Flashcards in Real Property Deck (99):
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
RAP: Charity Exception: When does it apply?
Applies only if the property goes from charity to charity
Right of Re-Entry: Main element P must satisfy
File an action for ejectment
RAP: Right of First Refusal
If granted to heirs and assigns --> RAP violation
If granted to ascertainable, individual person(s) --> OK
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)
Duration of Lease: Commercial v. Residential
Commercial Lease - 1 yr
Rez Lease - month to month
• 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
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"
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
Land Sale Contracts: Equitable Conversion
• 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)
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
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
Adverse Possession: Disability
Tolls the statutory period only if the disability existed at the time the adverse possession began (no tolling during the middle)
Difference between Adverse Possession and Prescriptive Easement
Don't need "exclusivity" for a prescriptive easement
Is there such a thing as seasonal adverse possession?
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
General Warranty Deed: Discuss the Covenants (6)
Present Covenants - if breached, occurs at closing; don't run w/ the land
2. Right to Convey
Future Covenants - run w/ the land
1. Quiet Enjoyment
2. General Warranty
3. Further Assurances
Buyer buys the property "as is"
Covenant of Quiet Enjoyment
Grantor indemnifies grantee against claims of title brought by third parties
• Covenant of General Warranty is similar
Covenant of Further Assurances
Grantor will take necessary measures to perfect the grantee's title
Purchase Money Mortgage
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
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
Key language in statute suggesting that the jurisdiction is a race-notice jurisdiction?
"record first"; "recorded first"
If you buy property from a BFP, you assume BFP status
Land Sale Contract: When does ownership transfer?
Date of closing
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
When may a lienholder exercise a right to redemption?
Only AFTER a foreclosure sale
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
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
Absolute Restraint Against Alienation
• Rule of Construction
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
• 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)
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
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
Open Mines Doctrine: Rule + Examples
A life tenant may continue operating existing activities that have occurred on the property
• excavating property
• harvesting trees
Fee Simple Determinable:
• 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)
Fee Simple Subject to a Condition Subsequent
• Future interest
Language: "To A, but if X, grantor reserves right to reentry"
Future Interest: Right of Reentry
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
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.
Fee Simple Subject to an Executory Interest
• Future Interest
Language: "To A, but if X, then to B"
Future Interest: Shifting executory interest (third party)
• Future Interest
Language: "To A for life" ; "To A for the life of B"
• Reversion (grantor)
• Remainder (third party)
Tenancy in Common: What result if there are irreconcilable differences between the tenants?
Partition the land into separate tracts
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)
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
• 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
• 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
An interest in land (usually in writing) that allows the easement holder to go onto the land of another
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)
Terminating an Easement: Abandonment
Easement holder must make an affirmative act that shows an intent to abandon
• mere non-use isn't sufficient
Which easements are never in writing?
1. Easement by prescription
Use someone else's land (usually for coming and going)
Adverse Possession v. Prescription: Key Difference
No exclusivity req't for an easement by prescription
• may share use w/ the owner
Adverse Possession: Elements (4)
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)
Covenant: Burden Running with the Land: Elements (5)
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)
Common Development Scheme: Covenants
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)
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!
Valid Deed: Elements (4)
2. Description of land and parties
• otherwise lack of definiteness
• exception - subject matter of property is clear
3. Intent AND
4. Grantor's signature
Land Sale Contracts: Escrow Period
• 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
Free and clear of all encumbrances
• liens, mortgages, dowery, licenses, easements, etc.
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.
• 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.
Exception to the Trade Fixtures Doctrine
Accession - a structural addition to the real property
• balcony, deck, loft
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)
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
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
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
Common Development Scheme: Does compliance with zoning ordinances excuse non-compliance with a restrict covenant?
No - both must be complied with
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
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
Waste Doctrine: Encumbrances: Life Tenant v. Holder of Future Interest
Life Tenant: Pay INTEREST on any encumbrance
Revisioners/Remainderman: Pay the PRINCIPAL
• 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)
• Streamwater (from an artificial flow)
Easement in Gross
• 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!"
• 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)
Affirmative Easement: Creation
Covenant: Benefit Running With the Land (4)
• Touch and Concern
• Vertical Privity
Definition: A promise that equity will enforce against successors (injunctive relief)
• avoids hardships associated w/ covenants (flexible!)
• Touch and Concern
Abolishing the Rule Against Destructibility
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
When is a deed void?
Void: set aside regardless of whether conveyed to BFP
• Fraud in the Factum
• No Delivery
• 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
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)
Can you cancel the delivery of a deed?
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
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
Taking possession of the interest is subject to a condition precedent
• it vests once the condition precedent is satisfied
• 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)
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
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
Subject to creditor's claims
May pass by will (holder dies)
May pass via intestate succession (holder dies)
May pass inter vivos (during holder's lifetime)
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
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
Known person + no condition precedent
1. Indefeasibly vested remainder
2. Vested remainder subject to complete defeasance
3. Vested remainder subject to open
Unknown person OR condition precedent OR both
Indefeasibly vested remainder
N'SYNC Member: no strings/conditioned attached
Vested remainder subject to complete defeasance
Strings attached: a condition subsequent may cut short a remainderman's right to possession
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)
When is a deed voidable?
1. Executed by a minor or incapacitated person OR
2. Obtained by
• Undue Influence
• Fraud in the inducement
• Breach of fiduciary duty
Rule - a voidable deed is set aside only if property not conveyed to a BFP
At common law, what result if the will beneficiary died before the testator?
Gift to beneficiary was VOID