Real Property Flashcards
(125 cards)
1
Q
Fee Simple Absolute
A
absolute ownership
(“in fee simple”)
2
Q
Fee Simple Determinable
A
Ownership automatically terminates upon a condition and passes back to the grantor as a “possibility of reverter”.
(“as long as”, “until”)
3
Q
Fee Simple Subject to Condition Subsequent
A
When the condition occurs, the grantor can excercise a “right of re-entry”.
(“but if . . .”)
4
Q
Life Estate
A
Ownership terminates upon the end of the measuring life, grantor retains a reversion.
Grantor takes in fee simple absolute at end of measuring death.
5
Q
Restraint on Alientation
Unreasonable vs. Reasonable
A
A provision that restricts the transferability of real property.
Direct (or absolute) restrains on alienation are unreasonable and void. Public policy encourages the free transfer of property interests
Partial restriant is generally **valid **- one that is for a (1) **limited time and (2) resonable purpose**.
6
Q
Right of Refusal
A
A right of refusal is a partial, promissory restraint on alienation that gives its holder a preemptive right to acquire property prior to its transfer to another party.
This right is generally reasonable if the holder of the right can purchase the property under the same terms offered to another.
If so, this caluse is valid and enforceable by an injunction.
7
Q
Tenants in Common
A
- Each tenant owns an undivided interest in the entire property
- No right of survivorship
- In most states, there is a presumption that a conveyance to two or more people is this
8
Q
Joint Tenancy with Right of Survivorship
A
Requires express language and the four unities:
(1) Possession – tenants share an equal right to possess or use the property
(2) Interest – tenants have an **equal interest **in the property
(3) Time – property interests **simultaneously vest **in all tenants
(4) Title – property interests received in the same instrument of conveyance
w/ Right of survivorship
9
Q
Joint Tenant - Death
A
Under a joint tenancy, a deceased tenant’s property interest is absorbed by the surviving tenant. As a result, judgment lien on the deceased tenant’s interest also disappears.
10
Q
Severance
A
If one joint tenant conveys his interest, it severs the joint tenancy and creates a tenancy in common.
(Must convey interests while alive, not via will)
11
Q
Partition
A
A court must grant a co-owner’s request for partition (even if another co-owner objects to it).
Partition can be voluntary (by the tenants’ agreement) or involuntary (when one tenant brings a legal action). There are two types of partition:
- In kind – physical division of the property into distinct lots that are proportionate to each cotenant’s ownership interest.
- By sale – forced sale of the property where the proceeds are divided in accordance with each cotenant’s ownership interest.
Courts prefer to make a partition in kind. But when physical division of the land is impossible, impracticable, or inequitable, a court will grant a partition by sale.
12
Q
Mortgage as severance & theories
A
A joint tenancy may grant a mortgage on his interest in the property
* Majority (lien theory) - a mortgage is simply a lien and does not sever the joint tenancy
* Minority (title theory) - a mortgage is a transfer of title and severs the joint tenancy
13
Q
Abandoned Property
A
Regardless of theory, the mortgagee can take possession of the mortgaged property if the mortgagor abandons it. The mortgagee incurs liability as if he/she were the owner.
14
Q
Execution of Lease & Severance of Joint Tenancy
A
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.
Whereas other jurisdictions believe that the lease merely temporarily suspends the joint tenancy, which resumes upon expiration of the lease.
15
Q
Wild Crops
A
Wild, uncultivated crops are considered part of the real property on which they grow, and they pass automatically with the land.
The prior owner has no right to reenter the land to remove the crops.
16
Q
Co-Tenant Fiduciary Duty
A
A fiduciary duty may be imposed on cotenants who:
* jointly purchase property in reliance on each other or
* acquire their interests at the same time from a common source (e.g., by gift, will, or inheritance).
This duty primarily arises when the co-owned property is sold at a foreclosure sale and purchased by a cotenant. The other cotenants then have the right to reacquire their original interests by paying their share of the cost paid to acquire the property within a reasonable time.
17
Q
Possession
A
Each co-tenant has right to possess the entire property
18
Q
Ouster and Adverse Possession
A
A cotenant who is being **denied access **can bring a court action to regain access to property.
If one cotenant ousted the other, he could make a claim for adverse possession.
19
Q
Rent
A
A cotenant does not owe rent for his use of the property.
A cotenant must share rents recieved from a third party, proportionally to share.
20
Q
Operating Expenses
A
A cotenant can generally collect expenses if he paid more than his share.
21
Q
Repair and Improvements
A
A cotenant does not have right to be reimbused by other co-tenants even if repairs are necesary.
A cotenant may only seek contribution for necessary repairs, prior to the repair.
22
Q
Types of Leasing
A
- Tenancy For Years
- Periodic Tenancy
- Tenancy at Will
- Tenancy at Sufferance
23
Q
Tenancy for Years
A
Created by express agreement for fixed period of time.
Termination notice not required.
24
Q
Periodic Tenancy
A
Repetitive, on going lease measured by** set periods** that automatically renew.
Termination notice is typically one-month prior.
(if term notice is mid-month, then term is end of next month)
25
Tenancy At Will
Parties must **expressly** agree, no fixed period of time.
If only one party is expressly given the right to terminate the leasehold, the lease may be deemed **unconscionable** and both parties will have the ability to terminate it.
26
Tenancy At Sufferance
A tenant wrongfully holds over **past the expiration** of the lease, lasts until (1) eviction OR (2) converts to periodic tenancy.
A landlord is **not required to give notice** to vacate the premises before taking steps to recover possession of property.
27
Tenant's Duties
1. Pay Rent
2. Avoid Waste
3. Make reasonable repairs
28
Life Estate Tenant's Duties
1. Pay current charges - up to **financial benefit** recieved from property
2. Prevent waste
3. Make reasonable repairs
29
Life Estate Financial Benefit
The financial benefit is determined differently depending on whether the life tenant:
* Occupies the property - financial benefit is measured by the **fair market rental value **of the property
* Does not occupy the property - financial benefit is measused by the** income derived** from the land
30
Covenant of Quiet Enjoyment
Applies to BOTH residential and commercial leases.
The landlord cannot disrupt the tenant’s possession or enjoyment of the property.
If landlord** substantially** interferes with the tenant’s use and enjoyment of the land:
FIRST tenant must give **notice **of the problem and **reasonable time** for the landlord to repair.
THEN if the landlord does not repair - tenant may **vacate** the premises in a **reasonable **amount of time (constructive eviction)
| (do not prematurley vacate)
(Temporary or de minimis acts generally do n
31
Implied Warranty of Habitability
Only applies to residential leases. Landlord must maintain the property such that it is reasonably suited for residence.
FIRST, tenant must give notice to the landlord and reasonable opportunity to repair.
THEN If the landlord fails to make repairs, the tenant may:
(1) Stay in the property and **deduct rent** until the repair occurs;
(2) Stay in the property, **pay for repairs**, and deduct the cost from rent; or
(3)** Terminate** the lease and move out
| (does not require tenant to vacate premises)
32
Tenant and Waste
Tenant cannot damage the property and must repair damages he causes
33
Failure to Pay Rent
If fails to pay rent, landlord can sue for damages and eviction
34
Surrender
If tenant transfers lease back, and landlord accepts, tenant can no longer be obligated to pay rent.
35
Abandonment
If tenant abandons property, landlord can accept as an offer to surrender
36
Termination
Occurs automatically at the end of the lease OR if surrender occurs
37
Landlord Duty to Mitigate
In most jurisdictions, landlord has a duty to mitigate to make **reasonable efforts **to re-rent the property, even if the tenant breached.
However, if a tenant moves out early and the landlord has multiple vacant apartment, the landlord is not obligated to prioritize the tenant's vacant apartment.
38
Landlord Damage Entitlement
While the landlord may sue the tenant for rent as it becomes due, a landlord may not sue for future rent under the lease.
39
Duty to Repair
Landlord must repair damages under residential leases, **unless** the tenant caused the damages
40
Assignment
A transfer of the tenant's** entire remaining lease** to a new party.
* Original tenant remains liable under **privity of contract**
* Assignee is liable under **privity of estate**
41
Sublease
A transfer of a portion of tenant's lease (less than the remainder of the leader)
Original tenant is liable. Subtenant is not liable becase not in privity of contract or estate.
42
Tenant Fixture vs. Chattel
Typically, a tenant can remove personal property attached to the leased property if
1. The attachment was not intended to be permanent or
2. The chattel is not being used for some larger component or function of the land.
43
Prohibition Clauses for Tenants / Waiver / Consent
Allowed to prohibit assignment or sublease. If the lease prohibits only assignment, the tenant may still sublease.
If the tenant violates the prohibition, the landlord can terminate the lease.
However, if the landlord accepts payment from the new tenant, he **waives** the right to enforce the prohibition clause.
Some clauses allow assignment or sublease only with landlord’s consent. The landlord can only withhold consent on a commercially reasonable ground.
44
Adverse Possession
Allows a person to obtain ownership of property by meeting the elements:
1.** Exclusive** - must not share the land with the true owner
2.** Hostile** - must be without the owner’s permission or invalid deed (Majority – objective; Minority - subjective)
3. **Continuous** - possession must be continuous and uninterrupted through the statutory period
4. **Open, Notorious, and Actual**—possession is apparently or visible to reasonable owner
| (look at tacking)
45
Tacking
Allows subsequent possessors to “tack on” to prior possession periods. Requires some **type of privity**.
46
Scope of Possession
Generally, only transfers title to the** portion** that was actually adversely possessed.
47
Color of title
Means person comes on to title with an invalid deed / will.
Allows the possessor to obtain title to the **whole property **under constructive adverse possession.
Still subject to existing easements on the land.
48
Adverse Possession Tolling
The statute of limitations for adverse possession does **not run against** a true owner of the property who was afflicted with a **disability **at the inception of the adverse possession.
**Insanity, infancy, and imprisonment **are disabilities that toll the statute of limitations until the disability is removed.
49
Valid Deed Requirements
1. Must identify the **parties**
2. must be **signed** by the grantor
3. must include **words of transfer,** and
4. must contain a reasonably definite **property description**
50
Intent to Transfer a Valid Deed
A deed is a legal instrument that transfers ownership of real property from the owner (grantor) to another (grantee). For a transfer by deed to be effective:
* the grantor must have the **present intent** to convey ownership of the property interest to the grantee and
the grantee must **accept** the transfer, which is **presumed** if the transfer is **beneficial** to the grantee.
If the grantor intended to presently transfer, he cannot void the gift later.
51
Transfer Upon Death
If the grantor intended to transfer only upon his death, it is **not a present intent** to transfer.
It is a testamentary transfer and is governed by the wills requirements.
52
Transfer to Third Party Agents
Grantor may have an independent third party deliver the deed to the grantee, but the grantor may reserve the right to take the deed back not deemed delivered.
If the grantor does not reserve the right to take the deed back, the grantor’s intent to presently transfer the property is determined by the facts.
53
Testamentary Transfer
If the grantor gives the deed to an independent third party for delivery upon the grantor’s death, the grantor’s intent to make a present transfer is determined by the facts.
54
General Warranty Deed
Contains six covenants (i.e., promises) relating to the conveyance:
**Three Present Covenants - **
(1)** Covenant of Seisin**—the grantor owns the land as described in the deed
(2) **Covenant of the Right to Convey**—the grantor has the right to transfer title
(3) **Covenant Against Encumbrances**—no undisclosed encumbrances
Breach occurs at the time of conveyance. Present covenants **do not run with the land**; a later grantee cannot sue the original grantor.
**Three Future Covenants**
(4) **Covenant of Quiet Enjoyment**—the grantee’s possession will not be interfered with by a third party’s claim for title
(5) **Covenant of Warranty**—the grantor will defend against a third party’s claim for title
(6) **Covenant of Further Assurances**—the grantor will do whatever is necessary to pass title to the grantee
Breach occurs when there is** interference** with possession. Future covenants **run with the land**; a later grantee can sue the original grantor
55
Quitclaim Deed
Contains no covenants of title. The grantee receives whatever interest the grantor possessed.
56
Implied Warranty of Fitness or Suitability
| (new homes being built)
Seller warrants he used adequate materials and workmanship. Covers hidden (i.e., latent) defects and obvious defects.
The buyer has a duty to **reasonably inspect** the residence.
Buyer may sue for breach against the builder, developer, and contractors within a **reasonable time** after discovery of the defect
57
Recording a deed
A valid deed does not need to be recorded to convey good title.
58
Common Law Recording
Common law rule is “first in time, first in right”—the first person to obtain rights in the land is viewed as the true owner, regardless of later conflicting claims.
59
Notice Can Be:
(1) **Actual**—Actual knowledge
(2)** Inquiry**—Reasonable investigation would have disclosed prior claims
(3) **Constructive**—Grantees are on notice of all prior interests that were properly recorded
| (Look at the time the purchaser acquires interest of the property)
60
Notice Statute
If a person purchases land** without notice** of a prior interest, the person will **prevail** in an ownership dispute against the prior interest.
61
Race Statute
The** first person to record** their deed will prevail in an ownership dispute, regardless of notice.
62
Race-Notice Jurisdiction
If a person purchases land **without notice** of the prior interest AND** records first**, the person will prevail in an ownership dispute against the prior interest.
63
Bona Fide Purchaser
A BFP is a person who pays value for the property and takes it without notice of prior claims.
Notice and Race-Notice Statutes protect BFPs.
BFPs are not protected from adverse possessors.
64
Gift Purchaser
A BFP must pay value for the interest, it cannot be a gift. Thus not protected.
65
Shelter Rule
BFPs who are protected by the recording act will **“shelter” their grantees** from prior claims, even if the grantee had notice.
66
Original Owner Exception
The original owner who created the title problem CANNOT avoid itself to the Shelter Rule by repurchasing the property.
67
Wild Deeds
A wild deed is one that is recorded, but because an earlier deed was not recorded, would not be found through a traditional title search.
A wild deed is not constructive notice.
68
Estoppel by Deed
A grantor who conveys an interest in land by warranty deed **before actually owning** it is estopped from later denying the effectiveness of that deed.
When the grantor acquires ownership of the land, the after-acquired title is transferred automatically to the prior grantee.
69
Judgment Creditors
Judgment creditors are not purchasers for value since the attachment of a judgment lien to a debtor's property is merely security for a preexisting debt—not payment of value. Thus, judgment creditors are not protected under the notice act.
70
Easement
The right to **use** another’s property for a limited purpose.
* The **servient** estate is **burdened** by the easement
* The **dominant** estate **benefits **from the easement
71
Classification of Easement
(1) **Appurtenant** — attached to the land
(2) **In Gross**—specific to the person
72
Four Types of Easements
1. **Express** Easement
2. **Easement** by Necessity
3. **Implied** Easement
4. **Prescriptive** Easement
73
Express Easement
Created by the parties in a writing that complies with the **Statute of Frauds**
74
Easement by Necessity
An easement by necessity is created when:
(1) the dominant estate is **virtually useless** (e.g., landlocked) without the benefit of an easement across the servient estate,
(2) the two estates were once a **single tract** of land, and
(3) the **necessity arose** when the land was severed and the two estates were created.
75
Implied Easement
Created when the owner of two parcels used one to benefit the other (i.e., a quasi-easement) and the parties** intended t**he easement to continue upon the sale of the dominant parcel.
Requires that the prior use was:
(1) **continuous**,
(2)** apparent**, and
(3) **reasonably** necessary to the dominant land’s use and enjoyment
| (Look for one parcel being split into two)
76
Prescriptive Easement
Obtained like adverse possession (continuous, actual, open, and hostile for the specific period) except there is no exclusivity requirement.
| (owner permitting use does not create this)
77
Transfer of Easement
An easement appurtenant will usually continue after land is transferred.
78
Abandoned Easement
Easement is terminated. Occurs when the owner of the easement acts **affirmatively** to show a **clear intent** to relinquish the easement.
Mere non-use of the easement is not sufficient to terminate the easement.
| (must act, not just words)
79
Easement Merger
Easement is terminated. Occurs when the owner of the easement becomes the owner of the servient estate in addition to the dominant estate.
80
Sale to a Bona Fide Purchaser - Easements
If a written easement has been granted but **not recorded**, it is **not enforceable** against a bona fide purchaser.
81
Easement Contribution
When an easement is shared, the owner who maintains or repairs the easement may seek contribution from (1) the other owners and (2) the servient-estate owner if he/she uses the easement.
82
License
A license is a **nonpossessory right **to enter and use someone else's land for a specific purpose.
A license is** freely revocable **unless the (1) licensee detrimentally relied on the license OR the (2) license was coupled with an interest in the property.
A license can be revoked by the licensor at any time, but it t**erminates automatically **upon (1) the death of the licensor or licensee or (2) the conveyance of the licensed property.
83
Fixture
A fixture is a tangible personal property that is attached to real property.
A fixture automatically transfers with the land unless the conveying instrument provides otherwise.
84
Covenants
* Involves a promise to do or not do something in relation to the land
* Land can be either benefitted or burdened by a covenant
* Can exist between landowners, and landlords & tenants
85
Covenant Benefit Requirement
| (Run with the Land?)
In order for the benefit of a covenant to run with the land, there must:
* **Writing**—must comply with the Statute of Frauds
* **Original Party Intent**—original parties must intend for the promise to run with the land
* **Touch and Concern**—must affect how both pieces of land are used
* **Vertical Privity** - the benefit will run if the successor takes **any portion** of the original estate (including a lease)
86
Covenant Burden Requirements
| (Run with the Land?)
In order for the burden of a covenant to run with the land, there must be:
* **Writing**—must comply with the Statute of Frauds
* **Intent**—original parties must intend for the promise to run with the land
* **Touch and Concern**—must affect how both pieces of land are used
* **Notice**—only required for burden to run
* **Horizontal Privity**—only required for burden to run. The original parties most have shared some interest other than the promise, such as grantor-grantee.
* **Vertical Privity** - Concerns the relationship between the original party and the successor party. For the burden to run with the land, the owner **must transfer the entire interest**
87
Covenant Abandonment
A covenant can be terminated via abandonment. Abandonment occurs when an affirmative act—something more than neglect or nonuse—shows a clear intent to relinquish the covenant.
88
Enforcement of Covenant
The injured party can sue for money damages.
89
Common Interest Community
A common-interest community is where individually owned units are burdened by a covenant that imposes an obligation to pay dues to an association.
The association is typically governed by a board, which exercises the association's power to:
* manage common property,
* administer the covenants, and
* carry out functions set forth in the declaration or granted by statute.
*
But the board must act reasonably when exercising its discretionary powers.
90
Equitable Servitude
Almost the same as a covenant except it is enforced by an** injunction** rather than money damages
Requirements for Equitable Servitude to “Run with the Land”
* Writing—must comply with the Statute of Frauds
* Intent—original parties must intend for the promise to run with the land
* Touch and Concern—must affect how both pieces of land are used
* Notice—only required for burden to run
91
Who Can Enforce Equitable Servitudes?
The benefit of enforcing an equitable servitude is held only by (1) the original parties and (2) their successors in interest.
92
Mortgage
A document that** conveys a property interest **in real property as security for an obligation.
Typically, a borrower (mortgagor) conveys an interest in his land to a bank (mortgagee) in exchange for a loan.
If the mortgagor defaults on the loan, the house could be **foreclosed** and sold at public auction
| (bank can't buy property)
93
Deed of Trust
A writing grants an interest in property as security for an obligation, but the deed goes to a third party as trustee.
If the borrower defaults, the deed of trust can be privately sold (potentially to the mortgagee).
| (bank CAN buy property)
94
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```
Purchases Money Mortgage
The borrower uses the loan in order to purchase the mortgaged property.
A home mortgage is usually a purchase money mortgage. Has priority upon foreclosure.
95
Transfer of Mortgaged Property
The debtor (mortgagor) can **freely transfer** mortgaged property to a grantee unless the mortgage states otherwise.
After the transfer, the mortgage remains attached to the property and the debtor remains personally liable for the mortgage debt.
But the grantee's obligations depend on whether the grantee either:
(1) took subject to the mortgage OR
(2) assumed the mortgage
96
Took Subject to the Mortgage
The grantee does not agree to pay and is **not personally liable** for the debt
97
Assumed the Mortgage
The grantee expressly agrees to pay and becomes **personally liable** for the debt, while the debtor becomes secondarily liable as a surety.
If the assumption was part of the purchase price, then the buyer may not raise defenses that the debtor could have raised against enforcement of the obligation.
98
Due on Sale Clause
A due-on-sale clause allows a mortgagee to **demand immediate payment **in full of the outstanding loan obligation if the mortgagor transfers the mortgaged property without the mortgagee's written consent.
If the mortgage is not paid, then the lender can initiate foreclosure proceedings to recover any remaining debt.
Exceptions:
* Devise, descent, or transfer to joint tenant upon death
* Transfer to spouse or child
* Transfer to ex-spouse in divorce
* Transfer to borrower's living trust
* Creation of subordinate lien without occupancy rights
* Granting leasehold interest of less than 3 years without option to purchase
99
Acceleration Clause
Acceleration clause makes the **full amount** of the mortgage obligation due when the** borrower defaults**.
100
Foreclosure
When the borrower fails to repay the loan, the lender can foreclose upon the property and sell it
101
Priority of interests in a foreclosure
Generally, the **first mortgage** gets priority over later mortgages
* Exception 1—when a **state recording** at applies
* Exception 2—a **purchase money mortgage** will take priority over non-purchase money mortgages, even if they're not recorded
These interests will be eliminated:
* the mortgagor's interest in the property
* the mortgage interest being foreclosed upon
* any junior interests attached to the property.
102
Ways to Avoid Foreclosure
(1) Equitable Redemption
(2) Deed in Lieu of Foreclosure
(3) Renegotiating debt
103
Equity Right of Redemption
This right arises before a foreclosure sale. This right allows the debtor to retain the property by paying the amount currently owed on the loan plus any accrued interest before the foreclosure sale, which the creditor must accept.
104
Statutory Right of Redemption
This right arises after a foreclosure sale. A jurisdiction may provide this right to allow additional time for the debtor to reclaim the property by compensating the party who purchased the property at the foreclosure sale.
105
Deed in Lieu of Foreclosure
A deed conveying a mortgagor's interest in the mortgaged property to a mortgagee** in lieu** of foreclosure allows the mortgagee to take** immediate** possession of the property without the formalities of a foreclosure sale.
Any** junior interests** remain attached to the property, and the mortgagee's interest is extinguished unless it was reserved.
106
Judicially Supervised Foreclosure Sale
The foreclosing mortgagee must give notice to the holders of any **junior interests** in the property to eliminate those interests, else they remain after the sale.
Any others who have an interest in the property or are liable on the debt may be joined as proper but unnecessary parties.
107
Future Advance Mortgage
Arises when a borrower grants an interest in their property in exchange for the right to receive future payments (i.e., a line of credit)
108
Doctrine of Equitable Conversion
Majority of jurisdictions apply this. Unless the land-sale contract states otherwise, the doctrine of equitable conversion places the **risk of loss **on the **buyer **once the contract is formed and can be specifically enforced.
A judgment obtained against a seller after the execution of a land-sale contract is not enforceable against the real property—even if the claim arose before the contract was executed.
109
Uniform Vendor and Purchaser Risk Act
Minority jurisdictions apply this. If the property is destroyed or taken by eminent domain before the buyer takes possession or title, and without fault of the buyer, **the seller bears the risk of loss**, and the buyer can recover their down payment.
110
Implied Covenant of Marketable Title / Merger Doctrine
Under this covenant, the seller promises to deliver title that is reasonably free from doubt and under no threat of litigation, such that a reasonable person would accept and pay for it.
However, under the merger doctrine, any obligations contained in the land-sale contract merge into the deed and are extinguished at closing.
111
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.
112
Public Nuisance
Unreasonable interference with the (1) health, (2) safety; or (3) property rights of the community.
| (look at public land and roads)
113
Blocking Natural Light
Absent a negative easement or statute, a landowner has no legal right to prevent neighbors from blocking his/her land from access to natural light.
114
Third Party Sub-Surface Liability
A third-party owner of subsurface rights is **strictly liable** for any failure to support the land and buildings that are prior to the conveyance of those rights, provided that the damage would have occurred in the **land's natural state.**
But the owner is liable only for **negligence** for damage to improvements built **after **the mineral rights were conveyed.
115
Installment Land Contract
Debtor agrees to buy land through installment payments & gets immediate possession, but seller keeps legal title until paid in full.
Today, states handle a buyer's failure to pay in one of three ways:
(1) Allow the seller to retain ownership of the property but require some form of restitution to the buyer
(2) Offer the buyer an equitable right of redemption—i.e., the buyer can keep the property by paying the full balance of the installment contract at any time prior to the foreclosure sale
(3) Treat the installment land contract as a mortgage, so the seller must foreclose to gain title to the property and the buyer has an equitable right of redemption and other protections
If the installment contract contains an acceleration clause, then the full balance due under the contract is due upon default and the buyer must pay it to redeem the property.
116
Sale leaseback
Seller leases property from buyer immediately after sale (i.e. landlord and tenant), & seller's rental payments function as repayments on loan.
117
Equitable Vendor Lien
Seller finances buyer's purchase with equitable vendor's lien when seller transfers title to buyer but purchase price not fully paid
118
Blocking Natural Light
Absent a negative easement or statute, a landowner has no legal right to prevent neighbors from blocking his/her land from access to natural light.
119
Judgment Creditors
Judgment creditors are not purchasers for value since the attachment of a judgment lien to a debtor's property is merely security for a preexisting debt—not payment of value.
120
Duty to Disclose House Defects
A seller of residential property has a duty to disclose any known material defects—i.e., defects that
(1) substantially affect the value of the residence,
(2) impact the health or safety of a resident, or
(3) affect the desirability of the residence to the buyer—that cannot be reasonably discovered by the buyer.
121
Adhereance to Closing Date
Strict adherence to the closing date is not required in equity unless **time is of the essence.**
If time is of the essence and the seller cannot deliver marketable title on the date of closing, then the seller is in breach and the buyer can rescind the contract.* This is true even if the seller can correct the issue within a reasonable time after closing.
122
Mortgagor Waste
A mortgagor in possession of the mortgaged property has a duty not to commit waste that would impair the mortgagee's security interest in that property. If the mortgagor breaches this duty, the mortgagee can recover damages for the impairment.
123
Buyer Accepts Land with Defects
If a seller cannot convey marketable title, the buyer can rescind the land-sale contract. But if the buyer accepts the land with the defect and the seller refuses to perform, then the buyer can (1) rescind the contract and seek restitution, (2) seek specific performance with an abatement of the purchase price, or (3) sue for damages.
124
Subrogation
Subrogation allows a third party to take a senior mortgage’s priority when the third party (1) fully pays off the senior mortgage and (2) has no actual knowledge of the junior interests.
125
Modified Senior Mortgages
A modified senior mortgage will retain its priority against junior interests as long as the modification does not materially prejudice the junior interest holders.
Time extension is not materially prejudicial.
