Real Property Flashcards
(50 cards)
Present Estates
Fee Simple Absolute – a conveyance of absolute ownership of real property (no conditions placed on it).
− It’s freely devisable, descendible, and alienable.
Fee Tail – a conveyance of real property to a person AND their heirs.
− Abolished in most jurisdictions; is treated as a fee simple absolute.
Fee Simple Defeasible (3 types) – a conveyance of real property with conditions.
− Created with express conditional language.
− Ownership may be terminated upon the occurrence/non-occurrence of an event or condition.
Fee Simple Determinable → reserves a future interest in the grantor (possibility of reverter).
− Created with words of duration (i.e. so long as, during, while).
− Conveyance is automatically terminated if the specific condition occurs.
Fee Simple Subject to a Condition Subsequent → reserves a future interest in the grantor (right of re-entry).
− Created when a conveyance is subject to grantor’s right of re-entry if a specific condition occurs.
− Only terminates if grantor affirmatively exercises his right of re-entry.
Fee Simple Subject to Executory Interest → reserves a future interest in a third-party (not the grantor or his heirs).
− Example → “To person X, so long as (or “but if”) … to person Y.”
Life Estate – a conveyance where the life tenant is entitled to possession during their lifetime, and upon death the real property transfers to another party (specified by deed).
− The life-tenant is responsible for ordinary expenses and taxes for the property during their lifetime.
− Life-tenant CANNOT commit waste (causing the property to decrease in value).
Present Estates Subject to Statute of Limitations?
Statute of Limitations
− Interest in Fee Simple Determinable/Subject to Condition Subsequent lasts through the applicable statute of limitations (SOL) period.
− An action for possession may be brought anytime within the SOL period (a set number of years after the action accrued).
Future Interests
Possibility of Reverter – if the condition occurs, grantee’s interest is automatically terminated and vests in the grantor.
Right of Re-entry – upon the occurrence of a specified condition, the grantor MAY re-enter and take the property.
− The grantor MUST exercise the right to terminate the interest.
Vested Remainder – is a future interest in land given to an identifiable person with no conditions.
Contingent Remainder – is a future interest in land conditioned upon the occurrence or non-occurrence of a specific event.
Life Estate (Remainderman) – upon the life-tenant’s death, ownership of the property transfers to a specified person.
− Remainderman = person(s) who receive the property upon the life-tenant’s death.
Co-Tenancy
Tenancy in Common – the default estate created when land is conveyed to two or more people UNLESS:
a) Express language states that the parties have a survivorship right (creating a joint tenancy); OR
b) If conveyed “as husband and wife” (creating a tenancy by entirety).
*Some States → Tenancy by the Entirety is created by default if the conveyance is to a married couple.
Each owner owns an undivided interest in the property, and has the right to use and enjoy the ENTIRE property.
− Interest passes by bequest or intestacy.
Joint Tenancy: Creation – created when 4 unities are present → Unity of (1) time, (2) title (same instrument), (3) interest, AND (4) possession.
− MUST have clear express intent to create a Joint Tenancy with a right of survivorship (i.e. deed states “as joint tenants”, “right of survivorship”).
Joint Tenancy: Severance
When one joint tenant unilaterally transfers his ownership interest in the property, the joint tenancy is severed. Tenants then hold the property as tenants in common.
− If there are more than two joint tenants, the joint tenancy remains, but only among the other joint tenants.
If a joint tenant takes out a mortgage on her interest:
− Title Theory Jurisdiction → severs joint tenancy
− Lien Theory Jurisdiction → does not sever
If one joint tenant leases the property:
− Most States → severs joint tenancy
Co-Tenant’s Entitlement to Rent / Reimbursement
Rent from Co-Tenant → An out-of-possession co-tenant DOES NOT have the right to receive rent unless:
a) otherwise agreed; OR
b) wrongfully ousted.
Rent from Third-Party → Co-tenant is entitled to a fair share of rent received from a third-party.
Repairs → Co-tenant is entitled to reimbursement for the costs of necessary repairs paid for (unless there was a wrongful ouster).
Improvements → Co-tenant is NOT entitled to reimbursement for improvements to the property (unless otherwise agreed).
– BUT, the improving co-tenant is entitled to the downside risk or upside gain when the property is sold.
Types of Leasehold Interests
A lease grants a tenant the present possessory interest in real property for a limited period of time.
3 Types:
(1) Tenancy for Years – lasts for a fixed period of time; automatically terminated after the period ends.
(2) Periodic Tenancy – lasts for initial period, then automatically continues for additional equal periods (weekly/monthly) until terminated by proper notice.
− Is created by:
(a) express agreement;
(b) implication if rent is paid at specific periods; OR
(c) law (when a tenant-for-years remains after termination of the period or lease is invalid).
− Termination → written notice at least a full period in advance (if yearly, 6 months’ notice is required).
(3) Tenancy at Will – continues until either party terminates it; usually created by express agreement.
− Termination → notice + reasonable time to quit the premises (in some states, no notice is required).
Tenant’s Duty to Pay Rent
runs with the land.
If tenant remains on land + does not pay rent, landlord can:
a) Evict the tenant; OR
b) Allow the tenant to remain on the property and sue for damages.
If tenant abandons the property and doesn’t pay rent, landlord may have to take reasonable steps to mitigate losses (depends on state law).
Hold-Over Tenant
If a tenant holds-over (remains in possession after the lease ends), the landlord may:
a) Initiate eviction proceedings; OR
b) Hold the tenant over.
When a hold-over occurs, an implied month-to-month tenancy is created with identical terms to the original lease.
− If tenant is informed of a higher rent before the end of the lease, the higher rent applies.
Duration:
− Modern View → month-to-month tenancy is created.
− Common Law → term is equal to original tenancy period.
Implied Warranty of Habitability
Landlord MUST provide a place to live that is habitable → reasonably suitable for human needs.
− Implied in every residential lease.
− Some courts also impose this warranty in commercial leases (in limited circumstances).
If warranty is breached, tenant may:
a) move out & terminate the lease;
b) withhold or reduce the rent;
c) repair the issue & deduct the cost; OR
d) remain on the premises & sue for damages.
Constructive Eviction
Every lease includes an implied covenant of quiet enjoyment that prevents a landlord from interfering with the tenant’s quiet enjoyment and possession of the property.
− This covenant is breached when a tenant is constructively evicted. Constructive Eviction → occurs when:
1) Landlord breached a duty to tenant;
2) The breach caused a loss of the substantial use and enjoyment of the premises;
3) Tenant gave landlord notice of the condition;
4) Landlord failed to remedy the condition within a reasonable time; AND
5) Tenant vacated the premises.
*If constructive eviction occurs, tenant may terminate the lease, seek damages, & may avoid rent for time constructively evicted.
Residential Leases → Landlord HAS a duty to (1) repair common areas, and (2) warn of latent defects that create a risk of serious harm that the landlord knows of (or should know of).
Commercial Leases → Landlord has NO duty to repair (unless specified in the lease agreement).
Duty to Provide Possession
2 views:
− Majority View (“English Rule”) → Landlord is obligated to deliver both legal & actual possession of premises at start of lease term.
− Minority View (“American Rule”) → Landlord is only obligated to provide legal right to possession (a tenant has no claim against landlord for a trespasser or holdover tenant, but can bring an action against the person occupying the premises).
Landlord’s Duty to Mitigate Damages
Common Law → NO duty to mitigate damages.
Most States → Impose a duty to take reasonable steps to mitigate losses (i.e. attempting to lease the property to another).
− The mitigation DOES NOT need to be successful in order to recover damages
Assignment of a Lease
when a tenant transfers ALL of his remaining lease interest to a third-party.
− A lease may be freely assigned UNLESS the lease states otherwise.
− An assignment CANNOT be for a longer period than the remaining lease term.
Liability for Rent / Breach:
− Assignee → liable to the landlord for rent and all other covenants that run with the land (privity of estate).
− Assignor (Original Tenant) → also remains liable for rent (privity of contract).
− Landlord → maintenance obligation runs with the land (privity of estate). Landlord’s Consent for Assignment → If the lease requires landlord’s consent, consent MUST be obtained.
− Landlord waives the right to enforce a provision prohibiting assignment if he accepts rent from the assignee.
If a lease silent on the Standard of Consent (a silent consent clause):
− Traditional/Majority View → Landlord may withhold consent for any reason.
− Modern/Emerging View → Landlord MUST have a reasonable basis for withholding consent.
Subleases
when a tenant (sublessor) transfers ONLY SOME of his remaining lease interest.
− Tenant may freely sublet UNLESS a provision in the lease states otherwise.
− A sublease CANNOT be for a longer period than the remaining lease term.
Sublessee is NOT liable to the landlord for rent or other covenants (there is no privity of estate).
− Sublessor (original tenant) remains liable to landlord for rent (privity of contract).
Surrender of a Lease
an agreement to end a lease early.
− Landlord must clearly accept surrender of the lease (unless otherwise agreed).
− An attempt to end the lease early (such as leaving the keys) DOES NOT constitute a surrender unless landlord clearly accepts.
If landlord:
− ACCEPTS the surrender → tenant’s duty to pay rent (after the acceptance) ends.
− DOES NOT accept the surrender → tenant is deemed to have abandoned and is liable for damages.
Real Covenant
a non-possessory interest in land that obligates the holder to either do something or refrain from doing something.
− Remedy = damages
To enforce the Benefit of a Covenant, must have:
1) a writing satisfying the statute of frauds,
2) intent that the covenant runs with the land,
3) vertical privity – when a successor holds the entire interest held by a predecessor, AND
4) the covenant touches & concerns the land (makes the land more useful or valuable). To enforce the Burden of a Covenant, must have elements (1)-(4) above, PLUS:
1) horizontal privity between the original parties (the two parties shared some interest in the land independent of the covenant), AND
2) the new owner must of had notice of the covenant.
Notice = actual (knowledge), constructive (covenant is recorded), OR inquiry (inspection would reveal it).
Equitable Servitude
a covenant that equity will enforce if the burdened estate had notice of the covenant (regardless of whether it runs with the land).
− Remedy = injunctive relief
To enforce the Benefit of an Equitable Servitude, must have:
1) a writing satisfying the statute of frauds,
2) intent for the servitude to be enforceable, AND
3) the servitude touches and concerns the land (makes the land more useful or valuable).
To enforce the Burden of an Equitable Servitude, must have elements (1)-(3) above, PLUS (4) the new owner must of had notice of the servitude (actual, constructive, or inquiry).
Common Scheme or Plan Doctrine
courts will imply reciprocal restrictive covenants on land parcels in a subdivision sold by a developer ONLY IF:
1) Developer had a common scheme or plan that ALL parcels would be subject to the restriction at the time sold; AND
2) Land owner had notice of the restriction – (a) actual, (b) constructive/record, or (c) inquiry – obvious from looking at the subdivision.
Reciprocal negative servitudes only apply to negative covenants and equitable servitudes.
Condos, Co-Ops, & HOA’s
A Common Interest Community (“CIC”) is a development/neighborhood of individually owned lots which have an obligation to:
a) pay for/contribute maintenance of the property held in common; OR
b) pay dues or assessments to an association that maintains the neighborhood and/or properties.
*Typical CIC’s = condos, co-ops, and HOA’s.
Residents and successive owners are subject to recorded obligations (restrictive covenants) that run with the land.
Easement
is a non-possessory interest in the use of someone else’s land.
− Easement in Gross → benefits a specific owner’s enjoyment (DOES NOT pass to subsequent owners, unless easement is for commercial activity).
− Easement Appurtenant → benefits any owner’s enjoyment (DOES pass to subsequent owners, if owner had notice).
4 Ways to Create an Easement:
Easement by Grant → Requires:
1) a writing signed by the grantor;
2) identify the land and parties involved; AND
3) indicate grantor’s intent to convey the easement.
*Scope = the use agreed upon.
Easement by Prescription → Created when a possessor’s use of the land is:
1) open and notorious;
2) continuous;
3) hostile (without permission from the land owner); AND
4) for the statutory period (i.e. 10 years).
*Scope = actual usage during statutory period.
Easement by Implication → Established when:
1) a single tract of land is divided by a common owner;
2) a pre-existing use by the grantor is established prior to the division;
3) use was continuous and apparent indicating that it was meant to be permanent; AND
4) the use is reasonably necessary for the owner’s use and enjoyment of the land conveyed.
*Scope = the prior use.
Easement by Necessity → Created if:
1) land owned by one owner is subdivided; AND
2) the easement (access of land) is essential to the use because no other ingress/egress is available.
*Scope = is limited to remedying the necessity.
Termination of an Easement
An easement may beterminated by:
a) Estoppel – when the servient estate owner reasonably relies (or materially changes position) on an assurance that the easement will not be enforced;
b) Termination of the necessity;
c) Involuntary destruction of the servient estate;
d) Condemnation of the servient estate;
e) Written release;
f) Abandonment – a physical action showing an intent to never use the easement again;
g) Merger of the properties (if land is separated again, it does not revive the easement); OR
h) Prescription.
License
the privilege to use another’s land in a particular way.
− Doesn’t need to be in writing.
− May be revoked at any time by the licensor, BUT licensor may be estopped from revoking if licensee invested substantial money/labor in reasonable reliance.
*A license is NOT an interest in land.
Profit
gives the holder the right to take natural resources such as petroleum, minerals, timber, and wild game from the land of another.
