Competing Claimants (60% MBE)

Question 1

What is Adverse Possession

Answer 1

Legally sanctioned stealing of title to land away from the rightful owner.

Question 2

How to establish someone’s claim to property?

3

Answer 2

1. adverse possession;
2. land sale contract
3. conveyance

Question 3

Adverse possession has three major components

Answer 3

1. Physical: obvious
2. Mental: against owner’s interest
3. Time: statutory period

Question 4

What is the physical component of adverse possession?

Answer 4

actually, opening, notoriously, and exclusively occupying the land

Adverse possessor would put the true owner on notice

Question 5

What is the physical component of adverse possession?

Additional element of minority jurisdiction?

Answer 5

Have to pay taxes on the land

Question 6

What is the mental component of adverse possession?

Answer 6

The possessory must have an intent in possession that is contrary to the owner’s interest

1. claim of right (claims as their own)
2. color of title (has a mistaken belief they have a deed to the property)

Question 7

What is fatal to adverse possession?

Answer 7

Anytime prior to adverse possessing period, if they receive permission, then defeats adverse possession

knowledge ≠permission

Question 8

When can co-tenants adversely possess against another?

Answer 8

If one of the co-tenants ousts another for the statutory period (tells other co-tenant to not come on)

Question 9

Will a mistaken encroachment satisfy hostile intent?
Majority?
Minority?

Answer 9

Yes, it is sufficient.

Minority: must shows they would have intentionally encroached even if they had known

Question 10

What is the time component of adverse possession?

Answer 10

Have to hold the property continuously for the entire statutory period

Question 11

What is the time component of adverse possession if no statute?

Answer 11

20 years

Question 12

What does holding a property continuously mean for adverse possession?

Answer 12

It’s context specific. When is it normally occupied.

Question 13

What is tacking?

Answer 13

It combines adverse possession periods to meet the statutory requirement

Question 14

When does tacking occur?

Answer 14

If there has been a transfer of interest in property from one adverse possessor to another

Question 15

What does the adverse possessor obtain if successful?

Answer 15

Gets the land interest of the actually occupied land

Question 16

What can an adverse possessor that obtain if they enter through color of title?

Answer 16

If entered under color of title
+
occupies significant portion of what is described in the deed

Then, gets everything described

Question 17

What is color of title?

Answer 17

When someone believes their title is valid but it is not because of some flaw in the deed.

Question 18

What land rights does an adverse possessor get?

Answer 18

Whatever rights the owner has that he took them from.

• any encumbrances on the land remain
• if a life estate, still sticks

Question 19

What does a disability do in statute of limitations on adverse possession?

Answer 19

it suspends the running of statute of limitations for adverse possession

Question 20

A disability will only toll the running of a statute of limitations if
(4)

Answer 20

One of the following disabilities exists at the START of the adverse possession

1. infancy (

Question 21

Up until the time the adverse possession period has run, the true owner can

Answer 21

have the adverse possession ejected off the land and sue for damages

Question 22

As soon as the statute of limitations runs, the adverse possession relates back to

Answer 22

the date of the entry onto the land, meaning that the true owner can longer sue

Question 23

Once the adverse possession period has run, the adverse possessor is:

Answer 23

the true owner of the land

Question 24

Statute of Frauds requirements

6

Answer 24

(A) a writing for a transfer of an interest in real property.
(B) The writing must be signed by the party to be charged and must include the following essential terms:
(1) description of the property;
(2) description of the parties;
(3) price; and
(4) any conditions of price or payment if agreed on.

Question 25

When does ownership of the land change in a land sale contract?

Answer 25

When the deed to the property is exchanged at the date of closing

Question 26

What is the doctrine of equitable conversion?

Answer 26

When a land sale contract is formed, at that point there is a bifurcation of title.

Equitable title passes to the buyer

Legal title remains with seller until it passes to the buyer at closing

Question 27

Under the majority approach, risk of loss follows which title?

Answer 27

equitable title - if anything happens before closing they still must go through

Question 28

Who has equitable title before closing?

Answer 28

the buyer

Question 29

Under the Uniform Vendor and Purchaser Risk Act (minority rule), risk of loss follows which title?

Answer 29

The risk of loss remains with the seller until there is a transfer of

1. possession; or,
2. legal title

Question 30

Covenant Marketable Title is?

Answer 30

A promise by the seller to deliver marketable title to buyer

-implied in every land sale contract unless specifically says otherwise

Question 31

Marketable title means a title that is

Answer 31

reasonably free from defect

Question 32

What types of marketable title defects generally occur?

4

Answer 32

1. unpaid mortgage or lien
2. covenants and easements which restrict the use of the land
3. Title acquired by adverse possession (needs a judicial decree declaring they are owner)
4. an existing zoning or ordinance violation of the property (≠buyer wants to do something that is a violation)

Question 33

How to contract for covenant of marketable title?

Answer 33

implied, unless contract says otherwise?

Question 34

When does the seller have to have marketable title?

Answer 34

on the date of closing

Question 35

What if seller has a defective title at date of closing? Majority rule?

Answer 35

Can make arrangements on the date of closing to earmark part of the purchase price to remedy the defect and make the title marketable

Question 36

At the date of closing what happens to the land-sale contract?

Answer 36

It merges into the deed, and remedies only from the deed are available

Question 37

What is the merger doctrine?

Answer 37

On the date of closing, the land-sale contract merges into the deed?

Question 38

When is the only time a buyer can bring up a defect in marketable title under the land-sale contract?

Answer 38

on the date of closing

• later is too late because it becomes the deed
• earlier is too early because it does not manifest until closing

Question 39

If the buyer finds a defect in the title after the date of closing, what are their options

Answer 39

they must sue on the deed, can only sue on warranty deed

Question 40

What is a quitclaim deed

Answer 40

You are taking the property as is; cannot sue on quitclaim deed

Question 41

What is a warranty deed

Answer 41

A warranty deed contains covenants of title

Question 42

What is a general warranty deed

Answer 42

A general warranty deed contains covenants of title for all owners of the property in the past

Question 43

What is a special warranty deed?

Answer 43

The warranty only covers the period of the seller’s ownership of land

Question 44

What are the present covenants of title?

3

Answer 44

seisin
right to convey
encumberances

Question 45

What are the future covenants of title?

3

Answer 45

quiet enjoyment
warranty
further assurances

Question 46

What is the covenant of seisin?

Answer 46

Covenant that the grantor owns the property

Question 47

What is the covenant of right to convey?

Answer 47

grantor can convey

Question 48

What is the covenant of encumberances?

Answer 48

there are no encumberances

Question 49

What is the covenant of quiet enjoyment?

Answer 49

A third party will not assert a claim to the land

Question 50

What is the covenant of warranty?

Answer 50

If a third party asserts a claim to the land, the grantor will indemnify

Question 51

What is the covenant of further assurances?

Answer 51

the grantor will do anything reasonably necessary to perfect grantee’s title

Question 52

Which covenants of title run with the land?

Answer 52

Run with the land, breach can be at the time of closing or afterwards

Question 53

When must a breach of present covenants occur?

Answer 53

Only can be breached at time of closing

Question 54

When must a breach of future covenants occur?

Answer 54

can occur at the closing or afterwards

Question 55

What is seller’s duty of care to buyer?

Answer 55

needs to disclose material latent defects known to the seller but not readily observable and not known to the buyer

Question 56

if a landlord assigns his interest, who does the tenant pay rents to?

Answer 56

to the landlord until they receive actual notice of the change

Question 57

What are the only ways a tenancy by the entirety can be severed?
(2)

Answer 57

1. divorce

2. if the couple both agree to sell

Question 58

Where one co-tenant is in sole possession of the co-tenancy property
-what are the other tenants liable for

Answer 58

contribution for taxes and insruance
(minus)
the value of any benefit the sole tenant derived from the property

Question 59

If a member of a joint tenancy has a lien on their share of the property, what happens at death?

Answer 59

It disappears when the others recover it through right of survivorship

Question 60

What has to be completed in selling a joint tenancy interest for the tenancy to be split?

Answer 60

equitable title must pass to someone else

legal title does not have to pass

Question 61

When there is a life tenant and a remainderman, who is responsible for paying mortgage principal and interest?

Answer 61

remainderman = principal

life tenant = interest

Question 62

if a landlord assigns his interest, who does the tenant pay rents to?

Answer 62

to the landlord until they recieve actual notice of the change

Question 63

What are the only ways a tenancy by the entirety can be severed?
(2)

Answer 63

1. divorce

2. if the couple both agree to sell

Question 64

Where one co-tenant is in sole possession of the co-tenancy property
-what are the other tenants liable for?

Answer 64

contribution for taxes and insurance
(minus)
the value of any benefit the sole tenant derived from the property

Question 65

If a member of a joint tenancy has a lien on their share of the property, what happens at death?

Answer 65

It disappears when the others recover it through right of survivorship

Question 66

What has to be completed in selling a joint tenancy interest for the tenancy to be split?

Answer 66

equitable title must pass to someone else

legal title does not have to pass

Question 67

When there is a life tenant and a remainderman, who is responsible for paying mortgage principal and interest?

Answer 67

remainderman = principal

life tenant = interest

Question 68

There are three requirements for a valid conveyance of real property by deed

Answer 68

1. deed must be sufficient to satisfy the statute of frauds
2. delivery of the deed
3. Deed must be accepted by the buyer

Question 69

Four requirements of a valid deed writing

Answer 69

1. sufficiently identifies the parties (know exactly who they are)
2. Words indicating intent to transfer
3. Sufficient description of the property (metes and bounds or a descriptive term for a parcel of land)
4. Grantor’s signature

Question 70

What does not need to be included in a valid deed writing?

Answer 70

1. signature of grantee
2. consideration (property can be given away)
3. notarization
4. does not have to be record

Question 71

Delivery of a deed exists if

Answer 71

the grantor presently intends that the property transfer to the grantee (state of mind)

Question 72

Grantor will do one of three things with the deed to delivery it
(3)

Answer 72

1. giving the deed to the grantee
2. grantor may retain the deed
3. give the deed to third party and let them carry out conveyance

Question 73

If a grantor physically gives a deed to the grantee, is there delivery?

Answer 73

gives rebuttable presumption that the grantor presently intends that the property transfer to the grantee

-Can be rebutted by extrinsic evidence that shows that under no circumstances did they intend the transfer (≠conditions)

Question 74

If the grantor retains the deed after writing a deed to another, is there delivery?

Answer 74

gives rebuttable presumption that the grantor presently intends not to transfer the property to the grantee

-Can be rebutted by extrinsic evidence that shows that under circumstances he did intend the transfer (≠conditions)

Question 75

If the grantor gives the deed to a third party after deeding property to another, is there delivery? If so, when?

Answer 75

Escrow

When a deed is given to the third party and tells them to give it to the grantee, when the grantee gets the deed from the third party the delivery date relates back to when deed was first given to the third party

Question 76

When the grantor hands the deed to the third party and places conditions on the delivery, what is the effect?

Answer 76

Generally, one condition will not defeat the relation back doctrine

If > 1 condition, the relation back doctrine will be defeated and delivery will be third party –> grantee

Question 77

What is the relation-back doctrine ?

Answer 77

When a deed is given to the third party and tells them to give it to the grantee, when the grantee gets the deed from the third party the delivery date relates back to when deed was first given to the third party

Question 78

If Grantor gives the deed to X, the third party, and says, “X, give this deed to grantee when I die.”

What’s the effect?

Answer 78

Death Escrows

Interpreted as giving the grantor a life estate and conveying a remainder to the grantee

A present delivery prior to death

Question 79

Ways to defeat the relation-back doctrine?

Answer 79

1. multiple conditions on delivery by third party

2. If the grantor expressly retains the right to reclaim the deed from the third party:

Question 80

How can Deed be accepted by the buyer?

Answer 80

if transfer of property to the grantee is beneficial, then it is presumed

Question 81

If the grantee refuses to accept the conveyance of property, then

Answer 81

there will be no valid conveyance of property

Question 82

If a homebuyer signed a purchase and sale agreement and then dies, what is the result on the contract?

Answer 82

right to receive land under an enforceable contract passes to the deceased’s heir.

Question 83

There is a strong presumption that first in time is

Answer 83

first in right

Question 84

If there is a race statute:

Answer 84

The person who records first wins

Question 85

If there is a notice statute:

Answer 85

For a subsequent purchaser to previal, they must be a bona fide purchaser (someone who takes without notice and pays value)

Question 86

If there is a race-notice statute:

Answer 86

Under a race-notice statute an unrecorded conveyance or other instrument is invalid against a subsequent bona fide purchaser (purchases for value, and takes without notice), who records first.

Question 87

How to evaluate recording act statutes?

Answer 87

Only evaluate valid transfers

Then, tells you when a subsequent claimant can beat a previous claimant

Question 88

What does a bona fide purchaser mean?

Answer 88

someone who takes without notice
+
pays value (> nominal consideration, a mortgage issued at time of loan, ≠ judgement creditor)

Question 89

What are the types of notice?

Answer 89

Actual notice

Constructive notice:

Inquiry notice

Question 90

What is actual notice

Answer 90

facts the person actually knowns

Question 91

What is Constructive notice

Answer 91

comes from the recording itself

Question 92

What is inquiry notice?

Answer 92

There are enough facts to known to prompt reasonable inquiry, held to have noticed the facts that would have come up upon investigation

Question 93

How to record a conveyance

2

Answer 93

Tract index (minority)
Grantor/Grantee Index (Majority)

Question 94

The recording process of a tract index

Answer 94

The best when it comes to giving notice

Records for each parcel within the county with a chronological listing of each conveyance of the property

Always will be constructive notice if prior recording

Question 95

The recording process of a grantor/grantee index (name) system

Answer 95

2 sets of books (grantor, grantee)

Grantor books show all conveyances under the grantor’s name

Grantee books shows all conveyance under the grantee’s name

1. look in grantee books to find when the grantor received the property
2. look in grantor books to see if grantor transfered property between receiving and now selling it
3. Go to grantor books and find the grantor to the grantor

Question 96

From recording statutes, when is notice measured?

Answer 96

at the date of conveyance to the purchaser

Question 97

What is a wild deed?

Answer 97

A deed recorded outside of the chain of title

Question 98

What is estoppel by deed?

When?
Minority v. Majority Approach?

Answer 98

Applies when a grantor transfers title to property that they do not currently own; however, subsequently, they acquire the title

• minority: title automatically passes to previous grantee
• majority: the previous grantee must go to court and assert a claim to the title

Question 99

What is the shelter rule?

Answer 99

If your grantor has a good claim, then future purchasers can shelter under their good title

Question 100

Bona fide purchasers who collect by will

Answer 100

≠ have to pay value

Question 101

Two instruments that make up a mortgage

Answer 101

1. mortgage

2. Note

Question 102

Types of security devices

4

Answer 102

1. mortgage
2. deed of trust
3. absolute deed
4. installment land sale contract

Question 103

What is a mortgage?

Answer 103

An interest in real property that is meant to secure the performance of an obligation (generally repayment of a debt)

Question 104

Who is the mortgagor?

Answer 104

The borrower of money who issues the mortgage on the property to the lender

Question 105

Who is the mortgagee?

Answer 105

The lender because they are receiving the mortgage

Question 106

What is the mortgage document?
What is the note document?
Which follows which?

Answer 106

Mortgage represents the interest in the land.
Note represents the debt of mortgagor.

Mortgage follows note, if you have it then presumed to have the mortgage

Question 107

What is a deed of trust?

Answer 107

Debtor borrows money and deeds the property to a third party, the third party releases the deed back to debtor once they have paid the lender

Question 108

What is an absolute deed?

Answer 108

Debtor borrow’s money then issues a deed to the creditor

-if extrinsic evidence establishes that it is meant to be a security, then it will be a mortgage

Question 109

Installment land sale contract is what?

Answer 109

Seller retains the deed until all of the payments are made

-if buyer defaults, then seller keeps land and all previous payments (unless they have previously forgiven default)

Question 110

What does mortgagee receive

Lien theory?
Title theory?
Intermediate Theory?

Answer 110

Lien theory - mortgagee gets a lien on property, mortgagor retains rights to possess and get rents and profits

Title theory - mortgagee gets title to the property, mortgagor retains possession (until default) but mortgagee gets rents and profits produced.

Intermediate Theory-the lien theory applies until default, then the title theory kicks in

Question 111

Duties of person who has possession of mortgaged property

Answer 111

manage the property in a reasonably prudent manner; cannot commit waste
-if they do, can be sued for damages

Question 112

Prepayment of mortgage right?

Answer 112

No right to prepay a mortgage debt unless expressly authorized

If prepayment is permitted, generally involves prepayment fees (generally upheld)

Question 113

What is a deed in lieu of foreclosure?

Answer 113

If mortgagor goes into default, the mortgagor can issue a deed to mortgagee to discharge the mortgage debt (debt is satisfied)

-mortgagee takes it subject to all junior liens attached

Question 114

Two types of foreclosure

Answer 114

1. Judicial Foreclosure – a judicial proceeding

2. Private (power of sale)

Question 115

Foreclosure Private sale in default is only available

Answer 115

if the mortgage instrument allows for it

Question 116

A deficiency judgment is

Answer 116

if the foreclosure sale does not cover the amount of the debt

Question 117

Debtor’s equitable right of redemption is?

Answer 117

Cannot be taken away

At any time prior to the foreclosure sale, debtor can redeem by paying the debt

Question 118

In what order do mortgages attach?

Answer 118

Follow the priority order of land conveyances

Question 119

What interests are affected by foreclosure sales?

Answer 119

Only junior interest (discharged provided they are notified and allowed to participate)

Senior interests are not affect - buyer of property at foreclosure still has the senior interests attached

Question 120

Debtor’s statutory right of redemption?

Answer 120

Only exists if there is a statute authorizing it

After foreclosure, debtor has a limited period of time where they can force the foreclosure purchaser to pay the debtor whatever they paid for it

Question 121

2 types of Purchase Money Mortgages

Answer 121

Mortgage must be executed at the same time as the purchase of property

1. vendor purchase money mortgage: a mortgage issued to the seller to ensure payment of purchase price
2. third party purchase money mortgage: borrowing money from a third party and issuing a mortgage to the third party

Question 122

What type of mortgage has priority over all other mortgages?

Answer 122

Purchase money mortgage - once issued and recorded

Question 123

Future Advance mortgages are?

Answer 123

Line of credit, future advance loans

If at the time the arrangement is entered into notice is given to future creditors, then it will have priority of the time it is entered into

Question 124

What happens when mortgage property is transferred?

Answer 124

The mortgage runs with the land (provided it is properly recorded).

Question 125

If taking title

• subject to the mortgage
• assuming the mortgage
• if language is ambiguous

Answer 125

subject - no personal liability, land can be seized but deficiency only against original debtor

assume - personal liability, land can be seized, and they take on primary personal liability

ambiguous: default = subject to

Question 126

Rights of the grantor against the grantee if there has been an assumption:

Answer 126

The grantor is secondarily liable, if the grantor is sued, then can get the grantee to pay the debt (exoneration)

Question 127

Rights of the grantor against the grantee if there has been an assumption and grantor makes payments following transfer

Answer 127

Then can get money from grantee

Question 128

Subrogation is?

Answer 128

Rights of the grantor against the grantee if there has been an assumption

Grantor pays off the debt and becomes creditor to grantee

Question 129

Due-on-sale clauses are?

Answer 129

Gives the mortgagee the ability to call the entire balance on an attempt to transfer the property
-has to be specifically mentioned in mortgage

-Generally is enforceable.

Question 130

How to tell what type of recording statute you are dealing with?
(2)

Answer 130

1. Race component= first records or records first

2. Notice = good faith in value or without notice in value

Question 131

When will a non-refundable down payment be held invalid?

Answer 131

When it is a liquidation damages clause that is unenforceable

Question 132

When is a liquidation damages clause enforceable?

Answer 132

When it is a reasonable attempt at a fair compensation in the event of breach

≠penalty for failure to perform

Question 133

How can a land-sale contract be enforced absent a writing?

Answer 133

partial performance

1. payment
2. possession
3. substantial improvements

Question 134

Will an option to purchase property be enough to trigger the doctrine of equitable conversion?

Answer 134

no, must be a land-sale agreement

Question 135

The existence of an encumbrance, such as a covenant or equitable servitude which the buyer did not agree to accept as part of the conveyance, renders title:

Answer 135

unmarketable

Question 136

What must a senior interest in property do to extinguish a junior interest in property?
(3)

Answer 136

1. make junior interest a ∆ in a foreclosure action
2. give junior interest notice
3. make foreclosure sale

Question 137

When there is a modification to a senior mortgage, what is the effect on a junior mortgage?

Answer 137

A junior mortgage prevails over the modification if the modificaiton materially prejudices the holder of the junior mortgage

(e.g. increasing the principal amount)
≠ increasing the maturity date

Question 138

When does a property owner commit waste that is actionable by a mortgagee?

Answer 138

When they make

Physical changes to the property

That result in the reduction of the property’s value

Question 139

In a lien theory jurisdiction, what options does mortgagee have when there is waste?

Answer 139

1. foreclosure
2. obtaining an injunction
3. recover damages

≠ eviction

Question 140

How must adverse possession be recorded?

Answer 140

It is outside of the recording acts and does not need to be recorded to take effect; the proper analysis is first in time first in right

Question 141

Can a grantor revoke delivery of a deed to escrow?

Answer 141

Not if the grantor manifested present intent to create a future interest in her bridge partner

Question 142

what does the shelter rule protect

Answer 142

any person who is the successor in interest to a grantor protected by the recording act is also protected by the act

Question 143

In the absence of a contract provision dealing with quality title, what is the default promise?

Answer 143

implied covenant that the title conveyed by the seller will be marketable (no encumbrances)