Real Property (TX) Flashcards
CONCURRENT OWNERSHIP
CONCURRENT OWNERSHIP
TX has ABOLISHED common-law joint tenancy.
Default is tenancy in common.
But CAN create a RIGHT OF SURVIVORSHIP by agreement (has same effect as CL joint tenancy).
ADVERSE POSSESSION
Basic elements?
ADVERSE POSSESSION
Unique WORDING, but same basic elements:
“ACTUAL AND VISIBLE appropriation of real property that is begun and continued under a CLAIM OF RIGHT inconsistent with and HOSTILE to the claim of another”
- INTENT*
- T must intend to APPROPRIATE THE LAND AS HIS OWN
ADVERSE POSSESSION
DISABILITIES
ADVERSE POSSESSION
DISABILITIES
- Toll for a MAX of 25 years
- Minor
- Unsound mind
- Armed forces during time of WAR
ADVERSE POSSESSION
What are the three statutes and their SOL’s?
BARE POSSESSION - 10 years
DEFECTIVE DEED AND PAYING TAXES - 5 years
COLOR OF TITLE - 3 years
ADVERSE POSSESSION
BARE POSSESSION
BARE POSSESSION - 10 years
- Limited to 160 acres UNLESS:
- Fenced in a larger area
- Entered land under color of title (a DEED) that describes more
ADVERSE POSSESSION
DEFECTIVE DEED AND PAYING TAXES
DEFECTIVE DEED AND PAYING TAXES - 5 years
- Properly recorded deed that is otherwise defective
ADVERSE POSSESSION
COLOR OF TITLE
COLOR OF TITLE - 3 years
- Basically perfect, recorded deed with very narrow defects—difficult to establish
ROL during executory period
ROL during executory period
- The party in POSSESSION (usually seller) bears ROL
- Per the Uniform Vendor and Purchaser Risk Act
CONSTRUING DEEDS
“Strips and gores doctrine”
Alterations
“Strips and gores doctrine”
- Unless a contrary intent appears in the deed, all conveyances of land that are bordered by a public road or railroad include fee to the center of the road
- EXCEPTIONS:
- Grantor owns the land on both sides of the strip
- The strip is larger, more valuable than the conveyed tract
Alterations
- Alteration after execution has NO EFFECT on the deed—doesn’t void the title, or change the deed’s terms. Read as if the alteration never happened.
WARRANTIES
New construction
Re-sale
WARRANTIES
New construction
- Warranty of good workmanship
- Quality construction
- CAN waive, but ONLY IF replaced with some other express warranty
- Warranty of habitability
- Suitable for human habitation
- CANNOT waive
Re-sale
- Must disclose known, un-obvious defects
- TX has a disclosure form in the Property Code that sellers fill out
WARRANTIES
Present covenants in a deed
Present covenants in a deed
- If the deed says “grants” or “conveys”
(1) Covenant against encumbrances
(2) No prior conveyances
RECORDING
To record a deed in TX, the deed must be:
RECORDING
To record a deed in TX, the deed must be signed AND:
- Notarized
OR
- Signed by two witnesses
RECORDING
Protected by the act?
- Judgment creditors
- Quitclaim deed
- BFP of a void deed
RECORDING
Judgment creditors are considered BFP’s, protected by the recording act.
Quitclaim
- Grantee is deemed on NOTICE of any defects in the chain of title
- So, the grantee of a quitclaim deed CANNOT be a BFP and benefit from the recording act.
- Even a BFP without notice will LOSE if the deed was FRAUDULENT (void).
SECURITY INTERESTS
Deed of trust (most common in TX):
SECURITY INTERESTS
Deed of trust (most common in TX)
- Non-judicial foreclosure
- Grantor conveys property to a Grantee. But the Grantor gets to live on the property until Grantee exercises a right of non-judicial foreclosure (when Grantor doesn’t pay off the debt).
- Trustee, usually closely associate with the Grantee (Bank), holds the real estate in trust until Grantor (the debtor) pays off the debt.
SECURITY INTERESTS
Secondary mortgage
Equitable mortgage
Secondary mortgage
- Secured by the “equity” (FMV of property > the debt) remaining after the FIRST mortgage
- Owner can take out a SECOND mortgage secured by the equity
Equitable mortgage
- I owe you some money. Here’s a deed to some land—you promise to re-convey it back to me once I pay you what I owe.
SECURITY INTERESTS
Contract for deed (installment contract)
Contract for deed (installment contract)
- Statutory protections for RESIDENCES
- Default notices should be delivered by registered mail
- Buyer has 30 days to CURE
- If default AFTER paying 40% or 48 monthly pmts, seller may not enforce remedy of possession or acceleration
- Rescission
- Seller has the option to rescind—must pay the buyer back for payments made during the contract (total unwinding of the K)
SECURITY INTERESTS
Vendor’s lien
- What is it?
- How does it arise?
- What special remedies are available?
Vendor’s lien
- Lien in favor of the seller, secures unpaid portion of the purchase price
- Usually noted on the DEED to give vendor superior title against future CR’s
- Implied lien arises by OPERATION OF LAW, even if not noted on the deed—but then, it’s only effective against the purchaser, not future CR’s (no superior title)
- Special remedies—vendor’s options:
- Sue for the balance due and foreclose
- Rescind the K—retake possession
- Sue to recover title (and possession)
- Only the FIRST option is available if not notated on the deed
NON-JUDICIAL FORECLOSURE
SOL =
NON-JUDICIAL FORECLOSURE
SOL = 4 years
- Toll during automatic stay in BK
NON-JUDICIAL FORECLOSURE
What are the three main steps?
NON-JUDICIAL FORECLOSURE
(1) NOTICE OF DEFAULT - 20 days
(2) NOTICE OF SALE - 21 days
(3) SALE
NON-JUDICIAL FORECLOSURE
(1) NOTICE OF DEFAULT
NON-JUDICIAL FORECLOSURE
(1) NOTICE OF DEFAULT - 20 days
DR receives notice of default with reasonable time to cure—20 days minimum
- Certified mail, return receipt requested
NON-JUDICIAL FORECLOSURE
(2) NOTICE OF SALE
NON-JUDICIAL FORECLOSURE
(2) NOTICE OF SALE - 21 days
- Date, time, place (usually steps of the county courthouse) of the sale
- Where:
- SEND certified mail to DR(s)
- FILE with county clerk
- POST at courthouse door
* JUNIOR INTERESTS are NOT entitled to notice of a non-judicial foreclosure.
NON-JUDICIAL FORECLOSURE
(3) SALE
NON-JUDICIAL FORECLOSURE
(3) SALE
- First Tuesday of the month
- Between 10:00am and 4:00pm — can’t be more than 3 hours later than time specified
* Sold AS IS — NO IMPLIED WARRANTIES
NON-JUDICIAL FORECLOSURE
DEFICIENCY
DEFICIENCY
- If the foreclosure sale doesn’t pay off the entire debt, the foreclosing party can sue the DR for the deficiency.
- (TX): Deficiency = FMV - Foreclosure sale price
- The foreclosing party does NOT get to subtract the sale price from the original contract price. This protects debtors whose homes have decreased dramatically in value. They aren’t expected to pay a huge deficiency based on the price of the house when they bought it (likely before the housing mkt crash).
MML
File suit where?
File at same time as or before underlying debt?
PROCEDURE
- Since it’s a judicial foreclosure, must file in DISTRICT COURT
- Must sue on the underlying debt at the same time, or the lien disappears
