* A life tenant has the right to collect rent on the property, and to lease, sell, or mortgage it
Doctrine of Waste
* A life tenant must deliver property to future interest holder in substantially same condition that it was in when he took possession
Permissive waste
* Duty to make reasonable repairs to the extent that the life tenant receives a finacnial benefit from the property (NOT responsible for damage caused by natural forces or third parties)
Affirmative Waste
* Duty to prevent dimished property value
Ameliorative Waste
* Permitted when change results in reasonble use of property, unless future-interest holders have reasonable objection
Future Interests: Possibility of Reverter; Reversion; Remainder; Contingent; Vested; Special Cases; Executory Interests
- Possibility of Reverter is future interest retained by grantor when fee simple determinable is conveyed
- Right of Reentry is future interest retained by grantor after fee simple subject to condition subsequent is granted
-
Reversion is future interest held by the grantor who grants a life estate but does not convey the remaining future interest to a third party
Remainder - If possession goes to a third party (transferee) after the life estate ends, then the third party takes a remainder
- A remainder may be:
- Contingent—Created in an unascertainable grantee or subject to an express condition precedent to the grantee’s taking
-
Vested—Given to an ascertained grantee and not subject to a condition precedent. If the holder of a vested remainder dies, then the interest passes to the holder’s heirs
- Vested remainder subject to open exists when: (1) A remainder interest is transferred to a group rather than named individuals; and (2) At least one member of the groups is individually ascertainable and qualified to take possession; but (3) That person might be required to share the interest with other members of the group (i.e., “subject to partial divestment”)
- Vested remainder subject to complete divestment indicates that the occurrence of a condition subsequent will completely divest the remainder interest
Special Cases
* Doctrine of worthier title prevents against remainders in a grantor’s heirs. Creates a presumption of a reversion to the grantor
* Rule in Shelley’s Case prevents against remainders in a grantee’s heirs. Uses the doctrine of merger to create fee simple
Executory Interests
* A future interest in a third party that is not a remainder that cuts the prior estate short upon the occurrence of a specified condition (Re: an executory interest is the only other future interest held by a third party)
* Two kinds of executory interests:
* Springing executory interests: Divest the grantor
* Shifting executory interests: Divest a prior grantee
Rule Against Perpetuities; Rule; Method; RAP Violations; Special Cases; Rule of Convenience; Exceptions
Under RAP, specific future interests are valid only if they must vest or fail by the end of a life in being plus 21 years (if there is any possibility that it will no be known whether the interests will vest or fail within that period, then RAP has not been satisfied)
When
* Inter vivos transfers: Interests created at the time of the grant
* Devise: Interest created at testator’s death
What
* RAP applies to:
* Contingent remainders;
* Executory interests;
* Class gifts (subject to open), if not closed by the rule of convenience
Who
* Relevant life: Person who affects vesting, usually mentioned or implied by the grant
* Validating life: Person who tells us whether or not the interests vests within the perpetuities period
RAP Violations
* Strike out the violating interest
Special Cases
* Special Rule: If the gift to any member of the class is void under RAP, then the gift is void as to all members of the class (The “all or nothing” rule)
Rule of Convenience
* Can save class gift from being invalidated under RAP
* For purposes of avoiding RAP, the class closes as soon as a member of the class is entitled to immediate possession
Exceptions to RAP
* Charities
* Options
* Wait and See Approach
* Cy Pres
Concurrent Estates; When arises; Types; Rights and Obligations; Expenditures; Partition;
A cotenancy arises when two or more persons own real property simultaneously
Tenancy in common
* Default tenancy for property conveyed to joint owners with:
* Separate and possibly unequal shares in the property
* No right of survivorship
Joint tenancy
* Right of survivorship plus four unities (PITT):
* Possession—equal right to possess the entire property
* Interest—undivided and equal shares in the property
* Time—interests created at the same time
* Title—interests created in the same instrument
Tenancy by the entirety
* Joint tenancy between married persons
Transferability
* Tenancy in common: Alienable during life; Divisible; Inheritable
* Joint tenancy: Alienable during life (but severs the tenancy)
* Tenancy by the entirety: Alienable with the spouse’s consent
Rights and Obligations
* Right to possess the whole. When cotenant refuses to allow cotenant access, an ouster occurs
Expenditures and Income
* A cotenant can collect contribution for share of necessary property-related expenses (e.g., mortgage payments)
* A cotenant cannot demand contribution from other cotenant for repairs
* A cotenant cannot demand contribution for improvements
* A cotenant must account to other cotenants for rents received but can deduct expenses, including necessary repairs
Partition
* When property divided by agreement or involuntarily by court action. Partition can occur:
* In kind (preferred)—court divided property into distinct physical portions
* By sale—proceeds among cotenants if division not practicable or fair
* Cotenants may agree to not partition so long as agreement is clear and time limitation reasonable
Fair Housing Act; Who’s not covered
FHA prohibits discrimination based on race, color, religion, national origin, sex, disability, or familial status in the sale, rental, and financing of dwellings. It also prohibits advertisements that states discriminatory preference
Who’s not covered?
* Single-family housing sold/rented without broker†
* Ms. Murphy’s Boarding House†
* Religious organizations and private clubs
†But are still subject to advertising prohibitions
Landlord and Tenant Part 1: Types of Tenancies
Creation, duration, termination
Term of years
* Creation: Agreement (i.e., lease)
* Duration: Fixed period (e.g., 1 month, 3 years)
* Termination: End of term (automatic); Breach of certain covenants (e.g., rent, habitability)
Periodic tenancy
* Creation: Agreement; Presumed when the lease has no specified termination date; Operation of law (e.g., holdover tenant)
* Duration: Periodically renews until terminated
* Termination: End of period (proper notice required); Breach of certain covenants
Tenancy at will
* Creation: Agreement; Implied when a person is allowed to possess the premises without paying rent
* Duration: Indefinite period
* Termination: At any time (with reasonable notice)
Tenancy at sufferance
* Creation: Implied when the tenant keeps possession after the lease expires (i.e., holdover tenancy)
* Duration: Continues until terminated
* Termination: Landlord evicts; Tenant vacates; Landlord accepts rent (forms a periodic tenancy)
Landlord and Tenant Part 2: Duties of the Tenant; Landlord’s Remedies
Duties of the Tenant
* Duty to Pay Rent unless premsies destroyed or the landlord commits a material breach of the lease
* Duty to Avoid Waste
* Duty to Repair
* Nonresidential lease: tenant liable if lease specifies that tenant must repair and maintain property (except damage caused by landlord)
* Residential lease: lease provision that places burden of repair on tenant is void, but tenant may be required to notify landlord of need for such repairs
Landlord’s Remedies for Tenant’s Breach
* Tenant fails to pay rent: landlord can terminate lease and enforce forfeiture clause (if any) to regain possession of premises. But most states preclude recovery of future rent (i.e., anticipatory repudiation inapplicable)
* Tenant pays rent late: landlord entitled to damages and may remove tenant if delay constitutes a material breach of lease
* Tenant who unjustifiably abandons leasehold surrenders rights under lease:
* If landlord accepts surrender, lease is terminated and tenant not liable for future rent
* If landlord rejects surrender, landlord may enforce lease but must mitigate damages
* Tenant refuses to leave: Landlord may (1) evict holdover tenant after tenant gets written notice to vacate; or (2) bind holdover tenant to new periodic tenancy
Landlord and Tenant Part 3: Duties of the Landlord; Remedies for breach; Assignment and Subletting
Duties of the Landlord
(1) Give possession
* Requirements:
* English (majority) rule—deliver actual physical possession
* American (minority) rule—deliver the legal right of possession
* Remedies for Breach: Refuse to pay rent to acquire possession; Terminate the lease; Seek damages for time without possession
(2) Repair
* Requirements:
* Majority rule—implied in residential leases, even when the lease attempts to place burden on tenant
* CL—no implied duty
* Remedies for Breach: Treat as constructive eviction or violation of warranty of habitability
(3) Warranty of habitability
* Requirements: Implied in most residential leases; Maintain property so that it is reasonably suited for residential use; Prevent or correct conditions that substantially threaten tenant’s health or safety
* Remedies for Breach—notify landlord and give reasonably opportunity to cure before:
* Withholding rent
* Remedying the defect and deducting cost from rent or
* Defending against eviction
(4) Covenant of quiet enjoyment
* Requirements: Implied in all leases; Prevent interference with the tenant’s right to possession; Take action against another tenant’s nuisance-like behavior and control common areas
* Remedies for Breach:
* Treat as actual eviction if landlord removes tenant from entire premises (terminates lease and duty to pay rent)
* Treat as partial eviction if tenant is removed from portion of premises:
* By landlord—all rent is excused
* By third party with superior claim—reasonable rent still owed for remaining premises
* Treat a substantial interference as a constructive eviction
Constructive Eviction
* Landlord breaches duty to tenant that substantially interferes with tenant’s use and enjoyment of leasehold
* Tenant gives notice and adequate time to permit landlord to fulfill his duty
* Landlord fails to do so and
* Tenant vacates property within reasonable amount of time
Assignment and Subletting
* Lease freely assigned or sublet. If lease requires landlord’s permission to transfer but silent as to standard, then landlord may:
* Deny permission only for commercially reasonable reason (majority rule) or
* Deny permission at his discretion
* Right to object waived if landlord knows and does not object
Note: a tebabt may justifiably abandon leased property
The Contract of Sale
Formation: Statute of Frauds; Exceptions;
Performance: Marketable Title; Timing Is of the Essence; Implied Warranty of Fitness; Duty to Disclose Defects; Merger
Remedies for Breach: Damages; Specific Performance
Equitable Conversion
SOF requires that a real estate K (1) Be in writing; (2) Be signed by the party to be charged; and (3) Contain all the essential terms:
* Identify parties
* Words of intent
* Property description
* Sales price
Exceptions to SOF:
* Part performance—(a) Payment of all or part of purchase price; (b) Possession by purchaser; and/or (c) Substantial improvement of property by purchaser
* Full performance—Seller actually conveys real property interest
* Detrimental reliance—Party seeking enforcement reasonably relied on K and would suffer hardship without enforcement
PERFORMANCE
Marketable Title
* Implied covenant of marketable title that guarantees title free of undisclosed defects that create unreasonable risk of litigation
* If seller fails to deliver marketable title on day of closing, buyer may (1) rescind K and recover out-of-pocket costs, (2) sue for breach and seek damages, or (3) bring action for specific performance
Time is of the essence—and strict adherence to closing date required—only when expressly stated in K of asle or implied by circumstances. But even wne time not of essence, party thait fails to render performance on date of closing is in breach and may be liable for incidental losses
Implied Warranty of Fitness or Suitability
* Implied in sale of newly constructed homes and covers latent construction defects
* Suits must be brought within reasonable time after discovering defect
* Warranty may be disclaimed by clear and unambiguous language
Duty to disclose—seller must disclose all known material physical defects if not readily observable
Merger
At closing, K of sale no longer governs transaction. Buyer muts sue under deed
Remedies for Breach
* Nonbreaching party can recover expectation damages
* Seller may retain earnest money if buyer breaches K
* Liquidated-damages clause generally efnorceable if amount reasonable
Specific performance
Equitable Conversion
* Buyer responsible for risk of loss between signing K and closing
Titles
Adverse Possession; Constructive
Delivery and Recording of Deeds
Types of Deeds
Covenants of Title
Adverse Possession
* Allows person in adverse possession to acquire good title to piece of property. Four elements:
* Exclusive—Possession cannot be shared with TO
* Continuous—Not literal. Seasonal or infrequent use may be OK if use consistent with type of property; adverse possessor may tack onto previous possessor’s time if they are in privity
* Hostile—Without owner’s permission and demonstrate intent to claim land
* Open and notorious—cannot be hidden; use must be such that it would put a TO on notice
* AP generally traces legal boundaries of property. But AP who enters under color of title from invalid instrument is in constructive possession of rest of land described in instrument
Delivery and Recording of Deeds
* Delivery—grantor must intend to make present transfer. If grantor keeps deed, there is presumption grantor did not intent d to make present transfer. Parol evidence admissible
* Acceptance generally presumed
* Deed Requirements:
* Written and signed by grantor
* Identifies grantor and grantee
* Identifies land (with reasonable certainty)
* Includes words of transfer
Recording Acts
* Establish priority between conflict claims. If act does not govern transaction, CL “first in time, first in right” rule
* Only purchasers entitled to protection under recording act, so donee generally not entitled
* Whether subsequent purchaser had notice of prior conflicting interest tested at time of conveyance. Three types of notice: Actual; Inquiry; and Record
Types of Deeds
Covenants of Title
Present covenants
* Seisin—Grantor owns interest being conveyed
* Right to convey—Grantor has legal right to convey interest
* Against encumbrances—There are no encumbrances against interest conveyed
Future covenants
* Warranty—Grantor will defend and compensate grantee for lawful claims made against grantee’s title
* Quiet enjoyment—Grantee’s possession and enjoyment will not be distrubed by another’s lawful claim of title
* Further assurances—Grantor will take any actions reasonbly necessary to perfect grantee’s title
Restraints on Alienation
* Restriction on transferring property
* Disabling retraint—Total prohibiton on transfer of property. Always void
* Forfeiture restraint—Property forfeited if interest holder attempts to transfer it. Restraints on future interest or life estate may be valid
* Promissory retraint—Promise by interest holder not to transfer. Enforceable by injun ction or suit seeking damages
Mortgages; Foreclosure; Priority of Interests
Priority
First in time, first in right rule subject to following exceptions:
* Purchase-money mortgage—This type of mortgage takes priority over prior interests
* A properly recorded mortgage might take priority over a prior unrecorded interest
* Mortgage modification—The modified portion is subordinate to existing junior interests to extent that it materially prejudices those interests
Disputes About the Use of Land: Easements; Creation; Transfer; Termination
Easements are either appurtenant or in gross, and they will give the holder a right that is either affirmative or negative
Creation
- (1) Express easements — Affirmatively created by parties in writing that satisfies requirements for a deed
- (2) Easement by necessity—implied if
- (a) there was a unity of estates;
- (b) common ownership was severed; and
- (c) an easement is absolutely necessaryt to use and enjoy the land
- (3) Easement by implication — Arises when owner of two parcels used on parcel to benefit the other and then transfers ownership of one of the parcels. Court may find that parties intended for use to continue if prior use (1) was continuous, (2) was apparent or known, and (3) is reasonably necessary to dominant land’s use and enjoyment
- (4) Easement by prescription — Created using similar requirements to AP but without exclusivity requirement
- (5) Easement by estoppel—Good-faith, reasonable, detrimental reliance on permission by servient estate holder to make limited use of property can create easement by estoppel if necessary to prevent injustice
Transfer
* Easement appurtenant automatically transfers when land is conveyed
* Easement in gross—The burden (not the benefit) automatically transfers)
Terminated by:
* Destruction of servient estate
* Abandonment (clear intent to relinquish easement right)
* Merger
* Prescription
* Estoppel
* Release (satisfying SOF)
Disputes About the Use of Land: Covenants; Equitable Servitudes
How enforced; requirements
Unlike easements, real covenants and equitable servitudes restrict the right to use real property or impose obligations on owner
A covenant can be enforced by and against subsequent landowners as a matter of property law if the covenant runs with the land:
* Writing—The covenant must comply with SOF
* Intent—The parties must intend for rights and duties to run with the land
* Touch and concern
* Notice (burden only) — A purchaser without notice of burdening covenant is not bound by it if purchaser is protected by recording act
* Privity
* Horizontal privity—For the burden to run, the original parties must have privity of estate at time covenant is agreed upon
* Vertical privity—For burden to run, the successor must hold an estate of same duration as original party. For benefit to run, the successor must hold some portion of the original party’s property interest
Equitable Servitudes
* Agreements about land that are enforced at equity by injunction when following requirements met:
* Writing
* Intent
* Touch and concern
* Notice (burden only)
* Note that implied reciprocal servitudes typically arise in planned subdivisions and are enforceable when following requirements met:
* Intent to create servitude on all plots (i.e., common scheme)
* Servitude must be negative
* Party against whom enforcement sought must have notice (common scheme or plan gives implied notice)
Zoning
Re: Zoning regulations do not rise to level of taking unless they eliminate all economically viable use. Unless they violate fundamental right, zoning ordinances need only satisfy rational-basis test. See also Equal Protection Clause and FHA
Governmental regulation of land use
Treatment of Existing Nonconforming Property
* Most states permit imposition of reasonable time limit on nonconforming use (grandfathered in)
Treatment of Post-Ordinance Nonconforming Property
* Owner may request variance by establishing that:
Variance does not deviate from comprehensive zoning plan and
Compliance with zoning ordinance would unnecessary hardship
