All Flashcards
Recording Acts - Notice Jurisdiction
Bona fide purchaser for value without notice of prior interest prevails over prior grantee who failed to record. Must record against subsequent purchaser.
Recording Acts - Race jurisdiction
First to record prevails - doesn’t matter if there is knowledge of prior conflicting interest
Recording Act - Race Notice Jurisdiction
Subsequent bona fide purchaser for value protected only if they take without notice and they are first to record.
Recording Acts - How is notice measured?
Tested at time of conveyance.
Title insurance
Protects policy holder (owner or lender) against defects that could have been uncovered by a careful title search or forged/undeliverable/unenforceable deeds.
General warranty deeeds
Present covenants:
- Seisin - deed that the grantor owns land as described in deed
- Right to convey - grantor has right to transfer title
- against encumbrances - no undeclared encumberances against land
General warranty - Future covenants
Quiet enjoyment - grantee not disturbed in possession by third party’s lawful claim
Warranty - grantor will defend grantee against third party claim
Further assurances - grantor will do whatever future acts reasonably necessary to pass title later if title is imperfect
Special warranty deed
Same covenants of title as general warranty deed, but only warrants against defects arising at time grantor has title
Quitclaim Deed
Wild West deed, no covenants of title
A demotion
Where devise of property by will fails because testator no longer owns the property on their death
Lapse
Where devise of real property in will fails if beneficiary named in will dies before testator and no alternate beneficiary is named. An anti-lapse statute prevents a gift from lapsing if the beneficiary leave issue who survive the testator.
Forms of Restraints on alienation of property
Disabling - total prohibition on transfer of property interest by owner, always void
Forfeiture - property is forfeited if the interest owner attempts to transfer his interest, restraint on future/ life estate can be valid
Promissory restraint - promise by property interest holder not to transfer interest, enforceable by injunction or damages, can be valid on file states
Restraints on use of property generally allowed, absolute restraint of alienation of fee simple is void
What is a mortgage?
Interest in property that serves as security for an obligation.
Does mortgage have to satisfy SOF?
Yes.
Lien theory of mortgage
Majority theory. Debtor/mortgagor has title and right to possession until foreclosure and creditor/mortgagee has lien and right to the land if there is a default of mortgage.
Installment land contract
Where seller retains title to property until the buyer makes the final payment
Conditional sale and repurchase
Where property is sold and then leased back to seller: If lease is for long time with option to repurchase, this may be a disguised mortgage.
Liability for mortgage after transfer of property
If transferee assumes the mortgage on transfer, borrower is secondarily liable. The borrower may be fully relieved of liability if lender (1) modifies loan terms, (2) releases transferee of liability or if lender releases the property
Due on sale clause
Lender can demand immediate payment of full amount due
Due on encumberance clause
Lender can accelerate mortgage upon second mortgage
Equity of redemption
After default on mortgage but before the foreclosure sale, person who defaulted on mortgage has opp to regain title by paying amount of loan obligation owed plus interest
Priority in mortgage foreclosure
If there is more than 2 mortgages, foreclosure terminates the junior interest and has no effect on senior interest. Rule is “first in time, first in right”
Exceptions:
- Purchase money mortgage
- Recording act - recorded interest may take priority over unrecorded one
- future-advances
- after- acquired property
What is an easement?
Right held by a person to make specific and limited use of land owned by another person.
Express easement
Created by parties in writing that satisfies requirements for a deed
Implied easement
Can either be implied by necessity or implication.
Necessity:
- Dominant/Servient estates must have been owned by same person.
- Necessity arises when property severed and estates created.
-Property is essentially useless without benefit of easement.
Implication:
- Dominant/Servient estates under common ownership.
- Quasi-easement existed at severance.
- Prior use was continuous, apparent or known.
- Easement reasonably necessary for dominant estate’s enjoyment.
Easement by prescription
Use that was continuous, actual, open and hostile for a statutory period
Transfer of easements
Easement appurtenance: The benefit/burden is transferred automatically with transfer of estate.
Easement in gross: Burden transfers automatically, but benefit transferable only if commercial parties intended it.
Termination of easement
- Release - by writing which satisfies deed.
- Merger - easement mergers into title when owner of one estate acquires title to other estate.
- Severance - Attept to convey easement seperate from land it benefits.
- Abandonment - Owner purposely acts with clear intent to abandon right. Need conduct.
Is unrecorded express easement enforceable against BFP of Servient estate?
No
Profits - Land
Holder of profits is entitled to enter land to take from soil or substance of soil eg mineral, timber, and oil. Created in a similar way to easements, except cannot be created by necessity.
License to enter land
License is permission to enter someone’s land, but it is freely revocable unless coupled with an interest or estoppel. Does not need to satisfy SOF.
Requirements for valid deed
- Identified parties
- Grantor’s signature
- Words of transfer
- Reasonably definite property description (extrinsic evidence allowed)
Delivery of a deed
The grantor must intend to make the transfer of the property interest to the grantee. Parol evidence admissible to show intent.
Acceptance of deed assumed for beneficial transfers.
Adverse possession
- Continuous Use (seasonal is ok, time can be tacked on)
- Open/Notorious (physical presence)
- Hostile - Objective intent to claim land without permission of owner
- Exclusive - cannot share with owner
Merger
Where there is a land sales contract, obligations merge into the deed upon delivery unless the parties intend otherwise.
Marketable title
Title free from defects or unreasonable risk of litigation.
The seller is generally not required to deliver marketable title until closing e.g. they can use sale proceeds to pay off existing mortgage.
Seller also has duty to disclose all known material defects not readily observable.
Contingent remainder
Created in an unascertainable grantee or is subject to express condition precedent before grantee’s taking
Doctrine of worthier title
Common law rule which has mostly been abolished.
Prevents grantor from creating a remainder in grantor’s heirs (minority J). Creates rebuttable presumption of reversion to grantor. E.G. “A conveys house “to B for life, then to A’s heirs”. In worthier title J, A has right of reversion.
