BAR ESSAYS

Question 1

The grantor of a general warranty deed guarantees that he holds 6 covenants of title. Present covenants include:
Future covenants include:

Answer 1

the covenant of seisin, the covenant of the right to convey, the covenant against encumbrances.
the covenant of quiet enjoyment, the covenant of warranty, and the covenant of future assurances.

Question 2

A special warranty deed only warrants against…

Answer 2

defects arising during the time the grantor has title.

Question 3

A quitclaim deed promises…

The grantee in a quitclaim deed receives…

Answer 3

no covenants of title. The grantee in a quitclaim deed receives no better title than what the grantor possessed.

Question 4

Valid deeds abide by _________ and include…

Answer 4

the Statute of Frauds; all necessary terms, such as the grantor’s signature, named grantee, words of transfer, and a description of the property.

Question 5

In Texas, an instrument conveying real property may not be recorded unless…

Answer 5

it is signed and acknowledged or sworn to by the grantor (i) in the presence of two or more credible subscribing witnesses; or (ii) before and certified by an officer authorized to take acknowledgements or oaths.

Question 6

For a joint tenancy to exist:

Answer 6

(1) each tenant must have an equal right to possession of the property; (2) each tenant must have an equal interest; (3) each tenant’s interest must have been acquired at the same time; and (4) each tenant must acquire their interest in the same instrument. In Texas, the right of survivorship is not automatically included in a joint tenancy.

Question 7

For residential property, a notice of default must be served by…

Answer 7

certified mail and provide at least 20 days to cure the default before notice of sale will be given. After the 20 days’ notice, notice of the sale must be filed with the county clerk, posted on the courthouse door, and served on the debtor by certified mail at least 21 days before the sale date.

Question 8

Texas homeowners may end the foreclosure process by…

Answer 8

paying off the debt before the foreclosure sale begins. This process is known as an equity of redemption. The seller must notify a purchaser who is in default their right to cure the debt and allow the purchaser at least 60 days to do so.

Question 9

The purchaser of a property at a foreclosure sale takes the property…

Answer 9

free and clear of any junior mortgage and subject to any senior mortgage.

Question 10

The money from a foreclosure sale would be first applied to…

Answer 10

the costs associated with the sale, second to the balance and interest of the debt itself, and finally to all junior interest holders. Any residue would be paid to the debtor.

Question 11

When subcontractor notifies debtor of original contractor refusal to pay.

Answer 11

An owner who receives lawful notice of a claim may withhold from payments owed to the original contractor an amount necessary to pay a claim to a subcontractor. The owner is not liable for any money paid to the original contractor before he received notice. If the owner received notice, and a lien has been secured and reduced to a final judgment, then the owner is liable, and his property is subject to a claim for any money paid to the original contractor.

Question 12

Mechanic’s lien.

Answer 12

In Texas, a contractor, subcontractor, or other supplier of materials or labor to be used for the construction or repair of a home may secure a mechanic’s lien on the property if the materials or labor were provided pursuant to the contract.

Question 13

A mechanic’s lien extends to…

Answer 13

the home, building, fixtures, improvements, or railroad, but does not extend to sidewalks, streets, or utilities that are public property.

Question 14

A mechanic’s lien secures payment for…

Answer 14

labor performed, for materials furnished or specially fabricated, or for the preparation of a plan.

Question 15

A subcontractor may not claim a lien that exceeds…

Answer 15

an amount equal to the proportion of the total price of the labor performed, materials furnished or specially fabricated, reasonable overhead costs, and proportionate profit margin minus the sum of payments received.

Question 16

A person claiming a mechanic’s lien must file…

Answer 16

an affidavit with the county clerk not later than the 15th day of the 4th calendar month, or the 3rd calendar month for residential projects, after the day the indebtedness accrues. The affidavit must be signed by the person claiming the lien and must include a sworn statement of the amount of the claim, the names and last known addresses of the owner, original contractor, and claimant, a statement of the work performed and materials furnished, and a legally sufficient description of the property to be charged with the lien.

Question 17

Any person who files an affidavit with a mechanic’s lien must:

Answer 17

send a copy of the affidavit by registered or certified mail to the owner at his last known business or residence address not later than the fifth day after the affidavit is filed with the court. Any person who is not an original contractor must also send a copy of the affidavit to the original contractor at his last known business or residence within the same time period.

Question 18

A subcontractor must give the original contractor notice of any unpaid balance…

Answer 18

no later than the 15th day of the 2nd month in which the subcontractor’s labor was performed or material delivered.

Question 19

In Texas, for a homestead to exist, there must be…

Answer 19

a present enforceable right, plus the right to possession of the property. The homestead claimant must have the intent to occupy the property as a homestead and must make overt acts of occupation and dedication indicating such intention.

Question 20

A rural homestead consists of:

Answer 20

not more than (i) 200 acres for a family, or (ii) 100 acred for a single adult.

Question 21

An urban homestead consists of not more than:

Answer 21

ten acres of one or more contiguous lots. A homestead is urban if at the time the designation is made, the property is (i) located within city limits, its extraterritorial jurisdiction, or a platted subdivision; and (ii) served by municipal police, fire protection, and at least three of either electric, natural gas, sewer, storm sewer, or water services. There cannot be a mixed homestead.

Question 22

To show that a noncontiguous homestead is part of a rural homestead, the owner must show that the second tract, on which he does not live, is…

Answer 22

necessary to the use and enjoyment of the tract on which he does live, as a home.

Question 23

The exceptions to the homestead protection from forced sale include:

Answer 23

purchase money mortgages, taxes on the property, refinance of a lien against the homestead, mechanic’s liens on the homestead, home equity loans, reverse mortgages, and owelty of partition.

Question 24

The warranty of habitability.

Answer 24

In Texas, a landlord must provide a safe, decent, and sanitary dwelling, and he must make repairs of any conditions that threaten the health or safety of an ordinary tenant.

Question 25

A landlord must make a diligent effort to repair a condition if the tenant…

Answer 25

gives proper notice of the condition, the tenant is not delinquent on his rent at the time notice is given, and the condition materially affects the health and safety of an ordinary tenant.

Question 26

If the landlord breaches the warranty of habitability…

Answer 26

the tenant may terminate the lease, remedy the defect and offset the cost against the rent, sue for damages, or defend against eviction if the premises are not safe or habitable.

Question 27

In an option contract…

Answer 27

one party acquires the right to purchase property, typically during a specific time period, in exchange for consideration. An option contract must follow the same requirements of any contact. An option contract is also subject to the Statute of Frauds; the K must be in writing, signed by the party to be charged, and contain all of the essential terms (parties, property, description, terms of price and payment).

Question 28

Liens vs. title

Answer 28

Texas is a lien state as opposed to a title state. Therefore, the mortgagee or creditor has a lien or security interest on the property, not title to the property. The mortgagor or debtor may retain title and possession of the property.

Question 29

Personal Property; In order to qualify as a homestead under Texas law…

Answer 29

a residence must rest on the land and have a requisite degree of physical permanency, immobility, and attachment to fixed realty. Personal property attached to the land (a fixture) is also considered part of the homestead. However, personal property must be a fixture (e.g. boat cannot be a homestead).

Question 30

The property owner must retain during the progress of work and for 30 days after work is completed the following:

Answer 30

(i) 10% of the contract price of the work to the owner; or (ii) 10% of the value of the work measured by the proportion that the work done bears to the work remaining, the contract price, or if no contract price, the reasonable value of completed work.

Question 31

Conveyance by a spouse

Answer 31

Married spouses cannot sell, convey, or encumber a homestead without joinder of the other spouse; both spouses must agree and sign the conveyance instrument.

Question 32

deed of trust

Answer 32

A deed is a title interest, whereas a deed of trust is a security interest. Both a deed of trust and a mortgage are instruments that secure a debt. A deed of trust includes the power to sell the property without judicial proceedings. It also requires the borrower to maintain the property, pay taxes, insure the property, and otherwise maintain the value of the property.

Question 33

Easements

Answer 33

An easement is the right held by one person to make specific, limited use of land owned by another. Easement can be express or implied. If an easement was previously used on the servient estate by an earlier owner, the court may find that the parties intended the easement to continue if the prior use was continuous, apparent (open and obvious), and reasonably necessary to the dominant land’s use and enjoyment.

Question 34

Easement by necessity

Answer 34

If an easement is necessary for the use of the property, a court will presume that the grantor intended to create an easement. An easement by necessity is generally created only when property is virtually useless without the benefit of an easement across neighboring property.