Real Property Flashcards

Question

Tenant's Duties

Answer 1

* duty to pay rent * duty suspended in three circumstances: 1. premises destroyed (but not by tenant) 2. landlord **completely**, **partially**, or **constructively** evicts tenant 3. landlord materially breaches * breach of **implied covenant of quiet enjoyment** * breach of **implied warranty of habitability** * duty to avoid waste * duty not to commit **affrimative** or **permissive** waste * exception: normal wear and tear * must notify landlord of need for repairs * **residential lease** provision that puts repair duty on tentant is generally void * may commit **ameliorative** waste, usually with permission

Answer 2

In both residential and commercial leases, there is an implied covenant of quiet enjoyment that is breached where the landlord takes actions that make the premises wholly or substantially unsuitable for the their intended purpose, causing the tenant to be **constructively evicted**.

Answer 3

Elements: 1. premises are unsuitable for ther intended purpose (breach of **ICQE**) 2. tenant notifies landlord, 3. landlord does not correct the problem, and 4. **the tenant vacates the premises** after a reasonable time

Answer 4

The landlord has an implied obligation to maintan residential property such that it is suitable for such use and does not pose a threat to health or safety. * tenant cannot waive * failure to comply with housing code constitutes a breach * if tenant has **notified** landlord and landlord has had **reasonable opportunity to fix **but has not, tenant may * refuse to pay rent, * rememdy the defect and offset rent by the cost, or * defend against eviction

Answer 5

* duty to repair (where not tenant's fault) * in a commercial lease only, may place duty on tenant * duty to deliver possession * majority: must deliver actual (physical) possession * minority: only required to deliver legal possession * duty to maintain conditions * must control common areas and nuisance-like behavior of other tenants * **implied covenant of quiet enjoyment** * **implied warranty of habitability** * duty to mitigate damages if tenant abandons or must be evicted * majority: must make reasonable efforts to re-rent the property * entitled to difference between original rent and new * minority: does not need to mitigate damages (usually in commercial situtions)

Answer 6

Tenant's interest: by assignment or sublease * Majority Rule: Transfers are presumable permitted; a landlord may deny permission to a transfer **only for a commercially reasonable reason**. * Minority Rule: A landlord may deny transfer at his discretion, ever for no reason at all. Landlord's interest: landlord does not need tenant's permission to transfer interest to a new party, but the new landlord is bound by the terms of the existing lease.

Answer 7

A **complete** transfer of a tenant's remaining term. * lanlord may demand rent from **either** the original tenant (**privity of contract**) or assignee (**privity of estate**)

Answer 8

A transfer of less than the entire remaining duration of the lease. Sublessee has no privity of estate with landlord * landlord may only demand rent from original tenant; * sublessee only has obligation to original tenant * sublessee not bound by covenants in original lease * unless sublessee expressly assumes * sublessee may enforce covenants by lessee, but not landlord

Answer 9

Where unlawful possessor acquires title via **continuous**, **open** and **notorious**, **hostile**, and** exclusive** use of the property. * continuous: must be for statutory period of time (20 years at common law) * seasonal use counts if consistent with type of property * period of use by one adverse possessor **tacks** to subsequent transferees * open and notorious: a reasonable owner would be on notice * hostile: cannot have permission * majority: no inquiry into adverse possessor's state of mind * minority/good faith: adverse possession must be mistaken * minority/bad faith: adverse possession must be a * title relates back to time of entry; * does not apply to future interests * does apply to subsurface rights * statute is tolled if at time of entry true possessor is disabled by **insanity, infancy, **or **imprisonment** * government property cannot be adversely possessed

Answer 10

Dedication is the appropriation of land by the owner for public use. Once land is dedicated, the owner no longer retains any rights that are inconsistent with the complete exercise and enjoyment of the dedicated use. Here, the owner’s recording of the plan is a dedication of the streets shown on the plan to public use, which means the owner gave up the rights at issue by virtue of the dedication.

Answer 11

An easement right to enter another's land for the purpose of removing its natural resources. * analyzed similarly to easements

Answer 12

* No notice necessary

Answer 13

Right held by dominant estate (or person) to make specific, limited use of servient estate. * express easements * easement by necessity * easement by implication * easement by prescription * easement by estoppel

Answer 14

A license is an oral easement that is a mere privilege (a **non-possessory** right) to enter another's land for some delineated purpose.

Answer 15

A court will imply a contract to prevent unjust enrichment when * the plaintiff has conferred a “measurable benefit” on the defendant, * the plaintiff acted without gratuitous intent, and * it would be unfair to let the defendant retain the benefit because either * the defendant had an opportunity to decline the benefit but knowingly accepted it, or * the plaintiff had a reasonable excuse for not giving the defendant such opportunity, usually because of an emergency Plaintiff is usually entitled to restitution rather than specific performance.

Answer 16

Future interest (fee simple) in the **grantor** following a life estate

Answer 17

Given to an ascertained grantee and not subject to a condition precedent. * fully transferable, devisable, descendable

Answer 18

With class gifts, where full class **membership is unknown **but **at least one member is vested** (conditions fulfilled and could receive immediately). **Rule of convenience**: if no closing date, class closes when any member is entitled to immediate possession * class includes any members in gestation at closing

Answer 19

Not vested because * beneficiary is unknown, or * beneficiary is subject to a condition precedent that has not yet occurred * e.g. "then to B if B survives A" Modern trend: interest may typically be transfered, devised, or descended even prior to vesting.

Answer 20

* Possessor of a life estate. * Rights: * possession * all rents and profits * exploit minerals if authorized or must to maintain * right to lease, sell or mortgage (for duration of life) * Duties: * pay all ordinary taxes and interest on mortgage * if the property is not producing income, responsible for interest and taxes to the extent of reasonable rental value * avoidt waste (so far as property income allows)

Answer 21

Holder of a remainder. During life estate, right to * enter * inspect * seek injunction for waste * Responsible for mortgage principle.

Answer 22

Vested remainder subject to **condition subsequent**. * e.g. "on A's death to B, but if B predeceases A, to C"

Answer 23

* Broker has fiduciary duties * usually agent of seller * most states prohibit dual agents * in some states, merely a **transaction facilitator** * usually entitled to commission on procurement of ready, willing, and able buyer * rights vests when contract executed _or_ conditions of contract are fulfilled * minority: if buyer defaults, no commission

Answer 24

* parties * property description * terms of price and payment

Answer 25

* liability only based on contract provisions * timing of closing not of the essense unles contract so states * but breaching party liable for incidental loss (tax, interest) * **implied covenant of marketable title** _at closing_ * **implied warrantly of fitness/suitabiity** (new homes) * statute of frauds applies (_may_ be rescinded orally) * specific performance available to both parties

Answer 26

1. deed stage * begins at closing * liability only on **deed** warranties * doctrine of merger: covenants under the contract are merged into the deed and cannot be enforced unless also in deed

Answer 27

Seller asserts use of adequate materials and good workmanship * covers latent defects (buyer has duty to inspect) * runs to both initial purchaser and subsequent ones * suit must be brought within reasonable time * time might begin to run before sale! * may be disclaimed * "as-is" not specific enough * damages: usually cost of compliance * substantial defects might be remedied with difference between value as is and warrantied value

Answer 28

Every land sale **contract** has an implied covenant of marketable title * may contract otherwise * defects: * unquieted adverse possession title * future interest holders have not agreed to the transfers * private encumberance (mortgage, covenant, easement) * zoning violations * significant physical defect or encroachment * lack of access to property * remedies: rescision, price adjustment * Buyer must give time to cure

Answer 29

Majority: seller must disclose all known **material physical** defects to the buyer that are **not readily known/observeable**. * material: substantially affect the value of the residence, impact health/safety, or affect desirability * remedies: rescision, damages \*\* some states only impose on commercial sellers \*\*\* failure to disclose may also be grounds for liability in **fraudulent concealment** or **misrepresentation** * _"as is" language not enough to protect seller_

Answer 30

Between contract and closing, equitable title passes to buyer. * seller has duty of upkeep of property * seller has legal title and right to possess * buyer has authority to grant easements * buyer has risk of loss * unless due to seller's intentional or negligent acts * minority - Uniform Vendor and Purchaser Risk Act keeps with seller * if seller has casualty insurance, usually must credit it against price * in case of death. for purposes of distribution * seller's interesit treated as personal property * buyer's interest treated as real property

Answer 31

A document that conveys to the lender (mortgagee) an interest in real property as security for the performance of an act, either by the mortgagor or another. * majority - lien theory: mortgagee is treated as holding a lien * minority - title theory: mortgagee holds title until mortgagor satisfies debt Subject to recordings act \*\* mortgagor does not have not sign the promissory note that the mortgage secures

Answer 32

Mortgage alternative. Borrower converys title to 3rd party who will deliver title to him on payment of note, or sell the land on default.

Answer 33

Seller retains title until buyer makes final payment. * common law: seller keeps all payments and retake possession if buyer defaults * some states treat as mortgage: seller must foreclose * some states require buyer to have equitable right of **redemption** * some states require restitution to buyer if seller retakes possession on default

Answer 34

Real property sold then leased back to seller, usually for long period of time with option to repurchase * might be treated as a security interest * factors: * equivalency of lease payment * fair market retail value * likelihood of exercise of right to repurchase

Answer 35

Mortgagor generally remains personally liable on transfer * secondarily liable if transferee assumes the mortgage * if transferee's obligation is modified by lender, original mortgagee is released; discharged from personal liability * mortgagee is discharged if lender impairs mortgage * some jurisdictions: personal liability diminished in proportion to value impaired * May include a "due on sale"/due on encumberance clause * full amount due on transfer, or lender may permit transferee to assume (usually with an "assumption fee" * not federally enforceable for residential properties in some types of devise/descent transfers

Answer 36

At default, * mortgagee must give notice * prior to sale, mortgagor can redeem property and gain title * all states permits judicially supervised public sale * half: private sale ok if mortgage had power of sale clause * proceeds applied: 1. costs of sale 2. balance and interest of foreclosed obligation 3. junior interests 4. debtor * terminates junior interests in property

Answer 37

Mortgage to secure a line of credit. * if payment required, FAM has priority over all payments even with notice of subsequent mortgagees * if payment is optional, FAM only has priority over payments made before notice of subsequent mortgageee * modern trend: all future advances have priority over subsequent mortgages

Answer 38

A court may compel the holder of a senior mortgage on one property and other properties may require that holder to first foreclose other properties over which it has the sole security interest, in order to protect the junior creditors on a property. **Inverse order rule**: if there are junior interests on multiple properties that the mortgagee has priority in, he must foreclose in order of recency of the interests.

Answer 39

In most jurisdictions, mortgagor is also personally liable on the note. * may bring an action against personal liability before foreclosing * in some jurisdictions, may also pursue personal liability after foreclosure if sale is not sufficient * usually not if sale was private

Answer 40

Equitable remedy whereby a person who completely discharges a mortgage obligation of another becomes the owner of the mortgage. * often granted where subrogee was under legal duty to pay off or does so to protect own interests

Answer 41

Where mortgagee and mortgagor's interests are both acquired by the same 3rd party, they merge into a fee simple. * 3d R: no merger for mortgages

Answer 42

* consideration paid; grantor cannot revoke * does not terminate on death of grantor * counteroffers _do not_ constitute rejection * must exercise option pursuant to terms * mailbox rule does not apply - must be recieved within specified period * RAP does not apply to current tenant's option * minority: doesn't apply to options in commercial contracts \*\* is an encumberance on marketable title

Answer 43

Purchaser who purchases **without notice** of prior interest will prevail. Look for statutory language: * "in good faith" * "without notice"

Answer 44

Purchaser who **records first** prevails. (Minority of jurisdictions)

Answer 45

Subsequent purchaser will prevail only if **lacks notice** of prior interest _and_ **records first**.

Answer 46

Establish priorities among conflicting interests (all types) in property * only protects those who paid value for interest * **mortgagees**: "paid value" unless mortgage was acquired _after_ loan was given * **judgment creditors**: only protected against subsequent claims * purchaser at judicial sale is protected against all claims * **donees/heirs/devisees**: _not_ protected against prior claims * unless receiving from bona fide purchaser - then sheltered by BFP's status

Answer 47

Where a grantor conveys land by warranty deed prior to actually owning it, estopped from later denying validity of deed. * when grantor does acquire title, automatically transfers to grantee * subsequent purchasers from grantor _can still_ acquire title in race-notice jurisdictions * even a recorded deed prior to date of actual title will not put subsequent purchasers on notice

Answer 48

**Present covenants **(only enforceable by initial purchaser) 1. seisen: grantor owns the land 2. right to convey: grantor has right to transfer 3. against encumberances: no undisclosed encumberances **Future covenants **(run with the land) 1. quiet enjoyment: protection against subsequent title claims * only liable if the title claims are valid 2. warranty: protection against subsequent encroachment 3. further assurances: assurance to pass title if later deemed invalid * (some jurisdictions)

Answer 49

Tangible personal property incorporated into real property * once incorporated, not subject to separate security interest * PMSI has 20 days after good becomes fixture to record to maintain priority * presumed to remain with property on sale * reasonable person standard * importance to the property/custom design * damage by removal *

Answer 50

Created in writing compliant with statute of frauds * even express easements noted on deed are lost by merger of the underlying properties * even express easements that are not recorded on deed are unenforceable against bona fide purchaser without notice

Answer 51

Created where property is virtually useless (landlocked) without benefit of easement * both properties must have once been under common ownership * necessity must have arisen at time the properties were severed * no need of showing of prior use/quasi easment at the time! * contrast with easement by implication

Answer 52

Where an an earlier owner had easement. Prior use must have been: * continuous * open and obvious * **reasonably necessary** for dominant's estate's use and enjoyment **Quasi-use**: where both estates had the same owner at the time of the prior use **recorded plat**: owner purchased lot in a subdivision and the subdivision map indicated that roads would exist

Answer 53

Similar to adverse possession. Use must have been: * continuous * actual * open * hostile * for statutory period (20 years at common law) * _need not_** **be exclusive Scope limited by nature and extent of use.

Answer 54

Where servient estate's **permission** creates **good faith, reasonable, detrimental reliance**.

Answer 55

* easements * licenses * profits * water rights * emblements

Answer 56

**Release**: express writing compliant with statute of frauds **Merger**: if estates are acquired in fee by one owner **Abandonment**: affirmative action to abandon easement * mere words and/or inaction not enough * unless detrimental reliance **Prescription**: holder fails to protect for statutory period **Sale**: to bona fide purchaser without notice

Answer 57

May be enforced on subsequent owners where: * **writing** compliant with statute of frauds * exception: **implied reciprocal servitudes** * **intent** (look for circumstances or explicit language) * **touch & concern**: benefit or burden affects promisee and promisor _as landowners, not merely individuals_ * courts reluctant to find for this prong * covenant to maintain insurance will usually be upheld * modern: presume valid unless conflict with public policy, unreasonable restraint on alienation, or unconscionable * notice (under recording act): actual or constructive * privity: * horizontal privity (shared property interest) at time of original covenant required for burden to run * vertical privity: * **burden** runs where successor holds entire interest in servient estate held by original * **benefit** runs where successor holds at least some portion

Answer 58

Land covenants enforced at equity 1. must be intent for both the benefit and burden to run to successors in interest 2. touches and concerns the land 3. actual, record, or inquiry notice No need to show privity, but limited to damages in equity \*\*\* contrast with real covenant where money damages can be due - may enforce a promise under both theories

Answer 59

1. intent to create servitude on **all plots** in subdivision 2. servitude must be negative (promise to refrain) 3. actual, record, or inquiry notice **Changed circumstances**: defense that it no longer makes sense to enforce due to drastic changes in the surrounding area * change in zoning

Answer 60

Where the seller of real estate finances part of the purchase price * does not constitute a PMSI - _not a secured interest_ * does not have priority over recorded mortgages or other recorded liens

Answer 61

**Equitable right of redemption**: **after foreclosure** and **prior to sale**, mortgagor can pay the full purchase price and interest to gain title to the property. * mortgagee measures that clog the right of redemptio will often not be upheld by courts **Statutory redemption**: some jurisdictions provide **by statute** additional time after sale where mortgagor can redeem the property.

Answer 62

A means used to terminate a property use that was permissably in existence at the time of the zoning change, but is not permitted under the new zoning.

Answer 63

Adverse possession involves acquiring title to property due to one's open and notorious use of the land and actual and continuous possession of the land without the owner's permission for the statutory period. Note: The statute of limitations does not run against a future interest holder until his interest becomes possessory.

Answer 64

An equitable conversion occurs when parties sign a contract for the sale of land. Upon signing the contract, the parties' interests switch in that the buyer gains a real estate interest and the seller gains a personal property interest.

Answer 65

An implied warranty contained in a contract for the sale of land guarantees that the seller will provide title that is reasonably free from doubt at closing. Defects in the chain of title can destroy marketable title, as can encumbrances like mortgages, easements, covenants, or encroachments on the land. Note: Zoning restrictions do not make title unmarketable.

Answer 66

The buyer must give reasonable time for the seller to cure, but if title is still not marketable, the buyer can: - Rescind the contract - Demand specific performance with abatement of the sale price - Sue for damages - Quiet title

Answer 67

The warranty of fitness or quality only applies to new constructions.

Answer 68

The seller is liable for any undiscovered defects that diminish the value of the property that were the result of fraud, active concealment, or failure to disclose.

Answer 69

A seller must disclose any serious defect that he knows about or has reason to know about that is not readily apparent to the buyer.

Answer 70

A deed is a document that transfers title. A deed must: 1. Be in writing 2. Contain the signature of the grantor 3. Reasonably identify the parties and the land Note: A deed is not effective until it is delivered.

Answer 71

The intent of the grantor, as opposed to physical possession of the deed, ultimately controls. Title passes once a grantor delivers a deed with the intent that the recipient retain title. Note: Once a deed has been delivered, giving the deed back would do nothing to impact the passage of title.

Answer 72

- Seisen - Right to convey - Against encumbrances - Quiet enjoyment - Warranty - Further assurances

Answer 73

The covenant of seisen guarantees that the grantor has title to and possession of the estate he conveys to the grantee at the time of the conveyance.

Answer 74

The right to convey warrants that the grantor has the authority to make the conveyance to the grantee. Note: The grantor need only have title of the land for purposes of this covenant.

Answer 75

The covenant against encumbrances is a guarantee that there are no physical encumbrances to the estate or encumbrances to the title of the estate.

Answer 76

The covenant of quiet enjoyment and covenant of warranty are identical. Both gaurantee that the grantee will not be disturbed by a third party's claim to title. If the grantee's possession is disturbed by a third party, the grantor warrants that he will defend the suit.

Answer 77

The covenant for further assurances gaurantees that the grantor will take reasonable action to perfect title.

Answer 78

Estoppel by deed involves the conveyance of an estate, by warranty deed, that the grantor does not yet own; however, when the grantor does acquire the estate, estoppel by deed serves to convey the property to the grantee.

Answer 79

Recording acts protect bona fide purchasers who do not have knowledge of prior unrecorded deeds from the claims of a prior grantee under that deed.

Answer 80

A bona fide purchaser (BFP) who records trumps someone with an earlier interest, where the BFP had no notice of the prior interest, provided that the person with the earlier interest also failed to record.

Answer 81

A purchaser who does not have notice of prior interests at the time of the conveyance and who pays valuable consideration is a bona fide purchaser. Note: Recording statutes protect a BFP's interest.

Answer 82

A person who takes interest in land from a BFP will prevail against any competing claim over which the BFP would have prevailed, regardless of notice.

Answer 83

A debtor gives a deed of trust to a third party who holds it so that in the event of foreclosure, the lender can instruct the trustee to sell.

Answer 84

Jurisdictions following the lien theory of property ownership consider the mortgagor to be the owner and mortgagee to merely hold a security interest in the property.

Answer 85

Jurisdictions that follow the title theory of property ownership consider a mortgage to transfer title to the mortgagee.

Answer 86

The seller must provide the buyer with marketable title at the date of closing. In installment land contracts, the seller must provide the buyer with marketable title at the date when delivery is to occur. Until such date, the buyer cannot seek rescission or withhold payment unless it is impossible for the seller to cure any defects.

Answer 87

- If there is no delivery, title does not pass - If there is delivery and no recording, title passes at that moment - If there is delivery and the deed states that title will not pass until the grantor's death, it creates a future estate in the grantee and life estate in the grantor

Answer 88

A statutory special warranty deed is a deed where state law mandates that the grantor provide assurances that: 1. The estate was not previously conveyed to another third party 2. The estate is free from encumbrances attributable to the grantor