real property commonly tested MEE issues

Question 1

Under common law, a grantor can convey only those rights that the grantor had at the time of the conveyance. Thus, common law follows the first-in-time first-in-right principle. All states have recording statutes that change the results of the common law principle.
• There are three kinds of recording statutes:

Notice Statute

Race notice statute

Pure race statute

Answer 1

1. Notice statutes protect subsequent bonafide purchasers for value who take without notice of the earlier transaction. (E.g., “A conveyance of interest in land is not valid against any subsequent purchaser for value without notice unless it is recorded.”)
2. Race-notice statutes protect subsequent bona fide purchasers for value who take without notice and are the first to record. (E.g., “No conveyance of an interest in land is valid against any subsequent purchaser for value without notice unless it is first recorded.”)
3. Pure race statutes protect subsequent purchasers who are first to record.(These are rare!)

Question 2

when does a novation occur?

Answer 2

A novation occurs if the initial mortgagor, the new transferee, and the mortgagee all agree that the mortgagor is no longer liable and the transferee assumes all of the mortgagor’s duties.

Question 3

A tenant can sue for constructive eviction (commercial or residential) if the tenant can prove:

Answer 3

1. the landlord breached a duty to the tenant (e.g., the duty to repair) and this breach caused a loss of substantial use and enjoyment of the premises, and
2. the tenant vacated the premises within a reasonable time and
3. gives landlord adequate notice

Question 4

how is constructive eviction different than implied warranty of habitability?

Answer 4

constructive eviction is different than the implied warranty of habitability which is breached only in a residential lease if the premises are uninhabitable.

If this occurs, the tenant has several remedies including vacating the premises, suing for damages, offsetting damages, etc.

Question 5

What is an encumbrance?

Answer 5

An encumbrance is “some outstanding right or interest in a third party which does not totally negate the title which the deed purports to convey.”

Question 6

warranty of habitability

CL:

modern

Answer 6

under CL, no warranty of habitability

modern: Today, it is generally true that a builder of a new home impliedly warrants to the buyer that the home is habitable and fit for its intended purposes. This implied warranty allows a buyer to recover damages for losses resulting from defective construction or construction that was not done in a workmanlike manner

Question 7

Contract of sale: Before a deed is delivered, the contract of sale is signed. Under equitable conversion, as soon as the contract is signed (but before closing), the buyer’s interest is?

And the seller’s interest is?

Thus, the risk of loss remains on the _______ under equitable conversion, even if the seller remains in possession and control of the land

Answer 7

buyer’s interest is real property (the land he contracted to buy) and

the seller’s interest is personal property (money he will get from the sale).

risk remains on the buyer

Question 8

Validity of a deed: To be valid, a deed must

Answer 8

-identify the buyer and the seller,
-describe the land,
-contain words denoting a present intent to convey, and -be signed by the grantor.
It must also be delivered. Delivery is a question of intent to pass title presently

Question 9

quitclaim deed

any recourse?

Answer 9

Quitclaim deed: The grantor gives no covenants (promises nothing) and the grantee gets whatever the grantor has. The grantee takes the land subject to a defect in the title, an undisclosed easement, or other problem, and has no recourse.

Question 10

Warranty Deed
**SEC FEW

recourse?

Answer 10

Warranty deed: The grantor gives six covenants—three present covenants and three future covenants. The MEE tends to test present covenants rather than future covenants.
The present covenants include (mnemonic=PRESENT): the right to convey, the covenant of seisen (both of these essentially meaning that the seller guarantees he owns the land he is selling), and the covenant against encumbrances (“no encumbrances”—i.e., there are no existing easements, liens, or encumbrances that are not stated in the deed).

Future covenants include (mnemonic=FEW): further assurances, quiet enjoyment, and warranty. Under common law, remote grantees can sue only under future (not present) covenants. However, note in your answer that some jurisdictions do not follow the common law rule

Question 11

Doctrine of merger: land sale contract and closing date

Answer 11

Merger: on the closing date, the contract for sale merges into the deed, so at that point, the buyer can only sue on the deed

Question 12

General rule:

Answer 12

General rule: A mortgagor (homeowner) can transfer title to the property. However, the mortgage will remain on the property and the mortgagor is still personally liable on the note. Generally, a new transferee who takes the land “subject to” the mortgage is not personally liable. However, if the transferee “assumes” the mortgage, he is personally liable along with the original mortgagor. (Some jurisdictions say that if the transferee pays the mortgage payments, he impliedly assumes the mortgage.