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Bar Prep > 03. Real Property > Flashcards

03. Real Property Flashcards

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1
Q

What are the ways property can be transferred?

A

1) Sale
2) Gift
3) Divise (will; effective when decedent dies)
4) Intestate succession

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2
Q

What is another word for “transferred” in property?

A

Alienated

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3
Q

How are ownership interests divided in real property?

A

In time between present interests and future interests

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4
Q

What is the key distinction in the division of ownership interest of real property?

A

The timing of possession (e.g., who has the right to possess it NOW?)

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5
Q

T or F: Someone must be in possession of property at all times

A

True

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6
Q

What is the largest possessory estate?

A

Fee Simple (or Fee Simple Absolute)

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7
Q

What does the “absolute” mean in “Fee Simple Absolute”?

A

It means that nothing stops the fee simple estate from continuing or passing on

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8
Q

Why is a fee simple estate considered the largest possessory estate?

A

Because it is capable of lasting forever

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9
Q

What does it mean for something to be inheritable?

A

Upon the owner’s death, the owner can pass it by will or be intestate succession; can also be transferred by gift or sale during owner’s life.

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10
Q

What are the “magic words” to create a fee simple estate?

A

“and his/her heirs” (but this is not required, can just be “O to A”)

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11
Q

What happens if a grant of real property is ambiguous?

A

Ig a grant is ambiguous, it creates a fee simple

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12
Q

What is the default estate?

A

Fee simple absolute

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13
Q

Why is fee simple absolute the default estate?

A

There is a presumption that the grantor conveys the most that she has

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14
Q

What effect do precatory words (e.g., “my hope and wish”, words of intent or purpose) have on a conveyange?

A

No effect - if the grantor wishes to make a conveyance, they have the explicitly say it or it won’t count

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15
Q

T or F: There is a future interest associated with a fee simple estate

A

False: Because a fee simple estate is capable of lasting forever (e.g., the big wheel of cheese hasn’t been sliced, diced, or bitten), there is no future interest. If you see something like “O to A, then to B when A dies”, then A got a life estate, not a fee simple.

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16
Q

What are defeasible fees?

A

Interests that may be terminated by the occurrence of an event (but still capable of lasting forever if the event doesn’t happen); in other words, a condition will cut the fee simple short

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17
Q

What is a fee simple determinable?

A

Limited by specific durational language

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18
Q

What are examples of durational language that trigger a fee simple determinable?

A

1) “So long as”
2) “While”
3) “During”

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19
Q

What is a fee simple subject to condition subsequent?

A

Limited by specific conditional language

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20
Q

What are examples of conditional language that trigger a fee simple subject to condition subsequent?

A

1) “But if”
2) “Provided that”
3) “On the condition that”

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21
Q

What is the future interest associated with a fee simple determinable?

A

Possibility of Reverter

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22
Q

What is a Possibility of Reverter?

A

A future interest held by a grantor following a fee simple determinable that invests automatically after the durational period ends

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23
Q

What is the future interest associated with a fee simple subject to condition subsequent?

A

Right of Entry

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24
Q

What is a Right of Entry?

A

A future interest held by the grantor following a fee simple subject to condition subsequent that does NOT vest automatically, but must be reclaimed through a specific action by the grantor

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25
Q

What is a fee simple subject to executory interest?

A

Will end upon the happening of an event and the future interest will vest in a third party (NOT the grantor)

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26
Q

What is the difference between a fee simple subject to condition subsequent and a fee simple subject to executory interest?

A

FSSCS –> future interest = grantor
FSSEI –> future interest = third party

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27
Q

What is an executory interest?

A

A future interest that will cut short or terminate an earlier interest (NOT THE GRANTOR)

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28
Q

What is another term for terminating a prior interest

A

Divest

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29
Q

What is a life estate?

A

A present estate that is limited by life

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30
Q

What words are used to create a life estate?

A

“For Life” (doesn’t have to be the grantor’s life)
NOTE: If ambiguous, look for the grantor’s intent to create an estate that will end upon the death of the measuring life (i.e., To A to live in your house; you can only live in a house while alive, so probably a life estate)

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31
Q

When does a life estate terminate?

A

Ends naturally when the measuring life ends

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32
Q

Is a life estate transferable?

A

Yes!

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33
Q

T or F: A life tenant (measured by the tenant’s life) can pass the property by will

A

False: the life estate ends at the life tenant’s death

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34
Q

What is a reversion?

A

When possession of the land goes back to the grantor after the life estate ends

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35
Q

What is a remainder?

A

When possession of the land goes to a third party after the life estate ends

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36
Q

What is the difference between a reversion and a remainder?

A

Reversion –> possession goes back to grantor
Remainder –> possession goes to third party

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37
Q

What is common between a reversion and a remainder?

A

1) Both follow a life estate
2) Both result in a fee simple

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38
Q

What is waste in terms of real property?

A

Comes into play when more than one party has an interest in the same piece of real property, and a present interest holder’s actions are impacting the future interest’s value.

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39
Q

What are the types of waste?

A

1) Affirmative
2) Permissive
3) Ameliorative

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40
Q

What is affirmative waste?

A

Waste caused by voluntary conduct, which causes a decrease in value

Ex: dumping hazardous waste

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41
Q

What is permissive waste?

A

Waste caused by neglect toward the property, which causes a decrease in value

Ex: not cleaning up after a natural disaster

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42
Q

What is ameliorative waste?

A

Special situation where a life tenant or other person in possession changes the use of the property and actually increases the value of the property

Ex: Renovation of a house, construction of a dam, fixing a fence

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43
Q

In what situations does the doctrine of waste usually apply?

A

1) Landlord v. Tenant
2) Co-tenant out of possession v. tenant in possession (concurrent estates)
3) Mortgagee (bank/lender) v. mortgagor (borrower)

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44
Q

How to spot a waste problem on the bar

A

1) Do multiple parties have simultaneous interests? (e.g., life tenant, remainder, future interests, landlord v. tenant)
2) Is there a change in the value of the property due to the actions/inactions of the party in possession?
3) Will the waste substantially change the interest taken by the party out of possession? (Do I stop or encourage the waste?)

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45
Q

T or F: A remainder cannot follow a vested fee simple

A

True: (Remainders are Patient) A future interest following a vested fee simple would have to divest the prior interest, but a remainder does not function that way because it instead waits for the prior interest to end

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46
Q

What are the two categories of remainders?

A

1) Vested
2) Contingent

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47
Q

T or F: RAP generally applies only to vested remainders

A

False: RAP generally applies only to contingent remainders

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48
Q

What are the two requirements for vested remainders?

A

1) Given to an ascertained grantee
2) Not subject to a condition precedent

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49
Q

What happens if the remainder is either not to an ascertainable grantee or subject to a condition precedent?

A

Then it is a contingent remainder

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50
Q

What happens if the holder of a vested remainder dies?

A

The interest passes to the holder’s heirs

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51
Q

What happens if a contingent remainder does not vest before it becomes possessory?

A

The grantor has a reversion

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52
Q

What is a vested remainder subject to open?

A

1) Vested remainder in a class gift; AND
2) Full class membership is unknown

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53
Q

What happens if no one in the class has vested?

A

The remainder is contingent, NOT vested subject to open

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54
Q

What happens when all members of a class are identified?

A

The class is closed

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55
Q

When is it presumed people may have children in property law?

A

From the time their born until the time they die

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56
Q

T or F: RAP applies to a vested remainder subject to open

A

True

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57
Q

What is the Rule of Convenience?

A

A class-closing mechanism to avoid application of RAP to a class gift

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58
Q

How is the Rule of Convenience applied?

A

If the grant does not have an express closing date, the Rule of Convenience closes the class when any member of the class becomes entitled to immediate possession.

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59
Q

What is the Doctrine of Worthier Title?

A

Prevents against reminders in a grantor’s heirs & creates a presumption of a reversion to the grantor

Ex: Changes “to Anna for life, then to my heirs” into a reversion in O with a life estate for Anna

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60
Q

What is the Rule in Shelley’s Case?

A

Prevents against reminders in a grantee’s heirs & uses the doctrine of merger to create a fee simple

Ex: Changes “to Anna for life, then to Anna’s heirs” to “to Anna”, so Anna has FSA

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61
Q

T or F: Executory interests are not subject to RAP

A

False

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62
Q

What is an executor interest?

A

Future interest that cuts short (i.e., divests) a prior vested interest
(“He’s a jerk!”)

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63
Q

What are the two types of executory interest?

A

1) Springing
2) Shifting

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64
Q

What is a springing executory interest?

A

Divests the grantor

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65
Q

What is a shifting executory interest?

A

Divests a prior grantee

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66
Q

Exam tip for executory interests - count the parties

A

1) 2 parties –> likely springing
2) 3 parties –> likely shifting

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67
Q

What does RAP prevent?

A

Remote vesting

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68
Q

What is RAP testing for?

A

Certainty (operates like a statute of limitations for contingent future interests)

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69
Q

What is the time period for RAP?

A

A life + 21 years (approximately 2 generations)

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70
Q

When are the two times interests can be created?

A

1) Inter vivos transfers = interests created at time of the grant
2) Devise (will) = interests created at testator’s death (NOT when the will is drafted)

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71
Q

Which interests does RAP apply to?

A

1) Contingent remainders
2) Executory interests
3) Class gifts (vested remainders subject to open) if NOT closed by rule of convenience

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72
Q

What is a relevant life (RAP)?

A

Person who affects vesting, usually mentioned or implied by the grant

Ex: prior life tenant, the parent where a conveyance is made to a child

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73
Q

What is a validating life (RAP)?

A

Person who tells us whether or not the interest vests within the perpetuities period (lifetime + 21 years)

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74
Q

What are the requirements for a validating life?

A

1) Must have been alive when the interests were created
2) Can validate own interest
3) If no validating life, then interest is NO GOOD and we strike it from the grant; if there is a validating life, the interest is GOOD

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75
Q

If a portion of a transfer is found to violate the Rule Against Perpetuities, how will courts treat the transfer?

A

The portion of the transfer that violates the rule is void, and the rest is valid.

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76
Q

T or F: If the gift to any member of the class is void under RAP, then the gift is void as to all members of the class

A

True: The gift is all or nothing

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77
Q

What are the exceptions to the “all or nothing” Class Gift rule?

A

1) Transfers of a specific dollar amount to each class member
2) Transfers to a sub-class that vests at a specific time

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78
Q

What are the exceptions to RAP?

A

1) Charities: RAP does not apply to a gift from one charity to another charity
2) Options: RAP does not apply to an option held by a current tenant to purchase a fee interest in the leasehold property OR to an option (or right of first refusal) in a commercial transaction

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79
Q

What is the modern RAP approach?

A

“Wait and See”: Rather than invalidating transfers from the outset under RAP, you wait and see if an interest subject to RAP vests within the perpetuities period (some states have changed the vesting period to 90 years)

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80
Q

What is cy pres?

A

An equitable doctrine (borrowed from the law of trusts) that allows a court to reform a transfer to avoid RAP

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81
Q

What are concurrent estates?

A

Ownership or possession of real property by two or more persons simultaneously

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82
Q

What is the basic rule of concurrent estates?

A

Concurrent owners each have right to use or possess the whole of the property

Exception = concurrent owners can contract out of the basic rule

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83
Q

What are the types of concurrent estates?

A

1) Tenancy in common
2) Joint tenancy
3) Tenancy by the entirety

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84
Q

What is tenancy in common?

A

Concurrent owners have separate but undivided interests in the property with NO right of survivorship.

Default Rule: Any conveyance to more than one person is presumed to be a tenancy in common

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85
Q

What is the default concurrent estate?

A

A tenancy in common

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86
Q

What does it mean if a concurrent estate has no right of survivorship?

A

Each co-tenant can transfer the property freely at death as well as during life

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87
Q

What type of concurrent estate generally will not have a right of survivorship?

A

Tenancy in common

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88
Q

What is the defining characteristic of a joint tenancy?

A

The right of survivorship, whereby the surviving joint tenant(s) automatically take the deceased tenant’s interest

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89
Q

Oliver conveys Blackacre “to Anna and Ben as joint tenants with a right of survivorship.” Anna dies in a tragic hunting accident. Anna’s will leaves everything to her daughter Amy. Who owns Blackacre?

A

Ben, who takes under the right of survivorship (which trumps Anna’s will).

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90
Q

How do you create a joint tenancy?

A

1) Grantor must make a clear expression of intent; PLUS
2) Must be survivorship language

Ex: “as joint tenants with a right of survivorship”

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91
Q

What is needed to create a joint tenancy?

A

The four unities

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92
Q

What are the four unities?

A

PITT or T-TIP
1) P: Possession = Every join tenant has an equal right to possess the whole of the property
2) I: Interest = Joint tenants must have an equal share of the same type of interest
3) T: Time = Joint tenants must receive their interests at the same time
4) T: Title = Joint tenants must receive their interests in the same instrument of title

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93
Q

What happens if one of the unities is lost?

A

The joint tenancy is severed and becomes a tenancy in common

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94
Q

T or F: Transfer during life of a joint tenancy will not sever the right of survivorship

A

False: the transfer will sever/destroy the right of survivorship and convert the estate into a tenancy in common

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95
Q

What happens if only one of more than two joint tenants conveys their interest in an inter vivos transfer?

A

This does NOT destroy the joint tenancy of the remaining joint tenants.

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96
Q

What happens if a tenant of a joint tenancy has a lien and then dies?

A

Any lien against a joint tenant’s interest terminates upon that tenant’s death, so the surviving tenants’ interests are not encumbered

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97
Q

A joint tenant grants a mortgage interest in the joint tenancy to a creditor. Does the mortgage sever the joint tenancy?

A

Majority = Lien Theory –> mortgage treated like a lien and does NOT destroy joint tenancy
Minority = Title Theory –> mortgage severs title and the tenancy between the joint tenants and the creditor is converted into a tenancy in common

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98
Q

A joint tenant leases her share in the property to a tenant. Does the lease sever the joint tenancy?

A

Jurisdictions are split!
- Some jurisdictions hold that the lease severs the joint tenancy
- Other jurisdictions treat the lease as a temporary suspension of the joint tenancy

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99
Q

What is a tenancy by the entirety?

A

A joint tenancy between spouses

A joint tenancy with a 5th unity of marriage

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100
Q

T or F: Tenants by the entirety cannot alienate or encumber their shares without the consent of their spouse

A

True

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101
Q

How do you convey a tenancy by the entirety?

A

Property conveyed “as tenants by the entirety, with a right of survivorship”

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102
Q

What happens if a grant of tenancy by the entirety is ambiguous?

A

Courts presume property is held as joint tenants or as tenants in common

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103
Q

What is the general rule for possession and use of concurrent owners?

A

Each co-tenant has right to possess all of the property, regardless of that co-tenant’s share and regardless of the type of co-tenancy.

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104
Q

Does one co-tenant owe the other a duty to pay rent?

A

No, a co-tenant in possession is not require to pay rent to co-tenants out of possession

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105
Q

What is an ouster?

A

Co-tenant in possession denies another co-tenant access to the property

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106
Q

What must a party show to claim ouster?

A

You must manifest an intent to possess the property and be denied access (e.g., one tenant changes the locks or throws out the co-tenant’s stuff)

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107
Q

What are remedies for the ousted tenant?

A

1) Get an injunction granting access to the property; and/or
2) Recover damages for the value of the use while the co-tenant was unable to access the property

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108
Q

How is rent divided among concurrent owners?

A

Rent received from a third party’s possession of the property, minus operating expenses, are divided based on ownership interests on each co-tenant

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109
Q

Anna and Ben own Blackacre as tenants in common. Anna has a 10% interest and Ben has a 90% interest in Blackacre. Carmen is renting Blackacre for $1,000 a month. How much is Anna and Ben each entitled to?

A

Anna = $100 (10% of $1,000)
Ben = $900 (90% of $1,000)

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110
Q

What are operating expenses?

A

Necessary charges, such as taxes or mortgage payments

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111
Q

How are operating expenses divided between co-owners?

A

Based on ownership interest of each co-tenant

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112
Q

What happens if a co-tenant pays more of her share of the operating expenses?

A

A co-tenant can collect contributions from the other co-tenants for payments in excess of her share of the operating expenses

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113
Q

What happens if a co-tenant pays for necessary repairs?

A

There is no right to reimbursement from co-tenants for necessary repairs, but they can get credit in partition action.

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114
Q

What happens if a co-tenant pays for improvements?

A

There is no right to reimbursement from co-tenants for improvements, but they can get credit in partition action.

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115
Q

What is a partition?

A

An equitable remedy available to all holders of tenancy in common or joint tenancy (unilateral right) to divide the property into distinct portions.
NOTE: This is NOT available for tenants by the entirety

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116
Q

What are the two types of partitions?

A

1) Partition in kind (physical division)
2) Partition by sale

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117
Q

What type of partition is preferred by the court?

A

Partition in kind

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118
Q

When will a court order a partition by sale?

A

If the physical partition is:
1) Not practical (e.g., land has complicated terrain); OR
2) Not fair to all parties

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119
Q

How are proceeds from a partition by sale divided?

A

Proceeds from a partition by sale are divided among the co-tenants based on their ownership interests.

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120
Q

Anna and Ben own a condo unit as tenants in common, each with a 50% share in the property. Anna sues for partition. What kind of partition will the court order?

A

A partition by sale, because a physical partition is not feasible.

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121
Q

Can co-tenants agree not to partition?

A

Yes; such agreements are enforceable, as long as they are:
1) clear; and
2) the time limitation is reasonable

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122
Q

What does the FHA do?

A

The Fair Housing Act (FHA) prohibits discrimination in the:
1) Sale;
2) Rental; AND
3) Financing
of dwellings (homes, apartments, etc.)
It also prohibits advertising that states a discriminatory preference

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123
Q

Who is the primary focus of the FHA?

A

Multi-family residential housing

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124
Q

What are the 3 exemptions from the FHA?

A

1) Single-family housing that is sold or rented without a broker
2) Owner-occupied buildings with 4 or fewer living units
3) Religious organizations and private clubs

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125
Q

What are the protected traits under the FHA?

A

1) Race
2) Color
3) Religion
4) National Origin
5) Sex (includes orientation & gender identity)
6) Disability
7) Familial Status (families w/ children under 18 or someone pregnant)

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126
Q

When may a landlord treat someone differently under the FHA?

A

When providing reasonable accommodations for persons with disabilities (e.g., ramp, elevator, etc).

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127
Q

What is prohibited under the FHA?

A

Based on a protected trait:
1) Refusing to rent, sell, or finance a dwelling;
2) Requiring different rents;
3) Falsely denying that a unit is available;
4) Providing different services to facilities; OR
5) Stating a discriminatory preference in an advertisement

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128
Q

What intent is allowed in FHA cases?

A

1) Disparate Treatment (intent)
2) Disparate Impact (effect)

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129
Q

What must be shown in an FHA case?

A

That the prohibited behavior is linked to the protected trait (causal nexus)

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130
Q

What is the default controlling law in property?

A

Law of the Situs = controlling law is based on where the property is located

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131
Q

When does law of the situs not control?

A

1) If the instrument in question designates an applicable jurisdiction
2) Marriage: the domicile of the party may override, specifically with respect to classifying property as marital or separate
3) Mortgage: mortgage documents require repayment to be made in another state

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132
Q

What types of interests are created by a lease?

A

1) Contract
2) Property

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133
Q

What are the 4 tenancies that govern the landlord-tenant relationship?

A

1) Tenancy for years
2) Periodic tenancy
3) Tenancy at will
4) Tenancy at sufferance

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134
Q

What is a tenancy for years?

A

Measured by a fixed and ascertainable amount of time (doesn’t have to be in years)

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135
Q

What is required to create a tenancy for years?

A

1) An agreement by the landlord and the tenant (purpose = demonstrate the intent to create a leasehold)
2) IF longer than 1 year, then the agreement must be signed and in writing (Statute of Frauds)

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136
Q

How is a tenancy for years terminated?

A

1) At the end of the term = automatic (no notice needed)
2) Before the end of the term = tenant surrenders the lease OR the tenant or landlord commits a material breach

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137
Q

What is a periodic tenancy?

A

Estate that is repetitive and ongoing for a set period of time (e.g., month-to-month, year-to-year) that renews automatically at the end of each period until one party gives proper notice of termination

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138
Q

What is required to create a periodic tenancy?

A

Parties must intent to create a periodic tenancy, which can be express (e.g., a signed lease) or implied (e.g., payment of rent)

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139
Q

How is a periodic tenancy terminated?

A
  • Renews automatically until proper notice is given
  • OLD: in a year-to-year, need at least 6 month notice
  • NEW: most states lowered to month’s notice
  • Proper Notice = terminating party gives notice before the start of what will be the last term
  • Most jurisdictions require written notice of termination
  • Notice is effective on the last day of the period
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140
Q

What is a tenancy at will?

A

May be terminated by either landlord or tenant at any time, for any reason

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141
Q

What is required to create a tenancy at will created?

A

Can be created by express agreement or by implication

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142
Q

How is a tenancy at will terminated?

A

Can be terminated by either party without notice
- If the agreement gives only the landlord the right to terminate at will, the tenant also gets the right to terminate by implication
- If the agreement gives only the tenant the right to terminate at will, the landlord is NOT given the right to terminate at will
- If the landlord or tenant dies, the tenancy at will terminates (NOT true for tenancy for years or periodic tenancy)

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143
Q

What is a tenancy at sufferance?

A
  • Created when a tenant holds over after the lease has ended
  • A temporary tenancy that exists before the landlord either:
    1) evicts the prior tenant OR
    2) re-rents the property to the tenant (creates a new tenancy with the holdover tenant)
  • Tenant owes the landlord reasonable value of the daily use, as well as reasonably foreseeable special damages
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144
Q

What is required to create a tenancy at sufferance?

A

Created by actions of the tenant alone

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145
Q

What is the difference between a tenancy at will and a tenancy at sufferance?

A
  • Tenancy at will: Created by agreement of the landlord and tenant (meeting of the minds)
  • Tenancy at sufferance: Created by actions of the tenant alone
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146
Q

How is a tenancy at sufferance terminated?

A

1) Tenant voluntarily leaves;
2) Landlord evicts tenant; OR
3) Landlord re-rents to the tenant

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147
Q

What are the tenants 2 basic duties?

A

1) Pay rent
2) Avoid waste

148
Q

Where does the duty to pay rent arise from?

A

The contractual relationship between landlord and tenant (i.e., the lease requires it; consideration)

149
Q

What are the 3 situations where the duty to pay rent is supsended?

A

1) Premises are destroyed, so long as the tenant didn’t cause the damage
2) The landlord completely or partially evicts the tenant
3) The landlord materially breaches the lease

150
Q

What is complete eviction?

A

Removal of tenant from the entire property

151
Q

What is partial eviction?

A

Removal of tenant from a portion of the property

152
Q

What are the 2 implied warranties landlords must uphold?

A

1) Implied covenant of quiet enjoyment
2) Implied warranty of habitability

153
Q

What types of properties does the implied covenant of quiet enjoyment apply to?

A

Both commercial and residential

154
Q

What types of properties does the implied warrant of habitability apply to?

A

Residential ONLY

155
Q

What is the implied covenant of quiet enjoyment?

A

The tenant can withhold rent when the landlord takes actions that make the premises wholly or substantially unsuitable for the intended purposes, and the tenant is constructively evicted

156
Q

What are the elements of constructive eviction?

A

1) Premises were unusable for their intended purposes (i.e., breach of the covenant of quiet enjoyment);
2) The tenant notifies the landlord of the problem;
3) The landlord does not correct the problem; AND
4) The tenant vacates the premises after a reasonable amount of time has passed

157
Q

What is the implied warranty of habitability?

A

The landlord has an obligation to maintain the property such that it is suitable for residential use.

158
Q

What conditions are of primary concern with regard to the implied warranty of habitability?

A

1) Tenant’s health
2) Tenant’s safety

159
Q

T or F: A tenant may waive habitability protection

A

False: The tenant cannot waive habitability protection

160
Q

What may constitute evidence of a breach of the implied warranty of habitability?

A

The landlord’s failure to comply with applicable housing codes

161
Q

What options does a tenant have if the premises are not habitable?

A

1) Refuse to pay rent;
2) Remedy the defect and offset costs against the rent; OR
3) Defend against eviction

162
Q

What must a tenant do if they choose to withhold rent for a breach of the implied warranty of habitability?

A

1) Notify the landlord of the problem; AND
2) Give the landlord reasonable opportunity to correct the problem

163
Q

T or F: The implied warranty of habitability requires the tenant to vacate the premises after notifying the landlord of defects and waiting a reasonable amount of time

A

False: Unlike quiet enjoyment and constructive eviction, IWH does not require the tenant to vacate the premises

164
Q

Must the duty to avoid waste be expressed in the lease?

A

No; the duty to avoid waste is a background rule that does not have to be expressed in a lease in order to apply

165
Q

What is the duty to avoid waste?

A

The tenant has a duty not to commit affirmative (voluntary) waste or permissive (neglectful) waste

166
Q

How may landlords handle ameliorative waste?

A

Landlord’s usually require permission before a tenant can make improvements or changes to the property, even those that increase the property’s value (ameliorative waste). A landlord can also put a provision in the lease prohibiting the tenant from making improvements to the property.

167
Q

What is the duty to repair?

A

In a residential lease, the landlord is presumed to be responsible for repairs. The tenant must notify the landlord of any needed repairs.

NOTE: The landlord is NOT responsible to make repairs caused by the tenant’s actions (though they likely will & charge the tenant)
NOTE: In a commercial lease, the landlord can place the duty to repair on the tenant

168
Q

If the tenant abandons the property early or is evicted by the landlord, does the landlord have an obligation to mitigate damages by re-renting the property?

A
  • Majority Rule: The landlord must make reasonable efforts to re-rent the property
  • Minority Rule: The landlord does NOT have to mitigate damages (more common in commercial leases)
169
Q

Under the majority rule for the duty to mitigate damages, what would reasonable efforts to re-rent a property entail?

A

Treat the leasehold as if it was vacant stock (advertise & show like the rest, but don’t have to do something special)

170
Q

What happens if the landlord doesn’t make diligent efforts to re-rent after abandonment or eviction (Majority Rule)?

A

The tenant is relieved from the obligation to continue paying rent

171
Q

What is the landlord entitled to if he does make diligent efforts to mitigate damages (Majority Rule)?

A

The difference between the original rent and the rent received from the replacement tenant

172
Q

T or F: The landlord does not have to accept an unacceptable replacement tenant when mitigating damages

A

True

173
Q

What type of relationship is established if a landlord accepts rent from a holdover tenant?

A

A new periodic tenancy

174
Q

Can a landlord increase rent?

A

Yes, the landlord can impose a higher rent if the landlord had informed the tenant of the increase before the expiration of the old lease.

175
Q

What is the duty to deliver possession?

A
  • Majority Rule: The landlord must deliver actual possession
  • Minority Rule: The landlord need only deliver legal possession
176
Q

How is quiet enjoyment violated?

A

When the landlord, or someone connected to the landlord, renders the premises unsuitable for the intended purpose.

177
Q

What must the landlord control in order to ensure quiet enjoyment?

A

1) Common areas (e.g., lobby, hallway, laundry room, etc.)
2) Nuisance-like behavior of other tenants

178
Q

What does a landlord NOT have to control?

A

Off-premises actions of third parties that are beyond the landlord’s control (e.g., noisy bar across the street)

179
Q

If a tenant complains about conditions, what can a landlord NOT do?

A

Retaliate by evicting the tenant

180
Q

In a residential lease, how must the landlord maintain the premises?

A

Habitable

181
Q

Who does the tenant owe a duty of care to?

A

1) Invitees
2) Licensees
3) Foreseeable trespassers

182
Q

What is the landlord’s duty of care under common law?

A

1) Responsible in negligence for latent (hidden) defects about which the tenant has not been warned;
2) Responsible for faulty repairs completed by the landlord or the landlord’s agent negligently;
3) Responsible for negligence that causes injuries in common areas of the property

183
Q

What is the landlord’s duty of care under the modern trend?

A

A general duty of reasonable care

184
Q

What is an assignment?

A

A complete transfer of the tenant’s remaining term

185
Q

What is a sublease?

A

A transfer for less than the entire duration of the lease

186
Q

What type of transfer is it if the tenant retains a reversionary interest in the leasehold?

A

A sublease

187
Q

What are the 2 types of privity in leaseholds?

A

1) Contract
2) Estate

188
Q

How can a landlord collect rent if there has been a transfer?

A

There needs to be either privity of contract or privity of estate.

189
Q

Who can a landlord collect rent from in an assignment?

A

1) Tenant (contract & estate)
2) Subtenant (estate)

190
Q

Who can a landlord collect rent from in a sublease?

A

Only the tenant (contract & estate), because the subtenant only has privity with the tenant.

191
Q

What happens if the lease is silent on the issue of assignment or sublease?

A

A tenant may assign or sublet freely

192
Q

What happens if the lease requires the landlord’s permission to transfer, but is silent on the applicable standard?

A
  • Majority Rule: A landlord may deny permission to a transfer only for a commercially reasonable reason
  • Minority Rule: A landlord may deny permission at her discretion
193
Q

Does a landlord need a tenant’s permission to transfer the landlord’s interest to a new landlord?

A

No; but the new landlord is bound by the terms of the existing lease

194
Q

Who is a listing agent?

A

The agent who assists the seller in promoting and selling the property

195
Q

Who is the broker?

A

Sometimes the real estate agent, it’s the intermediary between buyer and seller

196
Q

Who is a seller’s agent?

A

A sub-agent for the listing agent who helps find buyers.

NOTE: In most cases, the listing and seller’s agent share the commission. The agent who shows you property is, in effect, working for the seller

197
Q

Who is the buyer’s agent?

A

The broker who serves as the representative of the buyer; will receive commission similar to seller’s agent fee

198
Q

What is a dual agent?

A

Someone who represents both buyer and seller (many states forbid dual agency as a conflict of interest)

199
Q

What are the 2 stages of land sale contracts?

A

1) Contract stage = where parties negotiate terms
2) Deed stage = where parties transfer property

200
Q

How is liability determined during land sale contracts?

A

By the stage where the breach occurs

201
Q

What happens if a breach occurs in the contract stage of a land sale?

A

Any liability must be based on a contract provision

202
Q

What happens if a breach occurs in the deed stage of a land sale?

A

Any liability must be based on a deed warranty

203
Q

What is the doctrine of merger in land sale contracts?

A

Covenants under the contract are merged into the deed and any remedy will flow from the deed

204
Q

What are the Statute of Frauds requirements for land sale contracts?

A

1) Writing
2) Signed by the party to be charged
3) Include essential terms:
- The parties (i.e., the seller and the buyer)
- Description of the property
- Price and payment info

205
Q

What are the exceptions to the Statute of Frauds requirements for land sale contracts?

A

1) Part performance
2) Detrimental reliance (estoppel)

206
Q

What is required to establish partial performance such that the Statute of Frauds requirements are waived for land sale contracts?

A

Need 2 of the following 3:
1) Payment of all or part of the purchase price;
2) Possession by the purchaser; OR
3) Improvements by the purchaser

NOTE: These acts can be by either the seller or the buyer

207
Q

How may detrimental reliance excuse the Statute of Frauds requirements for land sale contracts?

A

Applies where a party has reasonably relied on the contract and would suffer hardship if the contract were not enforced

208
Q

What covenant is implied in ever land sale contract?

A

Marketable Title

209
Q

What is marketable title?

A

The implied covenant that the title is free from an unreasonable risk of litigation

210
Q

What are examples of defects in title that would render title unmarketable?

A

1) Title acquired by adverse possession that hasn’t been quieted
2) Private encumbrances (e.g., mortgage, covenant, easement)
3) Violation of a zoning ordinance

211
Q

When must a defect in title be cured?

A

Before closing, at which point the contract and deed merge and the deed controls

212
Q

What standard is used in judging whether title is unmarketable?

A

That of a reasonable buyer

213
Q

What is the buyer’s remedy if the seller cannot deliver marketable title?

A

Rescission of the contract

214
Q

Can a buyer rescind a land sale contract upon finding that the title has a racially discriminatory covenant?

A

No; Since the covenant is not enforceable under the FHA or the 14th Amendment, there is no risk of litigation

215
Q

What is the basic rule of timing for land sale contracts?

A

Unless the contract or parties notify, time is NOT of the essence. This means that failure to close on the date set for close may be a breach of the contract, but is not grounds for rescission, as specific performance is still available.

216
Q

What is the implied warranty of fitness or suitability?

A

A builder warranty that applies to defects in new construction.

217
Q

Who is covered under the implied warranty of fitness or suitability?

A
  • Majority: initial homeowner-purchaser & subsequent purchasers
  • Minority: only the original homeowner-purchaser
218
Q

When must suit for breach of the implied warranty of fitness or suitability be brought?

A

Generally must be brought within a reasonable time after discovery of the defect (some jurisdictions have a statutory time period)

219
Q

What is the duty to disclose defects?

A

Most jurisdictions impost a duty on the seller to disclose to the buyer all known, physical, and material defects

220
Q

What types of defects is the duty to disclose defects primarily concerned about?

A

Latent or hidden defects

221
Q

What is a material defect?

A

A defect that substantially affects the value of the home, health, and safety of its occupants, or the desirability of the home

222
Q

Will a general disclaimer satisfy the seller’s duty to disclose?

A

No

223
Q

What is merger in land sale contracts?

A
  • After closing, obligations contained in the contract are merged into the deed
  • If there was something important in the contract that is not in the deed, the cause of action is lost because the deed controls after closing
224
Q

What remedies are available to a seller in the event of buyer breach of a land sale contract?

A

1) Damages = (Contract Price) - (Market Price)
2) Rescission: Seller can sell the property to someone else
3) Specific performance

225
Q

What remedies are available to a buyer in the event of seller breach of a land sale contract?

A

1) Damages = (Contract Price) - (Market Value on Date of Breach)
- NOTE: If seller breached in good faith, buyer can only recover out-of-pocket expenses
2) Rescission: Returns payments to the buyer and cancel the contract
3) Specific performance

226
Q

What choice must buyers and sellers make when selecting remedies?

A

Buyers and sellers must choose between damages and specific performance - they cannot have both remedies

227
Q

Who bears the risk of loss if there is damage to or destruction of the property?

A
  • Majority Rule: The buyer holds equitable title during the period between the execution of the contract and the closing and delivery of the deed
    • Buyer is responsible for any damage to the property that happens during that period
    • As holder of legal title, the holder/buyer has a right to possess the property
  • Minority Rule: Places the risk of loss on the seller until the closing and delivery of deed
228
Q

What are the duties of a life tenant?

A

1) Duty to pay current charges
2) Duty to prevent waste
3) Duty to make ordinary repairs

229
Q

To what extent must a life tenant pay ordinary taxes on real property?

A

To the extent that the life tenant receives a financial benefit

230
Q

How is the financial benefit to a life tenant calculated?

A
  • Occupying = fair market rental value
  • NOT Occupying = income derived from the land
231
Q

How do you acquire title by adverse possession?

A
  • E = Exclusive: physical presence on land not shared with owner
  • C = Continuous: presence is continuous & uninterrupted for statutory period
  • H = Hostile: possession is would owner’s consent
  • O = Open, notorious, & actual: possession is apparent or visible to reasonable owner

“ECHO”

232
Q

What is “estoppel by deed”?

A

A grantor who conveys an interest in land by warranty deed before actually owning it is estopped from later denying the effectiveness of that deed. When the grantor acquires ownership of the land, the after-acquired title is transferred automatically to the prior grantee.

233
Q

What is a vested remainder subject to complete divestment?

A

The occurrence of a subsequent condition will eliminate the remainder interest in a known entity.

234
Q

What is a fixture?

A

Tangible personal property (i.e., chattel) that is:
1) attached to real property in such a manner that it is treated as part of the realty; AND
2) used for some larger component or function of the land (e.g., to separate adjoining properties).

235
Q

What happens to a fixture if the land it’s on is sold?

A

Fixtures are considered an integral part of the land to which they are attached. Consequently, a fixture automatically transfers with the land unless the conveying instrument (e.g., deed) provides otherwise.

236
Q

How can private nuisance liability arise?

A

When a defendant’s interference with the plaintiff’s use and enjoyment of his/her property is both substantial (offensive, annoying, or intolerable to normal person in community) and unreasonable (severity of plaintiff’s harm outweighs utility of defendant’s conduct).

237
Q

When may a tenancy at will be seen as unconscionable?

A

If only one party is expressly given the right to terminate the leasehold, the lease may be deemed unconscionable and both parties will have the ability to terminate it.

238
Q

What is the exoneration-of-liens doctrine?

A

A common law doctrine stating that the recipient of a specific devise of real property can use the remaining assets in the testator’s estate to pay off any encumbrances on that property.

239
Q

What happens to wild, uncultivated crops at the end of a life estate?

A

Wild, uncultivated crops (i.e., fructus naturales) are considered part of the real property on which they grow, and they pass automatically with the land. The prior owner has no right to reenter the land to remove the crops.

240
Q

What happens to planted, cultivated crops at the end of a life estate?

A

These are considered personal property, and pass with the land except when:
1) Harvested (severed from land)
2) Ripe (mature; some courts)
3) Planted by tenant with indefinite leasehold
4) Planted by adverse possessor under claim of right

241
Q

T or F: Delivery of a deed is presumed when it is recorded

A

True

242
Q

How may a real covenant be terminated by abandonment?

A

When an affirmative act (something more than neglect or non-use) shows a clear intent to relinquish the covenant (i.e., destroying a retaining wall that the real covenant concerned)

243
Q

What type of priority does a purchase-money mortgage have?

A

It has super-priority over all other liens, including those that arose before the PMM (regardless of whether the PMM or those liens were recorded)

244
Q

What is the order of lien priority on real property?

A

From highest to lowest priority:
1) Purchase-money mortgages (super-priority over prior liens)
2) First recorded liens (senior priority)
3) All other recorded liens (junior priority)
4) Unrecorded liens (lowest priority)

245
Q

If a jurisdiction treats installment land contracts like mortgages, what right does this give the buyer?

A

The equitable right of redemption (buyer in default may redeem the property by tendering to the owner the full balance due under the contract prior to foreclosure)

246
Q

If a jurisdiction treats installment land contracts like mortgages, what must the seller do if the buyer misses a payment?

A

The seller must foreclose to gain title to the property

247
Q

If a first mortgage was made under duress, may a subsequent buyer who assumes the mortgage raise the defense of duress?

A

No; A buyer who assumes a mortgage is primarily liable for the debt. And if the assumption of the mortgage was part of the purchase price, then the buyer may not raise defenses that the debtor could have raised against enforcement of the mortgage obligation.

248
Q

May a landowner sue the landowner of an adjacent lot for buildings that block natural light?

A

No, this is an old rule from England that has been expressly rejected in the US; Absent a negative easement or statute, a landowner has no legal right to prevent neighbors from blocking his/her land from access to natural light.

249
Q

What are the consequences of a “due on sale” clause in a mortgage?

A

A “due on sale” clause allows a lender to demand full payment of any remaining mortgage debt if the debtor transfers the mortgaged property without the lender’s written consent. If this clause is waived, the debtor remains liable on the note—even after transferring the mortgaged property—until the debtor is released by the lender.

250
Q

What does the doctrine of adverse possession allow a person to do?

A

Acquire good title to a piece of property after unlawful possession

251
Q

What is a person prior to acquiring good title through adverse possession?

A

A trespasser

252
Q

When does title through adverse possession begin once gained?

A

It goes back to the date of the person’s entry on the property

253
Q

T or F: There is no transfer of title from the former owner to the adverse possessor

A

True

254
Q

T or F: Property owned by the government may be adversely possessed after 50 years

A

False; property owned by the government cannot be adversely possessed

255
Q

What are the two basic rationales for adverse possession?

A

1) Punishing the true owner for sleeping on their rights
2) Rewarding the adverse possessor for earning good title

256
Q

What are the three phases of the “continuous” period in adverse possession?

A

1) Entry Phase = when the adverse possessor enters the land; requires to trigger the applicable statute of limitations
2) End Phase = When the statute of limitations runs out of time; now, the adverse possessor is the legal owner of the property by operation of law
3) Middle Phase = When the adverse possessor makes use of the property, between the entry and end phases

257
Q

Is the “continuous” requirement of adverse possession literal?

A

No; seasonal or infrequent use may suffice if the use is consistent with the type of property being possessed (e.g., vacation home, farmland)

258
Q

What is tacking in adverse possession?

A

Joining multiple AP times together to satisfy the statute of limitations

259
Q

When is tacking available in adverse possession?

A

When the current adverse possessor is in privity with the prior adverse possessor

260
Q

What is privity?

A

An exchange of some sort between parties

261
Q

When will the statute of limitations not run against a true owner for adverse possession?

A

If the owner has a disability at the time the adverse possession begins (when trespasser enters the property)

262
Q

What is a disability in adverse possession?

A

“The 3 I’s”:
1) Infancy
2) Insanity
3) Imprisonment

263
Q

How may a true owner interrupt the adverse possession period?

A

By ejecting the adverse possessor (this will stop the AP clock)

264
Q

What does it mean for use to be “open and notorious”?

A

1) Use must be such that it would put a reasonable true owner on notice of the adverse use
2) The use cannot be hidden
3) Trespasser must use the property as if she was the true owner

265
Q

What does is mean for use to be “hostile” in adverse possession?

A

It means that possession of the property must be adverse to the owner’s interest because it is a claim of competing title

266
Q

What are the rules regarding state of mind for hostility in adverse possession?

A

Majority = Ignores the adverse possessor’s state of mind
Minority = Inquires into the AP’s state of mind
- Good Faith = mistake
- Bad Faith = aggressive trespass

267
Q

What does it mean for use to be “exclusive” in adverse possession?

A

An adverse possessor cannot share possession with the true owner

268
Q

What is the general scope of adverse possession?

A

The area actually being possessed

269
Q

What is constructive adverse possession?

A

When an AP enters under color of title from an invalid instrument and occupies a portion of the property, the AP is in actual possession of the occupied land and constructive possession of the remaining land described in the deed.

270
Q

Does adverse possession include sub-surface rights?

A

Yes, unless those rights already belong to a third party

271
Q

What is a deed?

A

A legal instrument that transfers ownership of real property

272
Q

What is needed for a deed to be valid?

A

1) Delivery
2) Acceptance

273
Q

What is the controlling question for delivery of a deed?

A

Whether the grantor had the present intent to transfer the property

NOTE: Physical transfer of a deed is not required & can be done through an agent

274
Q

What is the extend of a broker’s permissible involvement in land sale contracts?

A

They may be involved so long as they don’t practice law. Most states permit real estate agents and brokers to prepare a contract of sale, but not draft a legal document like a deed or mortgage. Look for the exercise of legal discretion and whether the broker or non-lawyer is giving legal advice.

275
Q

What must be contained in a valid deed?

A

1) Identify the parties (i.e., grantor and grantee)
2) Signed by the grantor (per the Statute of Frauds)
3) Include words of transfer (evidence of present intent to transfer)
4) Sufficient description of the property (can be based on physical attributes; extrinsic evidence permissible to clarify)

276
Q

Is the grantee required to sign the deed?

A

No, just the grantor’s signature is required for execution to be effective

277
Q

What is the Equal Dignities Rule?

A

If the agent is required to sign (e.g., execute a deed), then the agency relationship must be created in writing

278
Q

What does it mean to record?

A

Publicly register your deed

279
Q

What is the purpose of recording?

A

Notice

280
Q

Does recording affect the validity of a deed?

A

No; a deed is valid at delivery

281
Q

What is the common-law recording rule?

A

“First in time, first in right”

282
Q

How may a junior mortgage interest be eliminated after a foreclosure if the mortgage is not paid off?

A

Under a judicially supervised sale, the foreclosing mortgagee must give notice to the holders of any junior interests in the property so that they can participate or send a representative - otherwise, the junior interest holder’s interest will remain after the sale.

283
Q

What are some common exceptions to the enforceability of a Due-on-Sale clause affecting residential property?

A

1) Devise, descent, or transfer to joint tenant upon death
2) Transfer to spouse or child
3) Transfer to ex-spouse in divorce
4) Transfer to borrower’s living trust
5) Creation of subordinate lien without occupancy rights
6) Granting leasehold interest of less than 3 years without option to purchase

284
Q

When may an easement holder exceed the scope of the easement’s use?

A

An easement holder may increase the manner, frequency, or intensity of an easement’s use so long as that increase does not unreasonably damage or interfere with the use or enjoyment of the servient estate.

285
Q

What interests do a foreclosure sale eliminate?

A

1) Mortgagor’s property interest
2) Mortgage interest being foreclosed upon
3) Any junior interests attached to the property

286
Q

What is a “wild deed”?

A

A recorded deed that falls outside the chain of title is a “wild deed” that fails to give constructive notice to subsequent purchasers.

287
Q

What is a “due-on-encumbrance” clause?

A

A due-on-encumbrance clause gives the mortgagee the right to accelerate a mortgage obligation—i.e., to demand immediate payment of the full amount of the outstanding loan obligation, including interest—when the mortgagor obtains a second mortgage or otherwise encumbers the property.

288
Q

What happens to judgements obtained against a seller after the execution of the land-sale contract?

A

Under the doctrine of equitable conversion, the judgement is not enforceable against the real property (even if the claim arose before the contract was executed) because the seller only retained legal title, while the buyer obtained equitable title at the time the contract was signed.

289
Q

What happens if a seller cannot convey marketable title?

A

The buyer can rescind the land-sale contract

290
Q

What if the buyer accepts the land with the defect that makes it unmarketable and the seller refuses to perform?

A

The buyer can:
1) rescind the contract and seek restitution;
2) seek specific performance with an abatement of the purchase price; OR
3) sue for damages.

291
Q

What is the doctrine of subrogation?

A

Under the doctrine of subrogation, a third party (subrogee) who pays another’s mortgage loan in full becomes the owner of the loan and the mortgage. The subrogee may therefore seek reimbursement from the debtor or enforce the mortgage.

292
Q

What types of interests are covered by recording acts?

A

1) Deeds
2) Mortgages
3) Leases
4) Options
5) Judgements affecting title
6) Other instruments creating an interest in land, such as easements or covenants

293
Q

What type of interest is NOT covered by recording acts?

A

Adverse possession

294
Q

Who is covered by recording acts?

A

Subsequent purchasers (someone who acquired interest in the land, even if they didn’t pay money)

295
Q

Who is NOT covered by recording acts?

A

Grantees who acquire title by gift, intestacy, or devise

Policy = protect those who make economic investments by acquiring property

296
Q

What are the types of notice?

A

1) Actual
2) Constructive
3) Inquiry

297
Q

What is actual notice?

A

When the subsequent grantee has real, personal knowledge of a prior interest

298
Q

What is constructive notice?

A

When a prior interest is recorded

299
Q

What is inquiry notice?

A

When a reasonable investigation would have disclosed the existence of prior claims

300
Q

What are two common situations where a subsequent grantee will be put on inquiry notice?

A

1) Dude on the land: When there is someone else living on or using the land
2) Mentioned Interest: When there is an interest mentioned in the deed to some other transaction

301
Q

What are the types of recording statutes?

A

1) Race
2) Notice
3) Race-Notice

302
Q

What is the rule for race statutes?

A

First to record wins, even if the subsequent purchaser had notice of a prior, unrecorded conveyance

303
Q

What is the key language for race statutes?

A

“First recorded” or “First to record”

304
Q

What is the rule for notice statutes?

A

A subsequent purchaser wins if she acquires without notice of a prior unrecorded conveyance

305
Q

What is the key language for notice statutes?

A

“In good faith” or “Without notice”

306
Q

What is the rule for race-notice statutes?

A

A subsequent purchaser wins if:
1) Acquired without notice of a prior unrecorded conveyance; AND
2) Records first

307
Q

What is the key language for race-notice statutes?

A

“In good faith” or “Without notice” PLUS “First duly recorded” or “First recorded”

308
Q

What is the shelter rule?

A

A person who takes from a bona fide purchaser protected by the recording act has the same right as her grantor

309
Q

What is estoppel by deed?

A

If a grantor subsequently acquires title to the land, the grantor is estopped from trying to repossess on grounds that he didn’t have title when he made the original conveyance. This arises when a grantor conveys land the grantor does not own.

310
Q

After closing, where must liability arise from?

A

Our of the deed, not the contract (because the contract merged into the deed)

311
Q

What are the types of deeds?

A

1) General warranty deed
2) Special warranty deed
3) Quitclaim deed

312
Q

What does a general warranty deed provide?

A

1) The greatest amount of title protection
2) The grantor warrants title against ALL defects, even if the grantor did not cause the defects

313
Q

What are the implied covenants in the general warranty deed?

A

1) Covenant of seisin
2) Covenant of the right to convey
3) Covenant against encumbrances
4) Covenant of quiet enjoyment
5) Covenant of warranty
6) Covenant of further assurances

314
Q

What are the present covenants of the general warranty deed?

A

1) Covenant of seisin
2) Covenant of the right to convey
3) Covenant against encumbrances

315
Q

What are the future covenants of the general warranty deed?

A

1) Covenant of quiet enjoyment
2) Covenant of warranty
3) Covenant of further assurances

316
Q

What is the covenant of seisin?

A

Warrants that the deed describes the land in question

317
Q

What type of covenant is the covenant of seisin?

A

Present covenant

318
Q

What is the covenant of the right to convey?

A

Warrants that the grantor (i.e., the seller) has the right to convey the property

319
Q

What type of covenant is the covenant of the right to convey?

A

Present covenant

320
Q

What is the covenant against encumbrances?

A

Warrants that there are no undisclosed encumbrances on the property that could limit its value

321
Q

What type of covenant is the covenant against encumbrances?

A

Present covenant

322
Q

What is the covenant of quiet enjoyment?

A

Grantor promises that the grantee’s possession will not be disturbed by a third-party claim

323
Q

What type of covenant is the covenant of quiet enjoyment?

A

Future covenant

324
Q

What is the covenant of warranty?

A

Grantor promises to defend against future claims of title by a third party

325
Q

What type of covenant is the covenant of warranty?

A

Future covenant

326
Q

What is the covenant of further assurances?

A

Grantor promises to fix future title problems

327
Q

What type of covenant is the covenant of further assurances?

A

Future covenant

328
Q

What is the difference between a general warranty deed and a special warranty deed?

A

In a special warranty deed, the grantor warrants against defects only caused by the grantor (but has the same 6 covenants)

329
Q

What is a quitclaim deed?

A

The grantor makes no warranties as to the health of the title & provides the least amount of title protection

330
Q

When is a quitclaim deed most often used?

A

1) Tax sales
2) Intra-family disputes (i.e., divorce)

331
Q

When may breaches of covenants occur?

A
  • Present Covenant = at the conveyance
  • Future Covenant = after the conveyance, once there is interference with possession
332
Q

What is the remedy for breach of a covenant?

A

Damages

333
Q

What is escheat?

A

If a decedent dies without a will and without heirs, the decedent’s property goes to the state

334
Q

What is ademption?

A

A devise of property that fails (or “adeems”) because it is not in the testator’s estate at death

335
Q

What is the basic rule of ademption?

A

The gift fails and the intended recipient gets nothing

336
Q

What is satisfaction of ademption?

A

If the testator gives the intended beneficiary the promised gift during life, then the beneficiary keeps the gift

337
Q

What is lapse?

A

The intended beneficiary predeceases the testator. Traditionally, the first fails and would fall to the residuary gift.

338
Q

What is Anti-Lapse?

A

Every state has an anti-lapse statute to prevent a gift from failing because an intended recipient predeceased the testator.

In most states, to qualify under an anti-lapse statute, the predeceasing beneficiary must be a relative of the testator who dies leaving issue.

339
Q

When may a new owner use a mortgagor’s defense against the mortgagee?

A

When mortgaged property is transferred to a donee

340
Q

When may a new owner NOT use a mortgagor’s defense against the mortgagee?

A

When a purchases assumes an existing mortgage obligation as part of the purchase price

341
Q

What is required to tack on time for adverse possession?

A

Privity between the adverse possessors

342
Q

What does the Uniform Vendor and Purchaser Risk Act do?

A

Rather than shifting the risk of loss to the buyer following contract signing, the UVPRA keeps the risk of loss with the seller until the buyer takes possession of or receives legal title to the property

343
Q

How is an equitable mortgage created?

A

When an absolute deed (i.e., a deed that is free of encumbrances and transfers unrestricted title to property) is given with the intent to secure a debt or loan

344
Q

When may a deed be void and unenforceable, even by a bona fide purchaser?

A

1) If the grantor’s signature is forced
2) If the deed itself is forged
3) If the grantor is deceived about the nature of the executed document

345
Q

What is a future-advances mortgage?

A

A mortgage given by a debtor in exchange for the right to receive money from the lender in the future

346
Q

What priority does a future-advance mortgage have if the advances are optional?

A

Priority with respect to amounts loaned before notice of a subsequent mortgage

347
Q

What priority does a future-advance mortgage have if the advances are obligatory?

A

Priority with respect to amounts loaned before AND after notice of a subsequent mortgage

348
Q

When an easement is shared, who may the owner who maintains or repairs the easement seek contribution from?

A

1) The other owners
2) The servient-estate owner IF the owner uses the easement

349
Q

What is a tenant’s obligation if there is partial condemnation?

A

Tenant must continue to pay rent, but is entitled to compensation for the portion of the leased property that was taken.

350
Q

T or F: A seller of a residential property must disclose any known material defects that cannot be reasonably discovered by the buyer

A

True

351
Q

When is a defect material?

A

If it:
1) Substantially affects the value of the residence;
2) Impacts the health or safety of a resident; OR
3) Affects the desirability of the residence to the buyer

352
Q

What is a liquidated damages clause?

A

It allows the seller to retain the buyer’s deposit if the buyer breaches the real-estate contract

353
Q

When is a liquidated damages clause enforceable?

A

So long as the amount is reasonable, which is usually no more than 10% of the purchase price

354
Q

When may a liquidated damages clause be unenforceable?

A

If the seller didn’t suffer any actual loss

355
Q

What is a trust?

A

A device for managing property with bifurcated ownership between trustee and beneficiary

356
Q

What is a trustee?

A

The party in a trust who owns property (legal title) for the benefit of the beneficiary and manages the trust

357
Q

What is a beneficiary?

A

The party in a trust who holds equitable title and benefits from the trust. The beneficiary has standing to enforce the trust.

358
Q

What is a charitable trust?

A

A trust designed to benefit the public and is charitable in nature

359
Q

What is a private trust?

A

A trust designed to satisfy some legal purpose by giving property to a person or group for the benefit of another person or group

360
Q

What is a settlor?

A

The person who creates the trust

361
Q

What is res?

A

Property that is subject to the trust. Generally, a trust must contain property.

362
Q

What is a restraint on alienation?

A

A restriction on transferring property

363
Q

Where do you most often see restrictions on alienation?

A

1) Inter vivos grant or an estate smaller than a fee simple
2) Devise of an estate smaller than a fee simple
3) Co-tenant agreement
4) Covenants that run with the land
5) Easements

364
Q

What are the rules about restraint on alienation?

A

1) An absolute restraint on alienation is void
2) A partial restraint is valid if it is for a limited time and a reasonable purpose
3) A restriction on the use of property is generally permissible (e.g., covenants)

365
Q

What is the effect of the restraint on alienation?

A
  • If the restraint is VALID = any attempt to alienate the property will be null and void
  • If the restraint is INVALID = the restraint is rejected and the property can be alienated in violation of the restraint

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