Acquiring Property Flashcards
First Possession
First person to possess something owns it
Acquisition by Find
finder of lost property gets ownership of the thing against the whole world except the true owner
Possession as Labor
whoever puts in the work to improve an abandoned thing gets ownership
First Finder v. Second Finder
Property to first finder
Ad Coelum on Acquisition
Owner of one things automatically owns some related thing
Accession
Owners, including first possessors, own closely related package of things
True Owner v. finder
True owner
Finder v. Anyone else
Finder
Converter 1 v. Converter 2
Debate on this
Elements of Adverse Possession
- Actual
- Exclusive
- Open and Notorious
- Continuous
- Hostile
Actual Element
Actually enter the land
Exclusive Element
Using the land as an owner would; acting as though they have the power to exclude
Open and Notorious Element
Not possessing the property in secret or trying to hid that you are adversely possessing the property
Continuous Element
Have to live there as a true owner for the statutory period of tine
Hostile Element
Contrary to the wishes of true owner; there without permission
Hostile Majority
state of mind irrelevant
Hostile Small Minority
acting in bad faith
Hostile Larger Minority
acting in good faith
Possible Additions to Adverse Possession Element
- Color of Title
- Good Faith listed separately
- Peaceful
- Pay Taxes
- Enclose or Improve
Theme of Adverse Possession
Was the adverse possessor using the land like a true owner
Adverse Possession Statute of Limitations Background Rule
Clock starts running when property is converted
Adverse Possession Statute of Limitation Good Faith Purchaser Option 1
Clock starts running when owner demands return of property
Adverse Possession Statute of Limitations Good Faith Purchaser Option 2
Clock starts running when owner discovers or should have discovered who has the property
Quite Title Action
Action brought by someone (usually adverse possessor) to have court declare ownership of property
- everyone who has a claim must come forward or lose their claim
Timeline of Real Estate Transactions
- Pre contract
- Contract
- Closing
- Recording
- Post Transaction
Pre Contract
Negotiation, offer and acceptance
Contract stage of real estate transactions
- Enforceable contract, seller in possession with legal title, buyer has beneficial title
- Buyer acquires financing mortgage
- Buyer inspects property
- Buyer conducts title search to ensure marketable title
Closing
- Seller executes deed to buyer
- Buyer/mortgagor pay seller
- Buyer signs mortgage note
Post Transaction
Buyer makes monthly mortgage payments
Deed
Formal signed written document that transfers real property to someone else
Only way to transfer real property
Deed
Merger by Deed
After deed is handed over, buyer only has three remedies based on kind of deed, contract is merged
Kinds of Deeds
- General Warranty Deed
- Quitclaim Deed
- Special Warranty Deed
General Warranty Deed
- Seller guarantees title against defects
- Promises to compensate if someone else has a valid claim, and defend against third party claims in court
Quitclaim Deed
- Seller transfers seller’s interests but no guarantee about what they are
- Buyer has no remedy if someone else has a valid claim (except seller’s intentional fraud
Special Warranty Deed
Seller guarantees against defects in title arising from seller’s own actions (prior sale of portion of described lot) but not those of others (prior owner sold portion of described lot)
Equitable Conversion
During contract phase of real estate transaction between signing contract and closing seller retains legal title, buyer gets equitable title
Equitable Title
Buyer stuck with costs but gets benefits of anything that happens related to property before closing
Installment Land Contract
Mortgage alternative where buyer pays seller in installments
Nemo Dat
you can’t sell what you don’t own
Nemo Dat with Good Faith Purchasers
People who obtain title to goods by fraud get voidable title that can be transferred as full title to a good faith purchaser for value
Title Search
- Look up chain of title in grantee index starting with current grantor and going backward
- repeat in grantor index going forward from original grantor
Types of Recording Acts
- Race
- Notice
- Race-Notice
Race
- First to record wins
- statutory language: first to record
Notice
- Good faith purchaser for value gets ownership unless they had notice of previous transaction, recording counts as notice
- Statutory language: without notice or in good faith
Actual Notice
they actually know
Constructive Notice
they could have figured it out if they looked
Race-Notice
- Good faith purchaser for value gets ownership if they (1) didn’t have notice and (2) are the first to record
- Statutory Language: without notice or in good faith + who shall first record
Recording acts generally protect
good faith purchasers for value from duplicative grants
Recording Evidentiary Effect
Recording is evidence of ownership
Can you own things without recording them
Yes, even in adverse possession
Mortgage
A security interest (lien) in real property in exchange for a loan
Mortgagor
- borrower, gives security interest and receives loan
- if default, mortgagee can foreclose
Equity of Redemption
Right of mortgagor to pay remaining balance within set period of time (up to a year)
Foreclosure Sale
Any income above remaining balance goes to mortgagor and mortgagee has a duty to obtain a fair price
Mortgagee
Lender, gets security interest and gives loan
Note
document governing mortgage
Fiduciary Duties
A legal duty to act in the best interest of another
