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MBE: Final Review > Real Property > Flashcards

Flashcards in Real Property Deck (99):
1

What future interests are subject to the RAP?

1. Contingent remainders
2. Executory interests
3. Certain vested remainders subject to open (class gift)
4. Option contracts to buy land in the future
• exception - options connected to leaseholds

2

RAP: Charity Exception: When does it apply?

Applies only if the property goes from charity to charity

3

Right of Re-Entry: Main element P must satisfy

File an action for ejectment

4

RAP: Right of First Refusal

If granted to heirs and assigns --> RAP violation

If granted to ascertainable, individual person(s) --> OK

5

Joint Tenancy: What can a joint tenant do w/ his share?

Joint tenant can do whatever he wants with his share of the property. But that destroys the joint tenancy b/c he's acting alone (so the transferee takes as a tenancy in common, NOT a joint tenant)

6

Duration of Lease: Commercial v. Residential

Commercial Lease - 1 yr
Rez Lease - month to month

7

Landlord-Tenant: Assignment
• Definition + Liability for Rent

Definition: Tenant transfers possession of the premises for the remaining balance of the lease

Rule: Tenant (privity of contract) and assignee (privity of estate) are jointly severally liable for rent

8

Restrictive Covenants: Common Development Scheme and New Buyers

Common Development Scheme: A new buyer is subject to a restrictive covenant that was in the original deeds if they had notice of the restrictive covenant

note - aka "implied equitable servitude"

9

Fixtures: Test for Removal: Rez v. Commercial

Residential - test to determine whether a tenant may remove the fixture:
1. Nature of the chattel (heirloom? toilet?)
2. Tenant's intent when he attached the fixture AND
3. Extent of damage to real property if removed

Commercial - trade fixtures doctrine: tenant may remove all trade fixtures prior to the lease expiring

10

Land Sale Contracts: Equitable Conversion
• Rule
• Implication: Who bears risk of loss?
• Implication: Rights (affixed?)

Upon signing the land sale contract, the buyer is the equitable owner of the property:

• bears risk of loss if property is damaged or destroyed during escrow period (seller still gets full contract price)

• once parties enter into a valid land sale contract, the rights of the parties are affixed in stone (so buyer must buy and the seller must sell) - both may demand specific performance (even their estate if one dies)

11

Land Sale Contracts: Marketable Title: Old Adage

If seller can't convey good and marketable title at closing, the buyer doesn't have to buy a lawsuit
• but estopped from making this argument AFTER closing

12

Land Sale Contracts: Adverse Possession

To sell property you acquire via adverse possession, you must first file quiet title action (confirm ownership) to show you acquired ownership via adverse possession --> marketable title
• otherwise the buyer doesn't have to buy a lawsuit

13

Adverse Possession: Disability

Tolls the statutory period only if the disability existed at the time the adverse possession began (no tolling during the middle)

14

Difference between Adverse Possession and Prescriptive Easement

Don't need "exclusivity" for a prescriptive easement

15

Is there such a thing as seasonal adverse possession?

Yes

16

Land Sale Contract: Title Defect: What will the court do?

de minimums title defect --> adjust price to reflect defect

major title defect --> rescind the deal

17

General Warranty Deed: Discuss the Covenants (6)

Present Covenants - if breached, occurs at closing; don't run w/ the land
1. Seisin
2. Right to Convey
3. Encumbrances

Future Covenants - run w/ the land
1. Quiet Enjoyment
2. General Warranty
3. Further Assurances

18

Quitclaim Deed

Buyer buys the property "as is"

19

Covenant of Quiet Enjoyment

Grantor indemnifies grantee against claims of title brought by third parties
• Covenant of General Warranty is similar

20

Covenant of Further Assurances

Grantor will take necessary measures to perfect the grantee's title

21

Purchase Money Mortgage
• Definition
• Rule
• Exception

Definition: Mortgage given to a third party lender (bank) who lends funds to the mortgagor (borrower) to allow him to buy property

Rule: holder of this mortgage is superior to all other non-purchase money mortgages (even those recorded before the purchase money mortgage)

Exception: the purchase money mortgage wasn't recorded

22

Buyer of Mortgaged Property

Buyer takes the property "subject to the mortgage" (aka never assumes a mortgage, so not personally liable unless buyer agrees to assume the mortgage)
• but somebody better pay otherwise the creditor can still foreclose and render you homeless

23

Key language in statute suggesting that the jurisdiction is a race-notice jurisdiction?

"record first"; "recorded first"

24

Shelter Rule

If you buy property from a BFP, you assume BFP status

25

Land Sale Contract: When does ownership transfer?

Date of closing

26

Foreclosure Sale: Senior vs. Junior Lender: Priority

1. Proceeds goes first to senior lender/foreclosing party

2 Residuary goes to junior encumbrancers via priority
• but foreclosing must give notice to everyone to the right (otherwise, junior interest stays on property and reduces how much the property sells for at the foreclosure sale). That means the security interests of all parties to the right of foreclosing party remain on the property

27

When may a lienholder exercise a right to redemption?

Only AFTER a foreclosure sale

28

Foreclosure Sale: Multiple Lenders: Priority

1. Foreclosing party (give notice to everyone to the right)
2. All parties to the RIGHT of it on graph

Note - all liens to the LEFT remain on the property, and the new owner takes the property subject to them

29

Water Rights: Two Doctrines

1. Riperian Doctrine (majority)
• domestic/natural use > commercial or agricultural use

2. Prior Appropriations (minority)
• first in time, first in right

30

Absolute Restraint Against Alienation
• Definition
• Rule of Construction
• Effect

An absolute restriction on the free alienability of the property

Rule of Construction: construed narrowly

Effect: Cut off the invalid part of the conveyance, but maintain the rest of the grant

Ex: "I give my house in the city to my son, but if he ever tries to sell it while he is alive, I want it taken away from him and given to my grandson

31

Life Estate
•  What can life tenants do?
• What can't life tenants do?

A life tenant can do whatever they want their life estate
• any encumbrance created by the life tenant, once the life tenant dies, the encumbrance dies as well
• can't commit waste (if you do, life tenancy ends)

32

Life estate pur utrie: Rules (2)

Life tenant conveys away their life estate to someone else
• when the tenant dies, the holder of the life estate pur utrie must exit the property

Whoever has present possessory interest in the property has to pay the property taxes

33

Life Tenant: Demolishing Existing Structures
• Rule + Exception

Rule: Life tenant can't remove existing structures, even if it would make the property more valuable

Exception: Changed conditions have rendered the property uninhabitable

34

Open Mines Doctrine: Rule + Examples

A life tenant may continue operating existing activities that have occurred on the property
• excavating property
• harvesting trees

35

Fee Simple Determinable:
• Language
• Basic Rule on Transfer

Language: "so long as, until, while"

Rule: If you're the holder of a possibility of a reverter or a right of reentry, you can transfer/sell those rights (they are freely alienable)

36

Fee Simple Subject to a Condition Subsequent
• Language
• Future interest

Language: "To A, but if X, grantor reserves right to reentry"

Future Interest: Right of Reentry

37

Class Gift Created By Will: What result if a class member dies before the testator?

That person drops out of the class, but the remaining members will take their share

38

What result when any member of a class is entitled to the property?

The class closes and we distribute the property right then and there.

39

Fee Simple Subject to an Executory Interest
• Language
• Future Interest

Language: "To A, but if X, then to B"

Future Interest: Shifting executory interest (third party)

40

Life Estate
• Language
• Future Interest

Language: "To A for life" ; "To A for the life of B"

Future Interest
• Reversion (grantor)
• Remainder (third party)

41

Tenancy in Common: What result if there are irreconcilable differences between the tenants?

Partition the land into separate tracts

42

Joint Tenancy: Severance/Termination: "SPAM"

1. Sale: A joint tenant unilaterally transfers all or part of its in the joint tenancy

2. Partition in kind

3. Mortgage (title theory v. lien theory)

43

Landlord-Tenant Law: Latent Defects
• Rule + Exception

Rule: Landlords are not liable for latent (hidden) defects unless landlord knew or had reason to know of those defects

Exception: If you are dealing with a short term lease of furnished premises, then landlords are liable for latent defects, even if they didn't know about them

44

Holdover Tenant:
• Definition
• Analytical Framework: Three Key Steps

Arises when a tenant who has stayed beyond the expiration of the lease

Step 1 - Landlord may impose a periodic tenancy

Step 2 - Duration of tenancy depends on what type of lease
• Residential lease --> periodic month-to-month
• Commercial lease --> period of the previous lease, but may not exceed 1 yr (b/c of SoF)

Step 3 - Was the tenant notified of the rent increase prior to the lease expiring?
• if yes --> pay the new rent
• if not --> pay the old rent

45

License
• Definition
• Revocability Rule
• Extinguishment Rule

Definition: mere permission to enter another's land

Rule: Revocable at anytime, even if you paid value for it

Extinguished if original grantee tries to transfer to third party

46

Easement

An interest in land (usually in writing) that allows the easement holder to go onto the land of another

47

Terminating an Easement: Merger (2)

Both parcels of land must be:
1. Under common ownership
2. Owned in the same manner (i.e, both fee simple)

48

Terminating an Easement: Abandonment

Easement holder must make an affirmative act that shows an intent to abandon
• mere non-use isn't sufficient

49

Which easements are never in writing?

1. Easement by prescription
2. Necessity

50

Easement: Prescription

Use someone else's land (usually for coming and going)
• open
• notoriously
• continuously
• adversely

51

Adverse Possession v. Prescription: Key Difference

No exclusivity req't for an easement by prescription
• may share use w/ the owner

52

Adverse Possession: Elements (4)

"COAH"

1. Continuously (throughout statutory period)
2. Openly and notoriously (puts true owner on notice)
3. Actual and exclusive (can't share use w/ true owner)
4. Hostile

53

Covenant: Burden Running with the Land: Elements (5)

"WITHN"

1. Writing
2. Intent (grantor)
3. Touches and concerns the land
- how the land is to be used (b/c landowners at law)
4. Horizontal and vertical privity
5. Notice (actual or constructive)

54

Common Development Scheme: Covenants
• Definition

Arise when you have a large parcel of land being subdivided into smaller parcels, and upon each parcel is a restrictive covenant (usually rez development kind)

55

How do you void a restrictive covenant created w/in a common development scheme?

Changed conditions have made the property unusable for all of the parcels in that common development scheme
• so it's all or nothing!

56

Valid Deed: Elements (4)

1. Writing

2. Description of land and parties
• otherwise lack of definiteness
• exception - subject matter of property is clear

3. Intent AND

4. Grantor's signature

57

Land Sale Contracts: Escrow Period
• Definition
• Legal Implicatation

Time period b/t signing the land sale contract and possession
• buyer is equitable owner of the property, so buyer bears risk of loss

58

Marketable Title

Free and clear of all encumbrances
• liens, mortgages, dowery, licenses, easements, etc.

59

Marketable Title: Can a seller earmark a portion of the sale price in order to erase any encumbrances at time?

Yes! Seller may use the proceeds from the land sale contract to clear the title before being conveyed.

60

Fixtures
• Definition
• Analytical Approach: Removing Fixtures

Definition: A chattel that becomes attached to the real property

Analysis: What type of property?

• Rez - how much damage will the real property suffer if the fixture is removed? More damages --> less likely to remove

• Commercial - trade fixtures doctrine: prior to the expiration of a commercial lease, a commercial tenant can remove all trade fixtures.

61

Exception to the Trade Fixtures Doctrine

Accession - a structural addition to the real property
• balcony, deck, loft

62

Mortgage: Multiple Creditors: Analytical Framework
• Three Steps
• Three Rules

Step 1 - Diagram the creditors from left to right on a horizontal timeline

Step 2 - Circle the foreclosing party

Step 3 - The foreclosing party must give notice to all parties to the right

Priority Rule - first to the foreclosing party, then to all the parties to the right

Rule - all mortgages to the left of the foreclosing party remain with the property (but the buyer isn't personally liable to those creditors on the left, so buyer takes subject to the land)

Rule - if proceeds from foreclosure sale aren't enough to pay off the parties to the right, those creditors have to sue the debtor personally (but that sucks b/c debtor is broke)

63

Taking Subject to a Mortgage v. Assuming a Mortgage: Third-Party Liability

Subject to mortgage --> third party is not personally liable
• but not free and clear, b/c if creditor doesn't get paid, they can foreclose and sell the property out from underneath you
• note - the original buyer is personally liable

Assuming mortgage --> third party is personally liable

64

What must an adverse possessor do to obtain marketable title?

1. Satisfy elements of adverse possession

2. File suit to quiet title in a court of equity
• if judge agrees --> stamp deed --> marketable title

65

Lateral and Subjacent Support Doctrine
• Basic Rule
• Damages Rule: Standard of Review (2)

A landowner has the right to have their land supported laterally (sides) and subjacently (underneath) by their neighbors

Context: Your land has buildings. Your neighbor begins excavating, which causes subsidence on your land

• Neighbor is strictly liable IF the excavation would have caused subsidence even if your land was in its natural state

• But IF your buildings had an affect on whether your land would have collapsed, you must prove your neighbor was negligent in excavating his land

note - notice of the excavation, and no objection, doesn't preclude recovery

66

Common Development Scheme: Does compliance with zoning ordinances excuse non-compliance with a restrict covenant?

No - both must be complied with

67

What result if a land sales contract doesn't specify the quality of title, but the buyer accepts the deed?

Doctrine of Merger - the land sale contract is merged w/ the deed, so any contract provisions for quality of title (express or implied) are no longer effective

68

Landlord-Tenant: Partial Condemnation

Landlord-Tenant relationship continues
• Tenant must pay entire rent for remainder of lease
• Tenant may share in condemnation award to the extent it affects his rights under the lease

69

Waste Doctrine: Encumbrances: Life Tenant v. Holder of Future Interest

Life Tenant: Pay INTEREST on any encumbrance

Revisioners/Remainderman: Pay the PRINCIPAL

70

Negative Easements
• Definition
• Rule
• Types (4)

Definition: Holder may prevent the servient landowner from doing something that would otherwise be permissible

Rule: Created only expressly (writing signed by grantor)

"LASS"
• Light
• Air
• Support
• Streamwater (from an artificial flow)

71

Easement in Gross
• Definition
• Classic Examples (2)
• Transferability Rule

Definition: "It Takes One": gives holder some personal or pecuinary advantage that's not related to his use or enjoyment of his land
• servient tenement --> burdened
• dominent tenement --> no benefit

Ex: Swim in someone's pond; billboard on another's lot

Rule: Not transferable unless for commercial purpose
• "It's not personal, it's biz!"

72

Easement Appurtenant
• Definition
• Classic Example
• Transferability Rule

Definition: "It Takes Two" - benefits the holder in his physical use or enjoyment of his property
• dominent tenement --> benefitted
• servient tenement --> burdened

Ex: Right of Way

Rule: Automatically transferable w/ the dominant tenement (regardless of whether it's mentioned in conveyance)

73

Affirmative Easement: Creation

"PING"

• Prescription
• Implication
• Necessity
• Grant

74

Covenant: Benefit Running With the Land (4)

"WITV"

• Writing
• Intent
• Touch and Concern
• Vertical Privity

75

Equitable Servitude
• Definition
• Creation

Definition: A promise that equity will enforce against successors (injunctive relief)
• avoids hardships associated w/ covenants (flexible!)

"WITNES"
• Writing
• Intent
• Touch and Concern
• Notice

76

Abolishing the Rule Against Destructibility
• Context
• Rule

Context: Grantor creates a life estate in grantee, and a contingent remainder in a third party's heirs

Rule: Grantor's reversion kicks in, and would give way to a springing executory interest in the third party's heirs

77

When is a deed void?

Void: set aside regardless of whether conveyed to BFP
• Fraud in the Factum
• Forged
• No Delivery

78

Profit
• Definition
• Transferability Rule
• Termination (2)

Non-possessory interest in land that allows the grantee to remove resources of land (i.e., fish and game; minerals)

Transferable from the original grantee to a third party

Termination:
• Abandonment
• Misuse

79

Joint Tenancy
• Definition
• Creation

Definition: An estate b/t two or more co-tenants who have a right of survivorship

Creation: Requires four unities: "T-TIP"
1. Time (interest vest at the same time)

2. Title (interests acquired by same instrument)

3. Interest (same type and duration) AND

4. Possession (identical rights to enjoyment)

80

Can you cancel the delivery of a deed?

No

81

Life Tenant: General Rules

1. Entitled to all ordinary uses and profits on the land, including encumbering his own interest
• but can't lawfully do anything that would injure the remaindermen's interest

2. Must pay the interest on any encumbrances to the extent of the income and profits on the land (or reasonable rental value). Remainderman are responsible for the principal
• exception: if the encumbrance is only on the life estate, life tenant is responsible for the interest and principal

82

Adverse Possession: Constructive Possession of Part of Land

Sufficient to obtain title ONLY IF there is reasonable proportion b/t the part actually possessed and the whole tract
• landscaping over a few ft is INSUFFICIENT

83

Contingent Remainder

Taking possession of the interest is subject to a condition precedent
• it vests once the condition precedent is satisfied

84

Joint Tenancy
• Effect if Tenant Dies
• Acceptance: Relation Back

Tenant Dies: her interest is freed (evaporates), and the co-tenants retain an undivided right in the property

Relation Back: Acceptance relates back to the date of delivery of the deed in escrow
• exception - won't relate back if it would defeat the rights of intervening third parties (i.e., defeating right of survivorship)

85

Joint Tenancy: Severance: Mortgage: Title Theory v. Lien Theory

Title (minority): actual transfer of title to the property
• a mortgage by one joint tenant transfers the legal title of the joint tenant to the mortgagee/creditor/lender
- this severs the joint tenancy

Lien (majority): mortgage is a lien on the title
• a mortgage by one joint tenant doesn't itself sever the joint tenancy: that only happens once default and foreclosure proceedings have completed

86

Tenancy in Common
• Key Feature
• Other Features
• Creditor's Claims?

Only "unity" is possession: each tenant is entitled to possession of the whole estate

Freely alienable by inter vivos and testamentary transfer
Inheritable

Subject to creditor's claims

87

Devisable

May pass by will (holder dies)

88

Descendible

May pass via intestate succession (holder dies)

89

Alienable

May pass inter vivos (during holder's lifetime)

90

Rule in Shelley's Case

Virtually abolished, so now the result would be:

Grantee gets a life estate, grantee's heirs a contingent remainder, and grantor a reversion

91

Doctrine of Worthier Title

Modern Rule: If a grantor grants a life estate in grantee and a remainder in grantor's heirs, that's the result you would get

92

Vested Remainder
• Definition
• Types

Known person + no condition precedent

1. Indefeasibly vested remainder
2. Vested remainder subject to complete defeasance
3. Vested remainder subject to open

93

Contingent Remainder

Unknown person OR condition precedent OR both

94

Indefeasibly vested remainder

N'SYNC Member: no strings/conditioned attached

95

Vested remainder subject to complete defeasance

Strings attached: a condition subsequent may cut short a remainderman's right to possession

96

Vested remainder subject to open

Vests in a group of takers, at least one of whom is qualified to take, but each class member is subject to partial diminution (meaning additional members can join)

97

When is a deed voidable?

1. Executed by a minor or incapacitated person OR

2. Obtained by
• Duress
• Undue Influence
• Mistake
• Fraud in the inducement
• Breach of fiduciary duty

Rule - a voidable deed is set aside only if property not conveyed to a BFP

98

At common law, what result if the will beneficiary died before the testator?

Gift to beneficiary was VOID

99

Wills: Anti-Lapse Statute

Saves the gift for the predeceasing beneficiary's descendants IF the beneficiary himself is a descendant of the testator