Flashcards in Real Property Deck (273):
Three interests in land:
3. Restrictive covenant
Present POSSESSORY estates:
Freehold and Landlord-Tenant (Non-Freehold)
Estates with future rights in possession:
Fee Simple Absolute must be fully
Alienable. No DIRECT restraints on transfer of ownership.
Any attempt at direct restraint on alienation is:
Void. Which means you ignore the restriction.
Difference b/t language of 'conditions' from language on restrictions of transferability:
Conditions may be imposed on a FSA,
but any attempt to limit the RIGHT OF TRANSFER is void.
EXCEPTION to restriction on transferability in FSA:
Right of first refusal.
Cts presume a FSA was granted unless:
language shows a CLEAR INTENT to do otherwise.
Life Estate Pur Autre Vie: If life tenant dies b/f the measuring life then:
PAV Life estate passes to the estate of the PAV life tenant and continues until the measuring life dies.
Three types of waste:
1. Voluntary Waste
2. Permissive Waste
3. Ameliorative Waste
any AFFIRMATIVE action
beyond the right of MAINTENANCE
that causes HARM to the premises
(Maintenance: Normal use of the land)
General Rule of WASTE: Life Tenant _______ the estate.
Life tenant is responsible for paying:
The INTEREST on the mortgage, not any of the principal.
Life tenants and property tax:
LT must pay all taxes on the property - if they fail to do so then life estate is forfeited.
Three things to do to avoid liability for permissive waste:
3. Pay mortgage debt (interest)
Life tenant and repairs:
LT has obligation to make ORDINARY repairs but NOT replacements.
Occurs when LT alters the property substantially thereby INCREASING the value of the land.
General Rule for Ameliorative Waste:
If CHANGED CONDITIONS make the property RELATIVELY WORTHLESS, then the LT can alter the property w/o incurring liability to the holder of the future interest.
Holder of seisen is the TAXPAYER
General Rule: Future Interests:
the INTEREST exists now but POSSESSION will not take place (if at all) until some time in the future.
Future interests retained by the GRANTOR (3)
2. Possibility of reverter
3. Right of entry.
Future interests given to the GRANTEE (2)
2. Executory interest
General Rule: REVERSION
A reversion in the GRANTOR arises whenever the grantor conveys away LESS THAN the FULL durational estate that the grantor had.
Hypo: O --> A(forlife) --> B(forlife). What interests?
A: Life Estate
B: Life Estate pur autre vie (for the duration of A's life)
If B dies then A will receive a reversion for life.
Magic Words for Fee Simple Determinable: (4)
1. So long as
Possibility of reverter goes with:
Fee Simple Determinable
HYPO: O --> A and his heirs for so long as no liquor is consumed on the premises. What interests?
A: FS determinable
O: Possibility of reverter
Fee simple on condition subsequent goes with:
Right of Entry
Hypo: O --> A and her heirs; provided however, that if liquor is ever consumed on the property the O shall have the right to retake. What interests?
A: FS on condition subesquent
O: Right of Entry
Does the title go back to grantor automatically with Right of Entry?
Does title go back to grantor automatically with possibility of reverter?
Magic words for Fee Simple on Condition Subsequent: (3)
1. Provided, however
2. but if
3. on condition that
words must be followed by language that expressly reserves the right of the grantor to retake the property
Spotting a REMAINDER in a third party:
A future interest in a third party grantee that comes NATURALLY and IMMEDIATELY on the termination of the preceding estate.
If nothing stands in the way of its becoming possessory on the natural expiration of the preceding estate. (Taker is ascertainable and no conditions to the taking.)
Hypo: O --> A(forlife), then to B and his heirs if B survives A. Interests?
A: Life Estate
B: Contingent Remainder
Where there is a condition that must be satisfied before interest in property becomes possessory.
Vested remainders subject to open rule:
Where a remainder interest is conveyed to a group of UNNAMED PERSONS
whose members are NOT YET FULLY KNOWN
the class remains OPEN to allow for future persons who qualify as class members by satisfying the class description
Hypo: O --> A for life, then to A's children. At time O makes the grant A has 3 children: B, C, and D. Interests?
A: Life Estate
BCD: vested remainder subject to open: it is open to allow for the birth of future siblings.
Rule of convenience: (Regarding Vested Remainders Subject to Open)
Class closes whenever ANY member of the class is entitled to a distribution.
Hypo: O --> H for life, then to H's Widow. At time of conveyance H is married to S. Interests?
H: Life Estate
H Widow: Contingent remainder. Remainder is contingent b/c we can only know who H's widow is when he dies.
S: When the conveyance is made S has no interest.
O: Reversion (If H is unmarried when he dies, the property will revert to O.)
When do remainders become possessory?
only upon the NATURAL (patient and kind) expiration of the previous estate.
Identifying an Executory Interest:
Operates to CUT SHORT the estate that comes before it.
O --> A for life, then to B and his heirs; but if B predeceases A, then to C. Interests?
A: Life Estate
B: FS subject to Executory Interest
C: shifting Executory Interest
Rule Against Perpetuities in Georgia
Cts will 'wait and see' if a particular conveyance vests w/i statutory period of 90 years.
When does RAP apply? (3 interests)
1. Executory Interests
2. Contingent remainders
3. Vested remainders subject to open
Two Concurrent Estates in Land:
1. Joint Tenancy
2. Tenancy In Common
Rule regarding creation of Joint Tenancies: What must be present and when?
Four unities must be present at the outset in order to create a JT. (TTIP)
Time, Title, Interest, Possession
What four unities must be present to create a joint tenancy? (TTIP)
Time - interests must have vested at the same time
Title - grand must be made in the same instrument
Interest - must have the same KIND and AMOUNT
Possession - same rights of possession
Modern presumption of concurrent estates in land create:
a tenancy in common
What magic words must be used to create a joint tenancy?
"joint tenants with right of survivorship." RIGHT OF SURVIVORSHIP must be stated EXPRESSLY in the language of the grant.
Right to partition joint tenancy: (2 ways)
1. Partition by voluntary agreement.
2. File and action for partition
Special thing about joint tenancy:
It carries the right of survivorship and therefore cannot be conveyed in a will. The surviving tenants absorb the dead tenants interest.
General rule on severance of a joint tenancy: It occurs when:
ANY one of the four unities is disturbed.
Ways to sever: (3)
2. Contract to convey
3. Creditor's Sale
General rule on severance regarding creditor's sale:
NO severance until judicial sale actually takes place.
What is the default tenancy?
Tenancy in Common
What unities are required to create a TC?
Just one. Unity of possession: Each co-tenant is entitled to possess the whole of the property.
Rule for co-tenants and profit sharing. Co-tenants generally:
do not account to others for their share of the profits unless it falls into one of the four exceptions.
What are the four exceptions to the profit-sharing rule for co-tenants? LOAD
-Lease of the property by a co-tenant to a third party.
-Ouster - acct'ing required if one co-tenant keeps another co-tenant off the property OR claims right of exclusive possession.
-Agreement to share.
-Depletion of natural resources.
Contribution concerns the right of:
one co-tenant to force the other co-tenant to pay their fair share of some expense on the property
Contribution from co-tenants required for: (3)
1. Necessary repairs
2. Mortgage payments
Contribution from co-tenants is NOT required for:
Non-necessary improvements, though this will be considered later during partition or sale of the property.
Five Landlord-Tenant Estates:
Tenancy for years
Tenancy at Will
Tenancy at Sufference
How to create a tenancy for years in GA?
1. EXPRESS intent to create TfY instead of an usufruct, OR
2. Lease in excess of five years.
Two dates that must be specified for a tenancy for years? Definite:
1. Beginning date, and
2. Ending date.
A "tenancy of years" in GA that lasts less than five years.
Notice required to terminate a tenancy for years or usufruct:
NONE. Terminates automatically.
Tenancy that continues for successive periods until terminated by proper notice.
Key phrase is REPEATING. Estate rolls on until one party gives PROPER NOTICE.
Three ways to create a periodic tenancy:
1. Express agreement
2. By implication (No agreement as to duration)
3. By operation of law.
a. Oral lease that violates the statute of frauds
b. Holdover tenant
General rule in creating periodic tenancies by implication:
If the lease does not specify how long the tenancy is to last then it is presumed to be a periodic tenancy measured by the frequency of the rent payment. (Ex. month to month if rent is paid monthly)
How does a periodic tenancy terminate?
What constitutes valid notice to terminate periodic tenancies? (2 elements)
1. Enough time (equal to the length of the period of tenancy - except for cases of year to year tenancy in which only 6 mo. is required.)
2. Effective date: Date specified in notice must be at the END of the period of tenancy.
Tenancy at Will, In GA:
When no time is specified for termination of a tenancy.
Notice requirement for termination of tenancy at will for both the landlord and the tenant:
Landlord must give 60 days notice to terminate
Tenant must give 30 days notice to terminte
Termination of tenancy at will by operation of law (5 ways)
1. Death of either party
2. Waste by the tenant
3. Assignment by the tenant
4. Transfer of title by landlord
5. Lease by landlord to third party.
Tenancy at sufferance arises when:
tenant wrongfully remains in possession after the expiration of lawful tenancy.
e. g. Holdover tenant.
Two options for landlord to cure tenancy at sufferance:
1. Sue to evict: sue in TRESPASS, recover DAMAGES. (In GA LL must continue to provide utilities until eviction is complete.)
2. Impose new periodic tenancy.
Rules for imposing a new periodic tenancy on a tenant at sufferance: Residential:
If expired tenancy was for less than a year - new tenancy is measured by the period covered by rent payment. RESIDENTIAL - month to month.
Can a LL demand a raise in rent from a holdover tenant?
Yes, IF LL gave tenant notice BEFORE the expiration of the lease.
Two duties of the tenant:
1. Duty to pay rent
2. Duty to maintain
If the premises are destroyed w/o fault to the tenant, can he terminate the lease?
Yes, if he chooses.
LL remedies for failure to pay rent: May do two things:
LL may sue for damages AND terminate the lease - evicting the tenant from the property AFTER a 7 day grace period for the tenant to pay rent.
GA, LL remedies for unjustifiable abandonment: (3)
1. Terminate the lease - T has no further rent obligations
2. Relet the property holding T liable for any deficiency in rent.
3. Let property remain vacant while collecting rent from T.
Duty of LL to deliver possession of leased premises:
LL must deliver ACTUAL possession of the premises to the T when the lease begins. If not, LL is in breach.
Does a LL have a duty to repair if T's interest is a usufruct?
Every lease includes implied covenant of quiet enjoyment, which is landlord's:
implied promise not to interfere w/ the tenant's quiet enjoyment of the leased premises
(both residential and commercial.)
Three ways LL can breach implied covenant of quiet enjoyment:
1. Total eviction
2. Partial eviction
3. Constructive eviction
Where partial eviction occurs BY the LANDLORD what can tenant do?
Stay on what is left for free.
What can tenant do when partial eviction occurs by someone OTHER than the LL?
Rent is proportionally reduced to reflect the amount taken.
Constructive eviction occurs when LL fails to provide:
some service that LL is obligated to provide AND that failure makes the property uninhabitable.
(Does not involve actual exclusion from the premises.)
Four requirements to establish constructive eviction:
Lf Si N&RtR A
1. Must be LANDLORD's failure to provide some svc (not a third party)
2. There must be a SUBSTANTIAL INTERFERENCE w/ T's quiet enjoyment
3. T must give LL NOTICE and reasonable time to repair, AND
4. T must abandon w/i a reasonable time.
What does T have to do to transfer usufruct?
Must first obtaining LL's consent.
Transfer of ALL remaining lease
(T2 will hand in keys)
Transfer of only a part of the remaining lease
(T1 will hand in keys)
Key to assignments: Lease involves what two things:
1. A contract: creating PRIVITY OF K b/t parties of the lease agreement.
2. A conveyance of an ESTATE, of an interest in LAND, creating PRIVITY OF ESTATE b/t parties.
Assignment: Successive assignees can be liable for rent to LL if there is either:
1. Privity of estate, or
2. Privity of K
Privity of Estate exists b/t:
Present LL and Present T
Privity of K exists only when:
there is an agreement (K) b/t LL and the particular T that LL seeks to recover rent from.
Covenant to pay rent runs with the land and therefore is enforceable based on either: (2)
1. Privity of estate, or
2. Privity of K
Common sense test for covenants that touch and concern the land. If the covenant makes the property either:
MORE VALUABLE or
then it touches and concerns the land.
Sublease: Subtenants are generally not liable for rent to:
SubT is in privity w/ sublessor, not LL.
LL can recover from anyone w/ whom he is in privity. (Usually not a sublessee b/c no privity.)
In the case of a sublease, who keeps the estate?
Will the sublessee be liable to LL on lease covenants?
No. But sublessor continues to be liable.
Clause that says T may not assign or sublet w/o the express permission of the LL
Validity of non-assignment clauses:
Fully enforceable, BUT courts will STRICTLY CONSTRUE. SO non-assignment does not prohibit a sub-lease and vice versa.
Waiver of non-assignment clause:
Permission given once waives the clause for all time unless LL states otherwise at the time of transfer.
Does a partial taking under eminent domain release T from rent obligations?
No. T must pay FULL RENT.
What does T get in the event of a partial taking? Amount equal to:
the rent that was to be paid over the remainder of the lease term for portion of the property that was condemned.
Does T continue to pay rent under a complete taking?
No. This extinguishes the lease and T is excused from paying further rent.
Does T get any money in the event of a complete taking?
T shares in the condemnation award only to the extent that the fair rental value of the property exceeds the amount of rent due under the lease.
In GA, by statute, a LL is required to keep the premises:
in good repair.
Latent defects: At the time lease is entered into LL has a:
DUTY TO DISCLOSE latent defects that LL knows or has reason to know of, which T could not discover by reasonable inspection.
If he doesn't, LL is liable for injuries caused by the condition.
Tort liability on LL: Short term lease of a furnished dwelling: LL is liable for:
ANY defects EVEN if LL neither knows nor has reason to know of such defects.
(Short term = 3 mo. or less.)
Common passageways under LL control: Tort liability on LL: LL is liable if he:
failed to exercise reasonable care (Negligence standard)
LL will be liable if his repairs are:
done negligently or give a deceptive appearance of safety.
Three requirements to make LL liable under public use exception: LL must know (or should have known): MD TwnF PU
1. about MAJOR DEFECTS.
2. T WILL NOT FIX the defect
3. That the PUBLIC will be using the premises (like a business)
Tenant's tort liability: T always liable to:
3rd party invitee for negligent failure to correct dangerous conditions on the leased premises.
become a part of the real property.
Determining if something is a fixture:
Turns on INTENT: Did the person installing INTEND that the item of personal property remain with RP as a fixture?
Four factors in determining if an item is intended to be a fixture:
DA GC DH TF
1. Degree of attachment - the more that is done to attach something, the more likely it is a fixture.
2. General custom - do people normally take this kind of stuff with them?
3. Degree of harm to premises on removal.
4. Is it a trade fixture?
Trade fixtures can _______ be removed.
If item of personal property when can it be removed? Rules for Tenant and Seller
Tenant: BEFORE T vacates at end of the lease
Seller: BEFORE closing.
Non-possessory interest in land involving a right to use the land.
There must be two tracts of land.
An easement that DIRECTLY BENEFITS the use and enjoyment of a SPECIFIC parcel of land.
Burdened property (one that is going to have the easement on it.)
Benefitted property (the one whose tenants are going to use the burdened estate)
Easement in gross
Only one parcel of land involved. Ex. utility easement.
Three ways to create an easement:
1. Express easement
2. Implied easement
3. Easement by Prescription (adverse)
Implied easement: Necessity:
If property is landlocked owner of servient estate must grant easement - SE owner can choose where the easement is, as long as it's reasonable.
Easement is extinguished when the need for the easement is remedied (ex. a new public road)
Four requirements to establish a prescriptive easement: OACS
1. Open and notortious
2. Adverse (w/o owners permission)
3. Continuous and uninterrupted for
4. Statutory period. (20 yrs for wild land, 7 yrs for improved land)
Transfer of Easement Appurtenant (Dominant Estate)
All who subsequently succeed title to the dominant estate become entitled to the easement.
Can personal easements in gross be transferred?
Can commercial easements in gross be transferred?
Transfer of Easement Appurtenant (Serviant Estate)
Are binding on subsequent holders, provided the holder had some kind of notice.
Servient estate notice on an easement: (3 ways)
2. Constructive (from the recording doc. in the direct chain of title)
3. Inquiry (you can see it upon inspection of the land.)
Two presumptions on the scope of easements:
1. Lasts forever unless otherwise stated.
2. Use is for reasonable development of dominant estate.
Easements: Reasonable development is that:
which would likely have been contemplated by the parties at the time the easement was granted.
Remedy for excessive use of an easement:
Enjoin the excessive use but do not terminate the easement.
Rules for repair of the easement: (4)
1. Holder of the benefit (dominate) is responsible for necessary repairs.
2. Dominate can always go on to servient estate to repair easement.
3. Dominant must make a reasonable restoration of servient estate after making repairs to the easement.
4. Holder of servient estate has NO repair obligation.
Six ways to terminate easements:
2. Deed of Release
4. Termination by Estoppel
5. Termination by Prescription
6. Termination of Easements Created by Necessity
Abandonment of Easement: (2 ways in GA)
If non-use continues for a period of time long enough to raise a presumption of abandonment. (usually the statutory period)
Dominate estate manifests intent by taking some physical action to show intent to abandon.
Termination of Easement by Estoppel: (Two elements)
1. Representation (written) of relinquishment of the easement by the holder of the dominate estate, AND
2. Holder of servient estate must make a change in his position in reliance of that representation.
Termination of Easements Created by Necessity:
Once the necessity that gave rise to the implied easement ceases to exist, the implied easement will AUTOMATICALLY terminate.
Easements for view and sunlight:
NO IMPLIED EASEMENTS for these things.
Ltd privilege to use land in possession of the licensor
Wrongful revocation of license remedy:
If an easement is attempted but fails b/c of the statute of frauds then:
a license is created.
If money is spent on property in furtherance of an oral license then:
that license becomes irrevocable.
Gives the right to go on the land of another and take away a natural resource.
Restrictive covenant: Gives the holder of the covenant the right to:
restrict some third party some type of use of his land.
Two categories of restrictive covenants:
1. Covenants running with the land at law (remedy: damages)
2. Equitable servitude (remedy: injunction)
Four requirements to enforce a restrictive covenant at law
3. Touch and Concern
Covenant at Law: Intent
The parties must intend for the restriction to run with the land.
Covenant at Law: Notice must be given to who?
There are three ways:
the person against whom the enforcement is sought.
2. Constructive (duly recorded in the buyer's direct chain of title)
Covenant at Law: Touch and Concern
If performance of covenant makes land MORE valuable or useful then covenant touches and concerns the land.
(This includes covenants not to compete.)
Two kinds of privity:
Restrictive Covenants: Privity: If successor in interest is the P then that person is trying to establish the:
BENEFIT of the covenant runs to the P (himself) and only needs VERTICAL privity
Restrictive Covenants: Privity: If the successor in interest is D then that means P is suing D to establish that the:
BURDEN of the covenant runs to D and binds D.
Requires both HORIZONTAL and VERTICAL privity.
Refers to the ORIGINAL PARTIES to the promise.
Horizontal privity requires that the original parties to the promise must have shared:
some interest in the land independent of the covenant. (e.g. grantor/grantee, LL/T, etc.
On Exam there must be a conveyance of the property b/t the original parties.
Refers to those who subsequently obtain the property subject to the covenant. Successors must take FULL ESTATE.
Three requirements to obtain and INJUNCTION to enforce the BURDEN of the promise as an Equitable Servitude:
1. Intent that restrictions be enforceable by successors in interest.
2. Touch and concern
3. Notice to subsequent purchaser.
Two requirements to enforce the BENEFIT of a covenant as an EQUITABLE SERVITUDE (2)
1. Intent restriction be enforceable by successors in interest
2. Touch and concern
Defenses to enforcement of a covenant as an equitable servitude: (4)
1. Unclean hands (P made same use of property)
2. Acquiescence (P let other land owner do the same thing)
3. Laches (P only complained AFTER the project was finished)
4. Estoppel (P represented she had no problem with D's plans.)
Three ways to terminate covenants and servitudes:
1. Deed of release
3. Changed conditions
Changed conditions: In a subdivision:
ALL the lots in a subdivision must be affected - not just SOME.
Six Requirements for Adverse Possession : HELUVA
SoL for adverse possession:
20 years UNLESS the adverse possessor has color of title, then it's 7 years.
Special adverse possession rule in GA:
Good faith is required to establish title by AP.
Adverse possession against a co-tenant?
Nope. UNLESS the co-tenant in possession excludes the other co-tenants from possession and the statutory period runs.
Adverse possession and future interests:
AP clock does not start running until interest b/c possessory
Adverse possession: Tacking rule:
AP can tack together successive periods in order to satisfy req't. But there cannot be any gaps.
Same is true for tacking with true ownership
Adverse possession: Disabilities (3 I's)
Adverse possession: GA tolling:
Clock will STOP in the event of a disability, even if it wasn't in existence at the beginning of AP.
Title acquired by AP is not marketable. How do you make it so?
File a court action to quiet title.
Two steps in conveyancing:
1. Contract of sale
2. At closing is ACTUAL conveyance
Statute of frauds requires conveyances have three things:
1. Description of property
2. Names of parties
Exception to Statute of Frauds:
Doctrine of Part Performance
Two requirements to use the doctrine of part performance exception:
1. Oral K must be certain and clear; and
2. Partial performance must CLEARLY prove up the existence of a K.
Three acts of part performance that are sufficient to allow specific performance:
1. Payment of the full purchase price
2. Possession of the property along with partial payment of the purchase price.
3. Possession of the property along with substantial improvements to the property.
Risk of Loss: Doctrine of Equitable Conversion
Once K is signed equity treats property as buyer's land and therefore buyer bears the risk of loss.
Death of a party before close of escrow:
Generally will not affect the rights of the parties as set out in K
If SELLER dies b/f closing:
Buyer will close and tender purchase price to sellers estate. Seller's estate has an interest in personal property.
If BUYER dies b/f closing:
Seller closes with buyer's estate and buyer's estate has an interest in real property.
Implied covenant of marketable title:
promise that the seller will deliver marketable title by the CLOSE OF ESCROW.
title that a reasonably prudent buyer would accept.
Three thing necessary to settle implied covenant of marketable title:
1. Proof of title
2. Title free of encumbrances
3. Valid legal title
Seller must give title free of encumbrances other than those which have been:
Zoning is NOT treated as an encumbrance of title; however
VIOLATIONS of a zoning ordinance do constitute an encumbrance.
What does buyer do if sellers title is not marketable?
Buyer must notify the seller of defect and allow the seller a reasonable time to CURE the defect.
Three buyer's remedies for failure to deliver marketable title:
2. Damages for breach of K
3. Specific performance which will be coupled w/ a REDUCTION in the purchase price to reflect the defects
Is time of the essence?
Remedies for Breach of K for sale of Real Property
Measure of damages in breach of K for sale of RP?
generally the difference b/t the K price and the value of property as of the date of breach.
Specific performance is available to:
Buyer and the seller.
Two requirements necessary for deed to pass title:
GA Law on Deeds: Deed must be properly ______ order to be ________ .
attested in order to be RECORDED.
Proper attestation req's 2 witnesses and one must be a notary.
Can parol evidence be used to clarify deed description?
Delivery of deed: Test is solely whether grantor had:
INTENT to pass title. No phyiscal transfer is necessary
Recording a properly executed deed raises:
a presumption of delivery. Even if grantee knows nothing about the deed.
Can a future interest be recorded in a deed?
Do oral conditions control in a deed?
Acceptance of a deed will be implied unless:
facts show otherwise.
Grantor makes no promises regarding title.
General warranty deeds include six traditional forms of covenants. ALL SIX RUN WITH THE LAND SO ALL SIX can be enforced by any subsequent purchaser.
"Seasoned Convicts Engage in Quiet Whisper For Assistance"
2. Right to Convey
3. Against Encumbrances
4. Quiet enjoyment
6. Further assurances
Covenant of Seisen and Right to Convey
promise that seller has title and possession and can vaildly convey both.
Covenant of quiet enjoyment and Covenant of Warranty:
promise to protect the buyer against anyone who comes along later and claims paramount title to the property.
Where there is breach of warranty P's damages are ltd to
the amount of purchase price received by warrantor, plus incidental damages.
Race Notice Statute: Protects all subsequent grantees who are BFPs who:
1. take WITHOUT NOTICE, and
2. are the FIRST TO RECORD
First to record w/o notice gets priority.
Bona Fide Purchaser
Purchaser for value who takes w/o notice.
How much consideration is required?
ANY consideration out of pocket
ANYONE who takes from BFP (including heirs, devisees, etc.) can shelter under the rights of a BFP.
Security interest in property given by a debtor (mortgagor) to the creditor (mortgagee)
Three types of security interests:
2. Deed of Trust
3. Land sale contract
Two security interests that are also treated as mortgages by cts.
2. Absolute Deed w/ separate promise of re-conveyance (Equitable mortgage)
3.Sale Leaseback w/ option to repurchase.
Deed of Trust
Deed given to third party who holds it in trust until loan is paid off.
Land sale contract:
arrangement where debtor signs a K promising to make payments to the seller -- but the SELLER keeps title to property until the loan is paid in full.
Security Deed: (Absolute Deed for Security Purposes)
Title passes to the lender but ONLY FOR THE PURPOSES of securing the debt. Treated like a mortgage.
Lien theory state:
Title does not pass until the foreclosure sale.
Debtor's right of redemption:
Up until the moment of foreclosure debtor can redeem property by paying the amt in arrears plus interest unless mortgage includes an acceleration clause - in which case the entire balance of the debt is due.
- in which case the entire balance of the debt is due to redeem after default.
Right of redemption waiver:
Generally cannot be waived unless there is separate consideration for the waiver.
Purchase Money Mortgage
Mortgage taken out to BUY property
General Rule for PMM priority: A PMM receives priority over:
other mortgages that were executed PRIOR to PMM, even if earlier mortgage is rec'd first.
PMM by seller gets priority over:
PMM given by a third party lender
If mortgagor does anything to increase a senior mortgage then that mortgage loses it's priority over junior mortgages to what extent?
Only to the extent of the change.
Foreclosure wipes out:
ALL junior interests.
Since FC wipes out Jr. Interests Jr. Lenders are considered a:
NECESSARY PARTY in a foreclosure.
Order of payment after a foreclosure sale:
1. Costs (ct costs, atty fees)
2. Mortgage that was foreclosed on
3.Junior interests in order of priority.
4. Any remaining balance to mortgagor. (homeowner)
SENIOR mortgages stay in place.
If debtor misses a payment the seller can cancel the K, keep all the monies paid to date and retake the property. Enforceable but cts are hostile to this clause.
Generally when a mortgagor transfer title of the property, grantee:
AUTOMATICALLY takes the property subject to the mortgage.
Does grantee have personal liability on the mortgage?
Not unless he specifically assumes the mortgage.
Creditor's (Mortgagee's) Transfer of Notes:
Mortgagee can freely transfer notes and the mortgage will always follow the notes.
Due on Sale Clause
If the mortgagor transfers property w/o mortgagees consent the full amount on the loan becomes immediately due and payable. (must be in the language.)
If the mortgage on the house is foreclosed what happens with security interests on fixtures?
Subordinate to the earlier mortgage on the property unless the UCC Art 9 Fixture filing has been made w/i 20 days after attachment.
Lateral Support: Right of a landowner to have:
land supported by adjoining LO and STRICT LIABILITY results if the land is not supported.
Lateral support of buildings: Adjoining LO liable only if:
the land beneath the improvement would have collapsed anyway.
Support from the bottom.
Subjacent support comes from situations where:
mineral rights have been legally separated from the surface rights.
In subjacent support _______ will result if land isn't supported.
Scope of right in subjacent support: Extends to:
Land AND to those IMPROVEMENTS that were existing on the land as of the date the mineral rights were severed from the FS.
Refers to those whose property borders on a lake or stream.
Riparian Rights: Domestic Use Rule
Owner may use ALL the water needed for DOMESTIC purposes
Riparian Rights: Non-Domestic Use Rule (commercial or industrial uses)
Owners are limited to a REASONABLE USE standard.
Underground water statute:
LO may take up to 100,000 gal of water/day w/o a permit.
Surface water: Natural Flow
LO are not to make any changes at all in the flow of flood water - but it has been highly modified by the reasonable use theory.
When does the Life Tenant NOT have to pay the interest on the mortgage?
If LT is not using the land or receiving any income from the land they are not responsible for even the interest.
How much must LT pay in repairs? It's limited to:
the amount of rents and profits made from the land.
Life Tenant repair obligation: If NO rents and profits then repair obligation:
is ltd to reasonable rental value IF LT is USING the land.
Life Tenant repair obligation: If LT is receiving NO income on the property and is not otherwise using the property:
then LT has NO repair obligation.
What are T's remedies if the LL of an usufruct fails to make necessary repairs in a reasonable time?
T may make the repairs and deduct the cost of repairs from the rent.
Rules for imposing a new periodic tenancy on a tenant at sufferance: Commercial
Leases for COMMERCIAL property may be imposed for year to year.
future interests in third parties that either divest a transferee's preceding freehold estate (shifting interests), follow a gap in possession or cut short a grantor's estate (springing interests)
O-->A and his heirs when he marries B. Interests?
A: Springing executory interest b/c it divests the grantor's estate
O-->A for life, then two years after his death to B. Interests?
A: Life estate
B: Springing Executory Interest b/c there's a gap in time.
If there is unjustified abandonment a LL may consider the abandonment a surrender of the leasehold and terminate the lease. In this case, what are the rent obligations of T?
no further rent obligations
If there is unjustified abandonment a LL may relet the property, in this case what is T liable for?
any deficiency in rent.
Tenancy for Years:
Continues for a fixed period of time and terminates automatically.
When is a tenancy for years required to be in writing?
When it is for more than one year, to satisfy the SoF.
In GA what turns a tenancy at sufferance into a tenancy at will?
Anything that indicates the LL permission for the tenant to stay on the property.
In concurrent estates an ouster happens in one of two ways:
one co-tenant keeps another co-tenant off the property OR claims right of EXCLUSIVE POSSESSION.
A tenant who has been constructively evicted may:
Terminate the lease AND seek damages.
In GA constructive eviction in commercial leases occurs when a LL w/ duty to maintain a proper state of repair allows: 2 things.
1. Premises to b/c unfit for conducting the business for which it was rented, and
2. Premises cannot be restored w/ ordinary repairs that do not unreasonably interrupt T's business.
Periodic tenancies: What constitutes enough time to terminate periodic tenancies?
equal to the length of the period of tenancy - except for cases of year to year tenancy in which only 6 mo. is required.
Two ways periodic tenancies are created by operation of law:
Oral lease that violates the statute of frauds
In the event of a complete taking, how much of the condemnation award is T entitled to?
Rent due under lease minus fair rental value of property: Entitled to excess.
In GA, even if a fixture is not attached to the land it will pass with the realty if it was:
intended to remain permanently in its place.
In addition to being required to keep premises in good repair, a LL can also be liable in tort for:
defective construction of all substantial improvements placed on the premises by his consent.
After parting with possession of the premises, a LL is NOT responsible to third party injuries resulting from:
T's negligence or illegal use of the property.
To bring tort action for failure to keep premises in good repair tenant must show not only the statutory breach but also: 2
1. the breach was the proximate cause of the injury.
2. LL knew or should have known of the condition in the exercise of ordinary care.
Tenant may not recover damages for LL failure to repair premises if tenant had:
equal or greater knowledge of the defect and did not exercise ordinary care to avoid injury.
Deed of release:
Terminates an easement. To be valid it must be in writing and satisfy all deed formalities.