Real Property Flashcards
(316 cards)
1
Q
What are the different ways property can be transferred (alienated)?
A
1) by sale
2) by gift
3) by devise (transfer by will)
4) by intestate succession
2
Q
fee simple
A
the largest possessory estate because it is capable of lasting forever. it is inheritable…upon the owner’s death, the owner can pass it by will or by intestate succession. it can also be transferred by gift or sale during the owner’s life.
3
Q
how to create a fee simple interest?
A
look for magic words “and his/her heirs”…however, these words ARE NOT required. “O to A” and “O to A and her heirs” are the same thing.
4
Q
Watch out for ambiguous grants…if ambiguous, what does the grant create?
A
fee simple…for example “Oliver conveys black acre to Anna forever.” This means Anna has a fee simple absolute interest.
5
Q
what are precatory words?
A
words such as “my hope and wish” are not enough to show actual intent.
6
Q
What are defeasible fees?
A
fee that:
1) may be terminated by the occurrence of an event;
2) capable of lasting forever but also of being terminated early;
3) conditions ill cut short the fee simple.
7
Q
what is a fee simple determinable?
A
it is limited by specific durational language (“so long as”, “while”, “during”, “until”).
8
Q
What is fee simple subject to condition subsequent?
A
Limited by specific conditional language (“but if”, “provided that”, “on the condition that”)…focus not he language to the grantor…. it suggests that the grantor must exercise a right in order to take possession. For example: “To Anna, but if the land is not farmed, Oliver may re-enter and re-take the property.”
9
Q
Possibility of reverter
A
this is a future interest held by a grantor following a fee simple determinable. The interest vests automatically after the durational period ends.
10
Q
what if the future interest following a fee simple determinable is held by a third party, rather than the grantor?
A
then the future interest is an executory interest.
11
Q
right of entry
A
this is a future interest held by the grantor following a fee simple subject to condition subsequent. It does not vest automatically and it must be reclaimed. Right of entry is also known as the power of termination.
12
Q
Fee simple subject to executory interest
A
This will end upon the happening of an event and the future interest will vest in a third party (someone other than the grantor). The future interest is held by another transferee and not the grantor.
13
Q
what is an executory interest?
A
A future interest that will cut short, or terminate, an earlier interest. The word for terminating a prior interest is to “divest.”
14
Q
What is a life estate?
A
a present estate that is limited by a life.
15
Q
Whose life is a life estate limited by?
A
Oliver conveys blackacre “to Anna for life”…this life estate would be measured against Anna’s life. However, it can be limited by another life. For example: “to Anna for Ben’s life”….this is known as a life estate “pur autre vie” (meaning measured against the life of someone else)
16
Q
what are the magic words that create a life estate?
A
“for life”
17
Q
If it is ambiguous as to whether a life estate was created, what should you do?
A
look at the grantor’s intent to create an estate that will end upon the death of the measuring life.
18
Q
If Oliver conveys blacker to “Anna for life” and then Anna transfers her interest to Ben…when will Ben’s interest terminate?
A
When Anna dies.
19
Q
Can a life tenant (of a life estate measured by the life tenant’s life) pass the property by will?
A
No, the life estate ends at the life tenant’s death.
20
Q
Can a life tenant (of a life estate measured by the life tenant’s life) pass the property by intestate succession?
A
No, the life estate ends at the life tenant’s death.
21
Q
reversion v remainder
A
reversion: if a possession of the land goes back to the grantor after the life estate ends, the the grantor retains a reversion.
remainder: if possession of the land goes to a third party (transferee) after the life estate ends, then the third party takes the remainder.
(reversion = back to grantor, remainder = to third party).
22
Q
when does the waste doctrine come into play?
A
when more than one party has an interest in the same piece of real property.
23
Q
what are the 3 kinds of waste?
A
1) affirmative waste
2) permissible waste
3) ameliorative waste
24
Q
affirmative waste
A
waste caused by voluntary conduct which causes a decrease in value
25
permissible waste
waste caused by neglect toward the property, which causes a decrease in value.
26
ameliorative waste
special situation where a life tenant or other person in possession changes the use of the property and actually increases the value of the property.
27
Is the doctrine of waste unique to estates and future interests?
Nope,
other situations where the doctrine of waste applies include:
1) landlord v tenant
2) co-tenant out of possession v tenant in possession (concurrent estates)
3) mortgage (bank/lender) v. mortgagor (borrower)
28
how to spot a waste problem?
1) do multiple parties have simultaneous interests? (life tenant, remainder, future interests, landlord v. tenant?)
2) is there a change in the value of the property due to the actions/inactions of the party in possession?
3) will the waste substantially change the interest taken by the party out of possession?
29
a remainder is a future interest that follows what present possessory estate?
life estate
30
Can a remainder follow a vested fee simple?
No because a future interest following a vested fee simple would have to divest the prior interest (the fee simple) but a remainder does not function that way because it instead waits for the prior interest to end.
31
What are the two main kinds of remainder interests?
1) vested
2) contingent
32
What is a vested remainder?
An interest that is:
1) given to an ascertained grantee (i.e., someone who can be identified); and
2) not subject to a condition precedent (i.e., there is no condition that must be satisfied in order for the interest to vest)
If the remainder fails either 1 or 2, it is a contingent remainder.
33
what is a vested remainder subject to open?
A vested remainder in a class gift; and full class membership is unknown. At least one person in the class must vest for it to be vested subject to open; if no one in the class has vested, the remainder is contingent.
34
what is the term for when all members of a class are identified?
the class is closed.
35
Does RAP apply to a vested remainder subject to open?
Generally yes
36
Rule of convenience
a class closing mechanism to avoid application of RAP to a class gift. If the grant does not have an express closing date, the rule of convenience closes the class when any member of the class becomes entitled to immediate possession.
37
doctrine of worthier title
prevents against remainders in a grantor's heirs. It creates a presumption of a reversion to the grantor.
38
rule in Shelley's case
prevents against remainders in a grantee's heirs. Uses the doctrine of merger to create a fee simple.
39
are Executory Interests subject to RAP?
Yes
40
What is an executory interest?
a future interests that cuts short (divests) a prior vested interest.
41
springing vs shifting executory interest
springing = divests the grantor
shifting = divests a prior grantee
tip for identifying the difference:
count the parties!
if there are two parties (grantor + grantee) it is most likely a springing executory interest because the grantee will divest the grantor.
If there are three parties (grantor + grantee + grantee) it is most likely a shifting executory interest because a grantee will divest another grantee (the executory interest will shift from one grantee to another).
42
When are interests created? (inter vivos v devise)
inter vivos = interests created at the time of the grant
devise (will) = interests created at testator's death, not when the will is drafted.
43
what interests does RAP apply to?
1) contingent remainders
2) executory interests
3) class gifts (subject to open), if not closed by rule of convenience.
4) doesn't apply to vested remainders UNLESS subject to open
44
relevant vs validating life
relevant life = person who affects vesting, usually mentioned or implied by the grant (ex: prior life tenant, the parent where a conveyance is made to a child)
validating life = person who tells us whether or not the interest vests within the perpetuities period (lifetime plus 21 years). The validating life must have been alive when the interests were created; it can validate her own interest, and if there is no validating life, then the interest is no good and we strike it from the grant, if there is a validating life, the interest is good.
45
What is an exception to the "bad as to one, bad as to all" rule for class transfers?
transfers of a specific dollar amount to each class member are tested separately, even though RAP may fail as to some members of the class.
46
Is RAP about whether an interest vests or fails?
Nope, it is about whether we will KNOW if it vests or fails. Cannot have uncertainty.
47
What do we do if there is a RAP violation?
we strike out the violating interest, as if the interest was never created in the first place.
48
RAP and class gifts (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).
49
Does property law assume that anyone who is alive can still have children?
Yes
50
what are the two exceptions to the all or nothing rule relating to class gifts?
1) transfers of a specific dollar amount to each class member, and
2) transfers to a subclass that vests at a specific time, ("to the children of B, and upon the death of each, to that child's issue")
51
Does RAP apply to a gift from one charity to another charity?
Nope...the gift to the alternate charity is NOT subject to RAP.
52
Does RAP apply to an option held by a current tenant to purchase a fee interest in the leasehold property?
Nope...nor does it apply to an option (or right of first refusal) in a commercial transaction.
53
What is the "wait and see approach"?
the traditional RAP has been softened by reform (Uniform Statutory Rule Against Perpetuities)...the most common modern approach is to "wait and see" if an interest subject to RAP vests within the perpetuities period. Some states have changed the vesting period to 90 years.
Note that the bar exam still tests traditional RAP though you should be aware of the modern "wait and see" approach.
54
Cy Pres
an equitable doctrine (borrowed from the law of trusts) that allows a court to reform a transfer to avoid RAP.
55
what is a concurrent estate?
ownership or possession of real property by two or more persons simultaneously
56
do concurrent owners each have the right to use or possess the whole property? If so, can they contract out of that rule?
Yes (however, there is an exception that concurrent owners can contract out of the basic rule).
57
3 kinds of concurrent ownership/concurrent estates
1) tenancy in common
2) joint tenancy
3) tenancy by the entirety
58
what is the default concurrent interest?
tenancy in common...any conveyance to more than one person is presumed to be a tenancy in common.
59
what are the characteristics of a tenancy in common?
concurrent owners have separate but undivided interests in the property. There is no right of survivorship so each co-tenant can transfer the property freely at death as well as during life.
60
what is the defining characteristic of a joint tenancy?
right of survivorship...whereby the surviving joint tenant(s) automatically take the deceased tenant's interest.
61
how is a joint tenancy created?
1) grantor must make a clear expression of intent
2) must be survivorship language: "as joint tenants with a right of survivorship"
62
what are the 4 unities needed to create a joint tenancy?
1) possession: every joint tenant has an equal right to possess the whole of the property
2) interest: joint tenants must have an equal share of the same type of interest
3) time: joint tenants must receive their interests at the same time
4) title: joint tenants must receive their interests in the same instrument of title.
63
consequences of severance of a joint tenancy
if any of the unities are severed (destroyed) then the joint tenancy is terminated and turns into a tenancy in common. However, conveyance by only one of more than 2 joint tenants does not destroy the joint tenancy of the remaining joint tenants.
64
what are common situations that sever the joint tenancy?
1) inter vivos transfer: transfer during life will destroy/sever the right of survivorship and convert the estate into a tenancy in common.
2) mortgages: a joint tenant grants a mortgage interest in the joint tenancy to a creditor.
- Majority rule = lien theory...the mortgage is treated a a lien and does NOT destroy the joint tenancy
- Minority rule = title theory...the mortgage severs title and the tenancy between the joint tenants and the creditor is converted into a tenancy in common.
3) leases: a joint tenant leases her share in the property to a tenant...does the lease sever the joint tenancy? jurisdictions are split:
- some say it does sever
- some treat it as a temporary suspension of the joint tenancy.
65
what is a tenancy by the entirety?
a joint tenancy between married spouses (the fifth unity)
It has a right of survivorship.
A key difference is that tenants by the entirety cannot alienate or encumber their shares without the consent of their spouse.
Look for magic words like property conveyed "as tenants by the entirety, with a right of survivorship".
66
If the grant is ambiguous as to whether it is a tenancy by the entirety or other concurrent estate, what do courts presume?
courts presume property is held as joint tenants or as tenants in common.
67
What is ouster?
when a co-tenant in possession denies another co-tenant access to the property (ex: one tenant changes the locks, or throws out the co-tenant's stuff).
68
what are the remedies for ouster?
1) get an injunction granting access to the property; and/or
2) recover damages for the value of the use while the co-tenant was unable to access the property.
69
What happens if rent is received from a 3rd party's possession of the property in a concurrent estate?
rent received from a third party's possession of the property, minus operating expenses, are divided based on ownership interests of each co-tenant.
70
who pays operating expenses in a concurrent estate?
necessary charges, such as taxes or mortgage payments are divided based on ownership interests of each co-tenant and a co-tenant can collect contribution from the other co-tenants for payments in excess of her share of the operating expenses.
71
do co-tenants have a right to reimbursement from other co-tenants for necessary repairs?
Nope, however, the co-tenant who makes the repairs can get credit in a partition action.
72
do co-tenants have a right to reimbursement for improvements made?
No, however the co-tenant who makes the improvements can get credit in a partition action.
73
What is partition?
an equitable remedy that is available to all holders of a tenancy in common or a joint tenancy...It is a unilateral right. Tenants by the entirety do not have the unilateral right to partition.
74
what is the effect of partition?
the court will divide the property into distinct portions.
courts will have a preference for physical division. However, court will order a partition by sale if the physical partition is: (1) not practical (land has complicated terrain) or
(2) not fair to all parties.
75
what happens to the proceeds from a partition by sale action?
they are divided among the co-tenants based on their ownership interests.
76
when is an agreement among co-tenants not to partition enforceable?
when (1) the agreement is clear; and (2) the time limitation is reasonable.
77
When is a tenant's obligation to pay rent excused under the theory of constructive eviction?
when a landlord substantially interferes with the tenant's use and enjoyment of the property by breaching a duty to the tenant.
78
What is required 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.
79
Is every interference with the use and enjoyment of the premises a constructive eviction?
No, temporary or de minimus acts generally do not amount to constructive eviction.
80
common law vs modern majority of jurisdiction rule on an implied duty t repair
Under the common law, there was no implied duty on part of the landlord to repair the 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. However, 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.
81
What happens 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.
82
Does the doctrine of anticipatory breach apply to leases?
No...while the landlord may sue the tenant for rent as it becomes due, a landlord may not sue for future rent under the lease.
83
what does the Fair Housing Act (FHA) prohibit?
discrimination in the sale, rental, and financing of dwellings (homes, apartments, etc.) It also prohibits advertising that states a discriminatory preference.
84
What is covered under the FHA? What is not covered
the primary focus is on multifamily residential housing. There are also 3 exceptions that are not covered which are:
1) single-family housing that is sold or rented without a broker
2) owner-occupied buildings with four or fewer living units (Ms. Murphy's Boarding House);
3) religious organizations and private clubs.
85
What are the protected traits under the FHA?
race, color, religion, national origin, sex (refers to gender discrimination), disability, and familial status
86
Does sex include sexual orientation and gender identity under the FHA?
Yes, it now has been interpreted that way.
87
what does familial status mean under the FHA?
families that have children under 18 or someone who is pregnant (there are some special exemptions for senior living)
88
what do the disability provisions of the FHA mandate?
they mandate reasonable accommodations for persons with disabilities (ramp, elevator, etc.)
89
What actions are prohibited under the FHA?
1) refusing to rent, sell, or finance a dwelling;
2) requiring different rents;
3) falsely denying that a unit is available;
4) providing different services to facilities
(exception though for when making a reasonable accommodation for a tenant with disabilities)
5) stating a discriminatory preference in an advertisement.
90
Do the single-family without broker and Ms. Murphy exemptions apply to discriminatory advertisements? Can religious organizations and private clubs list their restrictions in advertisements?
NO, unless they are shared living areas and the restriction is sex based. However, religious organizations and private clubs can list their restrictions in their advertisements.
91
Does the FHA allow for both intent (disparate treatment) and effect (disparate impact) cases?
Yes!
92
Under the FHA, must prohibited behavior be linked to the protected basis?
Yes...there has to be evidence of causation.
93
In cases about property, the common trolling law is based upon what?
where the property is located (i.e., law of the situs)...law of the situs is the baseline choice of law rule in a property dispute that involves more than one state.
94
when is the law of the situs rule ignored?
1) if the instrument in question designates an applicable jurisdiction;
2) in cases involving marriage; specifically with respect to classifying property as marital or separate, the domicile of the party may override the law of the situs;
3) in mortgage cases, where the mortgage documents require repayment to be made in another state.
95
what is landlord-tenant law a mix of?
contract law and property law... This is because a lease creates both a K interest and a property interest.
96
what are the 4 types of estates that can govern the landlord-tenant relationship (i.e., the tenancies)?
1) tenancy for years
2) periodic tenancy
3) tenancy at will
4) tenancy at sufferance
97
tenancy for years definition
measured by a fixed and ascertainable amount of time
98
how is a tenancy for years created?
an agreement by the landlord and the tenant (purpose is to demonstrate the intent to create a leasehold).
99
How is a tenancy for years terminated?
At the end of the term, termination occurs automatically upon the expiration of the term. Notice is not required to terminate unless the lease requires it.
It also may be terminated if before the term is over the tenant surrenders the lease, or the tenant or the landlord commits a material breach of the lease (tenant fails to pay rent)
100
periodic tenancy definition
estate that is repetitive and ongoing for a set period of time (month to month or year to year). It renews automatically at the end of each period until one party gives proper notice of termination.
101
How is a periodic tenancy created
parties must intend to create a periodic tenancy...intent can be express (signed lease) or implied (payment of rent)
102
how does a periodic tenancy terminate?
It renews automatically until proper notice is given.
The old approach is (in a year to year lease) you must give at least 6 months advance notice.
New approach: shorter notice requirements; many states have lowered to a month's notice.
Proper notice means the terminating party gives notice before the start of what will be the last term.
103
Do most jurisdictions require written notice of termination for a periodic tenancy?
Yes
104
When is notice effective for termination of a periodic tenancy?
on the last day of the period.
105
tenancy at will definition
may be terminated by either landlord or tenant at any time, for any reason.
106
how are tenancies at will created?
by express agreement or by implication.
107
If an agreement gives only the landlord the right to terminate at will (under a tenancy at will), does the tenant also get the right to terminate? What is the agreement only gives the tenant the right to terminate at will?
Yes, by implication. However, if the agreement gives only the tenant the right to terminate at will, the landlord is not given the right to terminate at will.
108
If the landlord or tenant dies, does that terminate the tenancy at will?
Yes, but this is not true for the tenancy for years or the periodic tenancy.
109
tenancy at sufferance definition
created when a tenant holds over after the lease has ended. It is a temporary tenancy that exists before the landlord has either evicted the prior tenant or re-rents the property to the tenant (creates a new tenancy with the holdover tenant). A tenancy at sufferance is created by the actions of the tenant alone.
110
what does a tenant owe the landlord in a tenancy at sufferance?
reasonable value of her daily use (look to rent from prior lease), as well as reasonably foreseeable special damages.
111
what are the 3 ways a tenancy at sufferance terminates?
1) the tenant voluntarily leaves;
2) the landlord evicts the tenant;
3) the landlord re-rents to the tenant.
112
what are the two basic duties that the tenant has?
1) pay rent
2) avoid waste
113
when is a tenant's duty to pay rent suspended?
1) premises are destroyed, so long as the tenant didn't cause the damage;
2) the landlord completely or partially evicts the tenant
3) the landlord materially breaches the lease
114
complete vs partial eviction
complete = removal of tenant from the entire property
partial = removal of tenant from a portion of the property
115
implied covenant of quiet enjoyment
the tenant can withhold rent when the landlord takes actions that make the premises wholly or substantially unsuitable for their intended purposes, and the tenant is constructively evicted.
116
what are the 4 elements of constructive eviction
1) premises were unusable for their intended purposes
2) the tenant notifies the landlord of the problem
3) the landlord does not correct the problem; and
4) the tenant vacates the premises after a reasonable amount of time has passed.
117
Implied warranty of habitability
the landlord has an obligation to maintain the property such that it is suitable for RESIDENTIAL USE. We are concerned with conditions that threaten the tenant's health and safety.
118
can a tenant waive habitability protection?
Nope
119
Is a landlord's failure to comply with applicable housing codes constitute evidence of a breach of IWH?
Yes
120
IWH and rent: if the premises are not habitable, what may the tenant do?
1) refuse to pay rent;
2) remedy the defect and offset costs against the rent; or
3) defend against eviction (if landlord objects to rent abatement)
4) alternatively, the tenant may choose to treat the breach as a constructive eviction by vacating the property.
121
Under IWH, if the tenant chooses to withhold rent, the tenant must do what?
1) notify the landlord of the problem; and
2) give the landlord a reasonable opportunity to correct the problem.
122
Does IWH require the tenant to vacate the premises?
No, unlike with quiet enjoyment and constructive eviction, IWH does not require the tenant to vacate the premises unless the tenant chooses to treat the breach as a constructive eviction.
123
what is the duty to avoid waste?
the duty to avoid waste is a background rule; it does not have to be expressed in a lease in order to apply. the tenant has a duty to not commit affirmative (voluntary) waste or permissible (neglectful) waste. A tenant may make changes to the property that increases the property's value (ameliorative waste). However, landlords usually require permission before a tenant can make the change.
124
who has the duty to repair in a lease?
In a residential lease, the landlord is presumed to be responsible for repairs. The tenant must notify the landlord of any needed repairs. However, the landlord is not responsible to make repairs caused by the tenant's actions. In a commercial lease, the landlord can place the duty to repair on the tenant.
125
Duty to mitigate damages if a tenant abandons the property early or is evicted
Majority rule: the landlord must make reasonable efforts to re-rent the property. The landlord must treat the leasehold as if it was vacant stock, that is, like any other property she would try to rent. If the landlord does not make diligent efforts to mitigate, the tenant is relieved from the obligation to continue paying rent. If the landlord does seek to mitigate, the landlord is entitled to the difference between the original rent and the rent received from the replacement tenant. The landlord does not have to accept an unacceptable replacement tenant.
Minority rule: the landlord does not have to mitigate damages. The minority rule is more common in cases involving commercial leases.
126
In a holder tenant situation, can a landlord impose a higher rent than the rent under the old lease?
generally, the rent is the amount under the old lease but the landlord may impose a higher rent if the landlord had informed the tenant of the increase prior to the expiration of the old lease.
127
Landlord's duty to deliver possession (majority vs minority rule)
majority rule: the landlord must deliver actual possession of the leasehold premises. This means physical possession of the property.
minority rule: the landlord only required the deliver legal possession.
The difference between actual and legal possession is of particular importance with holdover tenant issues and the obligation to the new tenant.
128
In practice, when is quiet enjoyment violated?
when the landlord, or someone connected to the landlord, renders the premises unsuitable for the intended purpose. the landlord must control common ares such as lobby, hallway, or laundry room and nuisance like behavior of other tenants. The landlord does not have to control off-premises actions of third parties that are beyond the landlord's control.
129
if a tenant complains about conditions, can the landlord retaliate by evicting the tenant?
Nope
130
Does a tenant owe a duty of care?
Yes, this extends to invitees, licensees, and foreseeable trespassers.
131
Common law approach to a landlord's liability to invitees, licensees, and foreseeable trespassers
1) Landlord's are responsible in negligence for latent (hidden) defects about which the tenant has NOT been warned.
2) responsible for faulty repairs completed by the landlord (or landlord's agent) negligently.
3) responsible for negligence that causes injuries in common areas of the property.
132
Modern approach to a landlord's liability to invitees, licensees, and foreseeable trespassers
landlords have a general duty of reasonable care.
133
assignment v. sublease
assignment = complete transfer of the tenant's remaining term
sublease = transfer for less than the entire duration of the lease.
134
in an assignment, who can the landlord collect rent from
the tenant (because of privity of K) & the subsequent tenant (because or privity of estate)
135
In a sublease, who can the landlord collect rent from?
Just the tenant (because of privity of K and estate)...subsequent tenant only has rent obligations to the OG tenant.
136
Permission to assign or sublease
Silent lease: if the lease is silent on the issue, a tenant may assign or sublet freely
permission: if the lease requires the landlord's permission to transfer, but is silent as to the applicable standard, then:
majority rule = a landlord may deny permission to transfer only for a commercially reasonable reason.
minority rule = a landlord may deny permission at her discretion which means for any reason or no reason at all.
137
does a landlord need a tenant's permission to transfer her interest?
Nope...but the new landlord inbound by the terms of the existing lease.
138
what are the two stages of a land sale K
1) contract stage (where parties negotiate terms)
2) deed stage (where parties transfer property)
139
how is liability determined in a land sale K?
By the stage where the breach occurs...
K stage: any liability must be based on a K provision
Deed stage: any liability must be based on a deed warranty
140
doctrine of merger (land sale K)
covenants under the K are merged into the deed and any remedy will flow from the deed.
141
Land Sale K SOF 3 requirements
1) must be in writing
2) must be signed by the party to be enforced against?? (double check this)
3) must include essential terms (the parties, description of the property, price and payment info)
142
Exceptions to SOF for land sale K
1) part performance
2) detrimental reliable
143
part performance exception to SOF for land sale K
partial performance by either the seller or the buyer is treated as evidence that the K existed. Look for acts of performance such as
1) payment of all or part of the purchase price;
2) possession by the purchaser; or
3) improvements by the purchaser.
(many states require at least 2 acts of performance for the doctrine of partial performance to apply)
144
detrimental reliance exception to SOF for land sale Ks
an estoppel doctrine that applies where a party has reasonably relied on the K and would suffer hardship if the K were not enforced.
145
Marketable title
every land sale K includes an implied covenant of marketable title...marketable title is title that is free from an unreasonable risk of litigation. A defect in title must be cured or fixed before closing, at which point the K and deed merge and the deed controls.
146
what is the standard in judging whether title is unmarketable
that of a reasonable buyer
147
what is the buyer's remedy if the seller cannot deliver marketable title?
rescission of the K
148
Basic rule on delays for land sale Ks
unless the K or parties notify, time is NOT of the essence. Therefore, failure to close on the date set for close may be a breach of K, but is not grounds for rescission of the K. Specific performance is still available.
149
Implied warranty of fitness or suitability
applies to defects in new construction...
In most jurisdictions, both the initial homeowner-purchaser and subsequent purchasers may recover damages.
In a minority of jurisdictions, only the original buyer can enforce this warranty.
150
when, generally, may a suit for breach of the implied warranty of fitness or suitability be brought?
within a reasonable time after discovery of the defect (but some jurisdictions have a statutory time period)
151
Duty on the seller to disclose defects
Most jurisdictions impose a duty on the seller to disclose to the buyer all known, physical and material defects. They are concerned with latent or hidden defects. Material defect must substantially affect the value of the home, health and safety of its occupants, or the desirability of the home;
general disclaimers (as is) will not satisfy the seller's duty to disclose.
152
Seller's remedies on buyer's breach
1) damages (measure is the difference between the K price and market price)
2) rescission (seller can sell the property to someone else)
3) specific performance
153
Buyer's remedies on Seller's Breach
1) damages (measure is difference between K price and market value of date of breach)...however, if the seller breaches but acted in good faith, the buyer can only recover out-of-pocket expenses.
2) rescission (returns payments to the buyer and cancel the K)
3) specific performance
154
who bears the risk of loss if there is damage to or destruction of the property? (majority rule)
The buyer holds equitable title during the period between the execution of the K and the closing and delivery of the deed. The buyer is responsible for any damage to the property that happens during that period. As holder of legal title, the seller has the right to possess the property.
155
who bears the risk of loss if there is damage to or destruction of the property? (minority rule)
places the risk of loss on the seller until the closing and delivery of the deed.
156
Can property owned by the gov be adversely possessed?
No
157
4 elements of adverse possession
E - exclusive
C - continuous (for statutory period)
H - hostile
O - open and notorious
158
is seasonable or infrequent use sufficient to meet the continuous requirement of AP?
seasonal or infrequent use may suffice if the use is consistent with the type of property being possessed.
159
Can an adverse possessor tack on her predecessor's time to satisfy the continuity/SOL requirement of AP?
Yes, & to tack on the time of adverse possession of a prior adverse possessor, the current adverse possessor must be in privity with the prior adverse possessor. Privity is an exchange of some sort between the adverse possessors.
160
Will the SOL run against a true owner who has a disability?
No, if the disability is present at the time the AP begins (infancy, insanity, or imprisonment)...the disability must exist when the trespasser enters the property
161
can a true owner interrupt the AP period?
yes by ejecting the AP
162
What use constitutes open and notorious for AP?
use must be such that it would put a reasonable true owner on notice of the adverse use. the use cannot be hidden; the trespasser must use the property as if she was the true owner.
163
What does the hostile element of AP require
Possession must be adverse to the owner's interest. It is a claim of competing title.
Majority rule: ignores the AP's state of mind
Minority rule: inquires into the AP's state of mind
- Good faith rule: AP's claim is hostile if she thinks the land is unowned or that she is the rightful owner. This adverse possession is based on a mistake.
Bad faith rule: the adverse possessor knows that land is not hers and she tries to acquire title to the property by AP (aggressive trespass)
164
Exclusive element of AP
an adverse possessor cannot share possession with the true owner...if two people possess the property together, they can both acquire title by AP as tenants in common.
165
Scope of possession in AP
AP generally traces the legal boundaries of the property. There is an exception for constructive adverse possession though. This is where the AP enters under color of title from an invalid deed instrument and occupies a portion of the property described in the instrument. In that case, the AP is in possession of the occupied land and constructive possession of the remaining land described in the deed.
scope of possession in AP also includes subsurface rights (unless those rights already belong to a third party) and easements can also be acquired by AP (or prescription.
166
Does one joint tenant's execution of a lease sever the joint tenancy?
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 resumed upon expiration of the lease.
167
If one joint tenant leases the property and then dies and the property is fully transferred to the other surviving joint tenant, does the lease remain in tact?
No, the lease would terminate as the property would pass automatically to the surviving joint tenant.
168
What is a deed & what is needed for a deed to be valid?
a legal instrument that transfers ownership of real property. For a deed to be valid, it must be delivered and accepted. (the delivery requirement houses the issue of intent)
169
What is the controlling question for delivery of a deed? Is physical transfer of a deed required?
whether the grantor had the present intent to transfer the property. Physical transfer of a deed is not required.
170
Is proper delivery of a deed made when the grantor delivers the deed to an agent to deliver it to the grantee?
Yes
171
Is acceptance of a deed generally presumed?
Yes
172
When can brokers be involved in a land sale contract?
So long as they do not practice law...
173
what to look for in deciding whether a broker/agent's actions are permissible/impermissible?
whether they are exercising legal discretion and whether the broker or non-lawyer is giving legal advice.
174
what are the contents of a valid deed?
1) must identify the parties (grantor and grantee)
2) must be signed by the grantor (per SOF)
3) must include words of transfer (a granting clause can include any words that evidence a present intent to transfer)
4) must include a sufficient description of the property.
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Does a description of the property need to be a legal description? can it be based on monuments or physical attributes of the property? Can extrinsic evidence be admitted to clarify an ambiguous description?
1) No
2) Yes
3) yes
176
Does a deed need to be witnessed or notarized?
Nope
177
What happens if the grantor's signature is forged on a deed?
the deed is void even if the purchaser is a BFP.
178
Can a principal appoint an agent to execute a deed? What is the equal dignities rule?
A principal can appoint an agent to execute a deed.
However, under the equal dignities rule, if the agent is required to sign (such as to execute the deed), then the agency relationship must be created in writing.
179
What does it mean to record and what is the purpose of recording?
Record = publicly register your deed.
Purpose = notice...tell the world you own the property.
180
Does recording affect the validity of a deed?
No, a deed is valid at delivery. Recording statutes are concerned about subsequent purchasers.
181
What rule do recording statutes modify?
The first in time, first in right rule that states the the first grantee to receive a deed wins. However, in the absence of a recording statute, the common-law rule controls.
182
What types of interests are covered by recording acts?
1) deeds
2) mortgages
3) leases
4) options
5) judgments affecting title
6) other instruments creating an interest in land, such as easements or covenants.
183
Is title by adverse possession covered by recording statutes?
Nope.
184
Who is covered by recording acts/who is protected
subsequent purchasers (purchaser = someone who has acquired an interest in land)
185
who is not protected by recording acts?
Grantees who acquire title by gift, intestacy, or devise are not protected by recording acts. The policy behind recording acts is that we want to protect those who make economic investments by acquiring property.
186
What are the 3 kinds of notice
1) actual = when the subsequent grantee has real, personal knowledge of a prior interest
2) constructive (record notice) = when a prior interest is recorded
3) inquiry = when a reasonable investigation would have disclosed the existence of prior claims.
187
What are two common situations where a subsequent grantee will be put on inquiry notice?
1) dude on the land: when there is someone else living on or using the land; had the subsequent grantee investigated the land, he would have discovered the person in possession.
2) mentioned interest: when there is an interest mentioned in the deed to some other transaction; had the subsequent grantee inquired, he would have discovered the interest.
188
Race statutes
Rule: first to record wins, even if the subsequent purchaser had notice of a prior, unrecorded conveyance.
Key language: "first recorded" or "first to record"
189
Notice statutes
Rule: a subsequent purchaser wins if she acquires without notice of a prior, unrecorded conveyance.
Key language: "In good faith" or "without notice."
190
Race-notice statutes
Rule: a subsequent purchaser wins if two requirements are met:
(1) acquired without notice of a prior unrecorded conveyance; and
(2) records first
Key language: "In good faith" or "without notice" plus "first duly recorded" or "first recorded."
191
What kind of statute is this?: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be first recorded according to law"
race-notice
192
What kind of statute is this: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value unless the same be first recorded according to law"
Race
193
What kind of statute is this?: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law"
notice
194
Shelter Rule
a person who takes from a bona fide purchaser protected by the recording act has the same rights as her grantor.
195
Estoppel by Deed
arises when a grantor conveys land the grantor does not own... If a grantor subsequently acquires title to the land, the grantor is estopped from trying to repossess on grounds that he didn't have title when he made the original conveyance.
196
What is the Deed merger doctrine?
after closing, the land sale K is merged into the deed. Any liability must arise out of the deed, not the K.
197
What are the 3 kinds of deeds?
1) general warranty
2) special warranty
3) quitclaim deed
198
General warranty deed
provides the greatest amount of title protection; the grantor warrants title against ALL defects, even if the grantor did not cause the defects.
199
What are the 6 implied covenants in the general warranty deed? (3 present & 3 future)
3 present:
1) covenant of seisin
2) covenant of the right to convey
3) covenant against encumbrances
3 future:
1) covenant of quiet enjoyment
2) covenant of warrant
3) covenant of future assurances.
200
covenant of seisin
a present covenant that warrants that the deed describes the land in question
201
covenant of right to convey
present covenant that warrants that the grantor (seller) has the right to convey the property.
202
covenant against encumbrances
present covenant that warrants that there are no undisclosed encumbrances on the property that could limit its value.
203
covenant of quiet enjoyment
future covenant where the grantor promises that the grantee's possession will not be disturbed by a third-party claim.
204
covenant of warranty
future covenant where grantor promises to defend against future claims of title by a 3rd party.
205
covenant of future assurances
future covenant where grantor promises to fix future title problems.
206
what is a special warranty deed?
where the grantor warrants against defects only caused by the grantor. This type of deed provides a lesser amount of title protection than a general warranty deed. It includes the same 6 covenants as a general warranty deed but only applies to acts (or omissions) of the grantor.
207
When does breach of a present covenant occur?
at conveyance
208
Quitclaim Deed
Where the grantor makes no warranties as to the health of the title. This type of deed provides the lease amount of title protection. Often used in tax sales and intra-family disputes (divorces)
209
when does breach of a future covenant occur?
after the conveyance, once there is interference with possession.
210
Who is an Heir?
People who take a decedent's intestate estate. In order to be an heir you have to survive the dead person who dies without a will.
211
Who is a devisee?
a person who takes a devise by will
212
Escheat
if a decedent dies without a will and without heirs, the decedent's property goes to the state.
213
What is ademption (basic rule and satisfaction)
a devise of property that fails (or deems) because it is not in the testator's estate at death.
Basic rule: the gift fails and the intended recipient gets nothing...
Satisfaction: if the testator gives the intended beneficiary the promised gift during life, then the beneficiary keeps the gift.
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Lapse
the intended beneficiary predeceases the testator...traditionally, the gift fails (lapses) and would fall to the residuary gift.
215
Antilapse
every state has an anti lapse statute to prevent a gift from failing because an intended recipient predeceases the testator.
In most states, to qualify, the predeceasing beneficiary must be a relative of the testator who dies leaving issue. the statute replaces the intended beneficiary with a family member (the children of the B) who stands in the shoes of their parent and takes the gift on their behalf.
216
What is a Trust?
a devise for managing property with bifurcated ownership. one person (the trustee) owns the legal title for the benefit of another person (the beneficiary) who holds equitable title.
217
charitable trust
a trust designed to benefit the public at large and is charitable in nature.
218
Private trust
trust designed to satisfy some legal purpose by giving property to a person or group for the benefit of another person or group.
219
What is a restraint on alienation? What are examples?
a restriction on transferring property.
1) inter vivos grant of an estate smaller than fee simple
2) Devise of an estate smaller than fee simple
3) co-tenant agreement
4) covenants that run with the land
5) easements
220
What are rules regarding restraints on alienation?
1) an absolute restraint on alienation is void
2) a partial restraint is valid if it is for a limited time and a reasonable purpose
3) a restriction on the use of property is generally permissible (covenants)
221
what if a restraint on alienation is valid?
any attempt to alienate the property will be null and void.
222
What is a mortgage? What are the two component parts?
a security device used to secure payment of a debt.
two component parts:
(1) the note = the borrower's promise to repay the loan/debt
(2) the mortgage = the instrument that provides security for the note.
223
What happens if a borrower defaults on a loan when there is a mortgage?
the lender can force a foreclosure sale to satisfy the outstanding debt.
224
Mortgagor v Mortgagee
Mortgagor = the borrower
Mortgagee = the lender
225
What is a purchase money mortgage
when a person takes out a loan for the purpose of purchasing property
226
What is a future advance mortgage?
a line of credit used for home equity, construction, business, and commercial loans (often referred to as a "second mortgage")
227
Lien states v. Title states
Majority (lien state) = treat a mortgage as a lien that does not sever a joint tenancy.
Minority (title state) = mortgage does sever a joint tenancy and converts into a TIC.
228
Deed of trust
operates like a mortgage but uses a trustee to hold title for the benefit of the lender (the beneficiary of the trust receiving the payments).
229
Installment land K (traditional v modern approaches)
Where the seller finances the purchase...the seller retains title until the buyer makes the final payment on an installment plan.
Traditional rule = if the buyer breaches (misses a payment), the seller keeps the installment payments made and the property.
Modern approaches = states trying to assist defaulting buyers.
- some treat installment Ks as a montage, requiring the seller to foreclose
- some give the buyer equitable right of redemption to stop a foreclosure sale.
- some allow the seller to retain ownership, but require restitution for what's been paid.
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Absolute Deed
The mortgagor (borrower) transfers the deed to the property instead of conveying a security interest in exchange for the loan.
If this is a mortgage disguised as a sale, the borrower must prove a mortgage-like agreement by clear and convincing evidence (that there was an obligation created prior to or contemporaneously with the transfer);
Parol evidence is admissible to make this showing.
SOF does not bar oral evidence about the agreement.
231
What is a conditional sale and repurchase?
Where the owner sells property to the lender who leases the property back to the owner in exchange for a loan. The lender gives the owner the option to repurchase after the loan is paid off.
232
May a mortgagor transfer the property by deed, by will, or by intestate succession? How does transfer affect the mortgagor's liability?
Yes, they may transfer...
Mortgagor remains personally liable after the transfer unless:
- lender/mortgagee releases the mortgagor; or
- lender modifies the transferee's (buyer/new owner) obligation
233
What is a due-on-sale clause?
When this is present, the lender has the option to demand immediate full payment upon transfer. Think of this an an acceleration clause that allows the lender to speed up the payment when the property is transferred.
234
What is a due-on-encumbrance clause?
an acceleration clause when the mortgagor obtains a second mortgage or otherwise encumbers the property.
235
When a mortgagor transfer the property, what is the liability of the subsequent transferee?
1) If the buyer/transferee assumes the mortgage, upon default the transferee is personally liable for the mortgage. Note that BOTH the original mortgagor and the transferee are liable upon default in this case. In most jurisdictions, the assumption agreement does NOT need to be in writing.
2) if the buyer/transferee takes subject to the mortgage, the transferee is NOT personally liable upon default. If the deed is silent or ambiguous as to liability, the transferee/buyer is considered to have taken title subject to the mortgage.
236
When can a mortgagee/lender take possession? (lien vs title theory vs intermediate title theory)
Under the lien theory, the mortgagee/lender cannot take possession prior to foreclosure because the lender has a lien until foreclosure is complete. The mortgagor is the owner up until foreclosure.
Under the title theory, the lender typically has the right, as the holder of title, to possess the property at any time.
There are also a minority of jurisdictions that are intermediate title theory states where the mortgagor retains title until default, at which point the lender can take possession.
237
Can a homeowner commit waste that will impair the lender's security interest?
Nope
238
What is equity of redemption?
A common law right held by the mortgagor to reclaim title and prevent foreclosure upon the full payment of the debt. The mortgage must exercise this right BEFORE the foreclosure sale.
239
What is a deed in lieu of foreclosure
Rather than face foreclosure, the mortgagor can convey property to the lender in exchange for releasing her from any outstanding debt.
240
What does it mean to "clog" the equity of redemption
to create terms that make it harder for a borrower to exercise her equity of redemption. Courts will intervene to prevent clogging.
241
What is a foreclosure?
A forced sale of an asset to pay off a debt. The mortgagee must give notice before foreclosing. The proceeds of the sale are used to pay off the debt and excess proceeds will be used to satisfy other creditors.
242
Judicial Sale v Power of Sale
Judicial sale = sale under the supervision of a court
Power of sale (private sale) = sale by the mortgagee/lender
243
Is the mortgagor responsible if the foreclosure sale produces less than the mortgagor owes?
Yes, the court can issue a deficiency judgment for the remaining balance.
244
Priority of whose interests get satisfied first?
Generally, surviving interests are satisfied chronologically (first in time rule)...
Senior interests = interests acquired before the interest that is being foreclosed. They survive the foreclosure.
Junior interests = interests acquired after the interest that is being foreclosed. They are extinguished by the foreclosure.
(there are exceptions though)
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Purchase-money mortgage exception
A purchase-money mortgage is a mortgage given to a lender in exchange for a loan to buy real property. The purchase money mortgage has priority over mortgages and liens created by or against the purchaser/mortgagor prior to the purchaser/mortgagor's acquisition of the property.
246
Recording Act exemption to mortgage priority rule
A senior mortgage may sometimes not get recorded. A junior mortgage that satisfies the requirements of the state recording act may take priority over the unrecorded senior mortgage.
247
What is a subordination agreement between mortgages?
A senior mortgagee can agree to subordinate its interest to a junior interest.
248
What is the effect of mortgage modifications on their priority?
A senior mortgage who enters into an agreement with the mortgagor/landowner to modify the mortgage by making it more burdensome subordinate its interest, but only as to the modification. The original mortgage will otherwise remain superior.
Likewise, if a senior mortgagee releases a mortgage and, at the same time, replaces it with a new mortgage, the new mortgage retains the same priority as the former mortgage, except to the extent a change is materially prejudicial to a junior mortgage holder.
249
May a mortgagor/borrower grant a mortgagee/lender rights to property that the mortgagor/borrower acquires in the future?
Yes, however, the mortgage must clearly state that is applies to after-acquired property. Additionally, upon foreclosure, an interest in an after-acquired property is junior to the purchase-money mortgage.
250
What is the effect of foreclosure?
Foreclosure eliminates the mortgagor's interest in the property. Absent statutory redemption, the purchaser of property at foreclosure sale takes the property free and clear of any junior mortgage and subject to any senior mortgage.
251
What is statutory redemption?
Some states allow the mortgagor to redeem the property even AFTER the foreclosure sale. A statute enables the homeowner to nullify the foreclosure and it ends with the purchaser's title and restores title to the homeowner.
252
What happens to junior interests after a foreclosure sale?
The rights of junior interests are generally destroyed.
253
are rights of senior interests generally affected by the foreclosure sale?
No
254
254
What is an easement?
An easement is a right held by one person to make use of another person's land.
255
Servient v Dominant estate
servient = land burdened by the easement
dominant = land benefited by the easement
256
affirmative easement
where the holder has the right to do something on someone else's property (ex: Eddie has an easement to cross Sue's land to reach the highway)
257
negative easement
the holder has the right to prevent someone from doing something on her land. (ex: Eddie has an easement that entitled him to prevent Sue from growing her bamboo to a height that blocks Eddie's view of the mountains.
258
What is an easement appurtenant?
The easement is tied to the use of the land. An easement appurtenant is fully transferable, it goes with the land.
259
What is an easement in gross?
the easement benefits the holder personally (ex: an easement for a particular person to be able to use another person's pool and it doesn't matter where the particular person lives). With easement in gross there is no dominant estate, only a servient estate. Traditionally, easements in gross were not transferable, but now courts allow the easement to be traceried if there is intent for it to be transferable.
260
What are the two methods of creating an easement?
Express & implied
261
Express easements...are they subject to SOF? How are they created? Are they subject to recording states?
Yes...therefore it must be in writing. It can be created by a grant or by reservation. An easement by reservation is created when a grantor conveys land but reserves an easement right in the land for the grantor's use and benefit. & yes they are subject to recording statutes.
262
Can a negative easement be implied?
No, they must be express...implied easements arise out of circumstances and a negative right will rarely be created by circumstances.
263
Are implied easements transferable?
Yes
264
What are the 4 kinds of implied easements?
1) easement by necessity
2) easement by implication (easement by prior use)
3) easement by prescription
4) easement by estoppel
265
When is an easement by necessity created and what are the requirements?
An easement by necessity is created only when property is virtually useless (e.g., when the property is landlocked; there is no road or access without crossing another's land).
Condition that must be met:
1) common ownership: dominant and servient estates were owned in common by one person; and
2) necessity at severance: when the estates were severed into two separate estates (severance), one of the properties became virtually useless without an easement.
The necessity requirement is strictly construed.
Easement by necessity ends when it is no longer necessary.
266
What is an easement by implication? What are the conditions that must be met?
An easement by implication is created by an existing use on the property.
Conditions that must be met:
1) common ownership: a large estate owned by one owner.
2) before severance: the owner of a large tract uses the land as if there's an easement on it. We call this a quasi-easement. It's "quasi" because an owner can't have an easement over her own land.
3) after severance: use must be continuous and apparent at the time of severance.
4) necessity: use must be reasonably necessary to the dominant estate's use and enjoyment (lesser standard than "strictly" necessary).
267
What is an implied easement by prescription?
It is like acquiring an easement by adverse possession... the elements are the same except for exclusivity. (continuous, hostile, & open & notorious)
268
Implied easement by estoppel...how is it created
1) permission: starts with a permissive use (license)
2) reliance: continues when the second neighbor relies on the first neighbor's promise. (reliance must be reasonable and in good faith)
3) permission withdraw: first neighbor withdraws permission.
4) if reliance was detrimental to the second neighbor, the first neighbor is estoppel from withdrawing permission, in effect creating an easement.
269
What is the scope of the different easements?
Express easement = scope determined by the terms of the easement when it was created...if ambiguous, the court considers the intent of the original parties as to the purpose of the easement.
Implied easement = determined by the nature of the prior use or necessity.
270
How are changes in use of an easement tested?
Under a reasonableness standard. Presume the parties contemplated both its current use and its future use, which means the future use of an easement must be reasonably foreseeable.
271
What happens if the use of an easement exceeds the scope?
the dominant tenant is trespassing on the servient estate.
272
who has the duty to maintain the property subject to an easement?
the owner of the easement. However, parties can otherwise contract.
273
How are easements terminated?
1) release: the holder of the easement expressly releases it. The release must be in writing.
2) merger: an easement is terminated if the owner of the easement acquires fee title to the underlying estate. The easement merges into the title.
3) abandonment: the owner acts in an affirmative way that shows a clear intent to relinquish the right. This requires more than non-use or statements. Usually need non-use plus an act demonstrating intent to abandon.
4) prescription: the holder fails to protect against the servient estate owner's interference for the statutory period.
5) sale tot a purchaser
6) estoppel: the servient owner changes position to his detriment in reliance on statements or conduct of the easement holder the the easement is abandoned.
7) end of necessity: an easement by necessity lasts as long as the easement is needed. If it is no longer necessary, the easement ends.
274
What is a profit?
A right to enter another's land and remove a specific natural resource (oil, gas, timber)... operates similarly to an easement but profits cannot be created by necessity.
275
What is a license
A revokable permission to use another's land... a license only binds the licensor rather than successors.
276
What is a real covenant? What is the benefit v burden
A promise concerning the use of the land that runs to successors to the promise. The benefit of the covenant is the ability to enforce the covenant. The burden of the covenant is being subject to it.
277
What are the requirements for a covenant to run?
1) writing
2) intent
3) touch & concern
4) notice
5) privity
278
Are real covenants subject to SOF? Subject to recording acts?
Yes (must be in writing) & yes.
279
What is the intent requirement for real covenants
the original parties must intend for the covenant to run its the land.
280
touch & concern element of real covenants...negative covenant v affirmative covenant
The benefit or burden must affect both parties as owners of the land.
Negative covenant: a restriction on use will usually touch and concern because they restrict what you can do with your land.
Affirmative covenant: a covenant to pay money (HOA fees). Traditionally, such fees did not touch and concern, but the modern trend is to say that these fees do touch and concern.
281
Do discriminatory covenants touch and concern?
No...these are unenforceable
282
What kind of notice is required to run a real covenant?
Actual or constructive...inquiry notice may also suffice for an equitable servitude.
283
Is horizontal privity required to run the burden to a successor?
To run the burden to a successor, the original parties to the promise must have been in horizontal privity. Horizontal privity refers to privity of estate, where the estate and the covenant are contained in the same instrument (the deed).
284
What is vertical privity?
the relationship between the original party to the agreement and his/her successor to the property.
285
What vertical privity is required to run the burden of the covenant to a successor?
strict vertical privity: successor must take the original party's entire interest.
286
What vertical privity is required to run the benefit of the covenant to a successor?
relaxed vertical privity: the successor need only take an interest that is carved out (like fee simple determinable) of the original party's estate. You also don't need horizontal privity to run the benefit.
287
What is the remedy for breach of a real covenant?
Damages
288
What are the two ways to bind a successor to an original party's promise?
1) real covenant
2) equitable servitude (has an easier standard to meet and the remedy differs)
289
To bind a successor under an equitable servitude, what is required? What is the remedy?
1) it must be in writing
2) must have been intended to run with the land
3) must touch and concern the land
4) successor must have notice (actual, record, or inquiry)
NO PRIVITY REQUIREMENT
Remedy is injunctive relief.
290
What is an implied reciprocal servitude? How are they created?
A kind of equitable servitude that is implied and need NOT be in writing. Usually comes up in planned communities.
This is how they are created:
1) developer must intend to create a covenant on all plots in the subdivision
2) promises must be reciprocal (benefits and burdens each and every parcel equally)
3) must be negative rather than positive (must be a restriction on the owner's use)
4) A successor must be on notice of the restriction (at least inquiry notice)
5) must be a common plan or scheme (look for a recorded map of the community showing the common scheme, marketing or ads of the community; or oral or written mention that the lots are burdened by common restriction).
291
how do equitable servitudes terminate?
Same ways as an easement (merger, release, etc.)
292
Changed circumstance doctrine to equitable servitudes
Applies in situations where the restriction no longer makes sense due to drastic changes in the surrounding area since the restriction was put in place.
the critical question is whether the property subject to the restriction still retains some benefit from the restriction? Change outside the community is not sufficient to terminate. Look for changed circumstances inside the community.
293
What are equitable defenses to equitable servitudes?
unclean hands (plaintiff not acting in good faith) and laches (unreasonable delay)
294
3 types of common interest communities
1) owners association: where property owners belong and pay dues to an association or board.
2) condominiums: where individual units are owned outright, but common areas are owned collectively as tenants in common
3) cooperatives: property is owned by a corporation (made up of residents/shareholders) that leases individual units to shareholders (residents)
295
What is the test for determining whether a new rule created by an association or board of a CIC is valid?
A new rule must be reasonably related to further a legitimate purpose of the association (like rational basis).
296
Does business judgment rule protect the board of an association for a CIC?
Yes, the board is shielded from honest but mistaken business decisions.
297
What is a fixture?
Tangible personal property that is attached to real property in a manner that is treated as part of the real property (wall or a bridge or the materials used to make a wall or bridge)
298
Can a buyer of real property keep the fixture?
They are generally entitled to the chattel, unless the seller reserves in the K the right to keep it.
299
Can life tenants and tenants remove fixtures?
Presumption is that they can unless doing so would permanently damage the property.
300
Can trespassers remove fixtures or improvements they installed? (old rule v new rule)
old rule: could never remove any fixtures or improvements that they installed.
new rule: trespassers can remove an improvement, or at least recover the value added to the property, so long as they acted in good faith.
301
What are zoning laws enacted for?
For the protection and safety of the community. States have authority to zone through police powers. Local governments get power to zone through specific enabling acts.
302
Cumulative zoning v mutually exclusive zoning
cumulative: the traditional approach in which residential use is permitted everywhere, commercial use is restricted to some areas, and industrial use is allowed in the fewest areas.
mutually exclusive: some jurisdictions have developed an approach where only one type of use is permitted by zone.
303
What is a nonconforming use?
When zoning is changed and a structure does not satisfy the zone's requirements, it is called a "nonconforming use." The goal of the property owner is to get the nonconforming use "grandfathered in."
304
What is the vested rights doctrine?
If the project is in process when the change happens, the developer must have the proper building permits by the time the ordinance takes effect. The developer must also demonstrate the project was in good faith.
305
Can an owner expand the nonconforming use? Can the nonconforming owner switch to another nonconforming use? Can the nonconforming owner transfer the property to a new owner?
1) Generally not allowed
2) not allowed
3) yes
306
What is a variance?
Essentially permission to violate the zoning rules.
Use variance = obtain the right to use property in a manner not permitted by zoning.
Area variance = focuses on restrictions concerning property development.
The person applying for a variance must show ALL of the following:
1) compliance would create unnecessary hardship;
2) the hardship arises from circumstances unique to the property
3) the owner did not create the hardship
4) the variance is in keeping with the overall purpose of the ordinance; and
5) the variance will not cause substantial harm to the general welfare.
307
What is a private nuisance?
a substantial and unreasonable interference with another individual's use or enjoyment of his property.
substantial = one that would be offensive, inconvenient, or annoying to an average person in the community.
unreasonable = the injury outweighs the usefulness of the defendant's actions.
308
What is a public nuisance?
unreasonable interference with the health, safety, or property rights of the community.
For a private party to bring a public nuisance claim, they must show that they suffered a different kind of harm than the rest of the community.
309
What is the usually remedy for nuisance?
Damages...however, if money damages are inadequate or unavailable, the court can impose injunctive relief.
310
What are the two basic approaches to water rights?
1) riparian rights: landowners who border a waterway own the rights to the waterway. The right depends upon whether the landowner is located near the water. Riparians share the right to reasonable use of the water, such that one riparian is liable to another for interference with the other's use.
2) Prior appropriation: first in time, first in right: the first person to use the water, regardless of where their land is located, has the rights to the water. Beneficial use: in a prior appropriation jurisdiction, the user must put the water to a beneficial use. Any productive use satisfies this standard.
311
What are lateral support rights
A neighboring landowner cannot excavate so as to cause a cave in (subsidence) on an adjacent owner's land.
Applicable standards:
1) if the neighbor's buildings (structures) contributed to the cave in, then the standard to apply to the one excavating is NEGLIGENCE.
2) if the neighbor's buildings did not contribute to the cave in, the standard is STRICT LIABILITY.
312
What is subjacent support?
(ex: mineral rights)
The surface landowners have the right not to have their land subside from the activities of the owners of underground rights.
313
How must a common interest community board act in exercising its discretionary powers?
reasonably
314
When is a right of first refusal subject to RAP vs when is it not subject to RAP.
A right of first refusal is subject to RAP unless the right is granted in a lease to a current leasehold tenant.
315
Does modification of a senior mortgage forfeit that mortgage's priority over a junior mortgage? What if the modification materially prejudices the junior mortgage?
Modification of a senior mortgage generally does not forfeit that mortgage's priority over a junior mortgage. But if the modification materially prejudices the junior mortgage, then the senior mortgage subordinates its interest as to the modification, but the original mortgage remains superior.
