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MBE > MBE Real Property > Competing Claims > Flashcards

Competing Claims Flashcards

When two property claims compete, lawyers win! Learn the priority of property claims and the procedures needed to safeguard a claim.

1
Q

Define

adverse possession

A

Method of acquiring title to another’s land by hostile continuous possession for a period of time.

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2
Q

Elements of adverse possession

A

Trespasser’s possession must be:

  1. Continuous for duration of statutory period (depends on jurisdiction);
  2. Hostile;
  3. Actual,
  4. Open & notorious;
  5. Exclusive
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3
Q

What is the default statutory period for adverse possession?

A

20 years

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4
Q

What is “continuous” possession?

A

Uninterrupted use of the property throughout the statutory period.

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5
Q

Does seasonal or infrequent use count as continuous possession?

A

Yes as long as it is consistent with the ordinary use of the property (ex. if property is a ski cabin or summer beach house).

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6
Q

Define

tacking

A

When a trespasser “tacks on” (adds on) a prior adverse possession period to meet the statutory requirement.

⚠️ Note: Privity between trespassers is required. The new trespasser must take by non-hostile means without gaps in possession.

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7
Q

When is tacking not allowed?

A

If the new trespasser has taken control of the property through hostile means (called “ouster”).

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8
Q

Does the SOL run if the rightful owner was disabled when the adverse possession started?

A

No, SOL will toll (pause) if rightful owner was disabled (minor, incarcerated, mentally incompetent, etc) when the adverse possession started.

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9
Q

What is “actual” possession?

A

Actual, physical possession of the property.

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10
Q

What is “open and notorious” possession?

A

Obvious and not hidden; the owner would know of it with reasonable inspection.

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11
Q

What does it mean for possession to be hostile?

A

Without the owner’s permission. Trespasser does not need to intend to adversely possess the property.

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12
Q

Can a trespasser adversely possess the land with the owner’s permission?

A

No, defeats hostility requirement

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13
Q

If a renter overstays their lease, is this considered “hostile” possession?

A

No, tenancy at sufferance exists, not adverse possession

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14
Q

Will a mistaken encroachment satisfy the intent needed for adverse possession?

A

Majority: Yes, mistake is sufficient

Minority: No, possessor must show they would have intentionally encroached even if they had known of their hostile use

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15
Q

Define

color of title

A

Title that appears valid, but actually isn’t because of some flaw in the deed (i.e. deed doesn’t contain all required elements)

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16
Q

What is the effect of adversely possessing the property under color of title?

A

If adverse possessor occupies a significant portion of the land in the deed, the possessor is entitled to the entire property

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17
Q

Can you adversely possess government land?

A

No

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18
Q

Can a co-tenant acquire title to the whole property through adverse possession?

A

Yes, but only if the co-tenant clearly and unequivocably ousts the others from the land for the statutory period

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19
Q

When will a restrictive covenant run with land acquired by adverse possession?

A

Only if adverse possessor’s use was consistent with the covenant

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20
Q

What are the 3 steps in a land transaction?

A
  1. Land contract;
  2. Closing;
  3. Deed transfer
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21
Q

Requirements for a land sale contract to satisfy the SOF

A
  1. In writing;
  2. Signed by the parties to be bound;
  3. Contain essential terms of the deal (description of the land, consideration to be paid, etc)
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22
Q

When does a land sale contract not need to satisfy the SOF?

A

If buyer does 2 of the following:

  1. Takes possession of the land;
  2. Makes physical improvements; and/or
  3. Pays significant part of the purchase price
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23
Q

Define

implied covenant of marketable title

A

title is free from defects and unreasonable risk of litigation

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24
Q

What defects render a title unmarketable?

A
  1. Encumberances;
    • Covenants
    • Easements
    • Mortgages
    • Liens
  2. Title acquired by adverse possession;
  3. ​Zoning violations;
  4. Incurable physical defects; and
  5. Future interests that have not consented to transfer
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25
Q

Can the buyer waive defects that render a title unmarketable?

A

Yes

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26
Q

Define

duty to disclose

A
  1. Seller has duty to disclose all material latent defects; and
  2. Seller cannot misrepresent or fraudulently conceal
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27
Q

Do disclaimers limit the seller’s liability for misrepresentation or fraudulent concealment? (e.g. “property sold as is”)

A

No, disclaimers do not limit liability for misrepresentation or fraud

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28
Q

Deadline for seller to deliver marketable title

A

By the date of closing

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29
Q

What happens if the title is unmarketable at the time of closing?

A

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

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30
Q

What can the buyer do if they discover the title is unmarketable?

A

Notify the seller before the closing date and give them a reasonable time to cure defects

If seller doesn’t cure, buyer can seek specific performance, damages, and an action to quiet title

⚠️ If buyer doesn’t notify seller beforehand, deed controls b/c of the merger doctrine and seller is not liable

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31
Q

What is the implied warranty of quality in construction/good workmanship?

A

For new property, implied promise that structures will be constructed in a “good and workmanlike” mannner

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32
Q

What’s the doctrine of merger and its effect?

A

Once the deed is transferred/conveyed to the buyer, the contract merges with the deed and the deed controls, not the contract.

⭐️ This means that whatever obligations the seller had under the contract are not enforceable unless they are also contained in the deed.

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33
Q

What is the doctrine of equitable conversion?

A

Doctrine that helps determine who bears the risk of loss. Once the buyer signs K to purchase land at a later date, but before closing:

  • Buyer has equitable title; and
  • Seller has legal title
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34
Q

Under the doctrine of equitable conversion, who bears the risk of loss if the property is destroyed prior to closing?

A

Holder of the equitable title (the buyer), regardless of whether buyer took possession yet

35
Q

What’s the exception to the doctrine of equitable conversion?

A

Buyer will not bear the risk of loss if loss is attributable to the intentional or negligent acts of the seller

36
Q

What happens if the buyer bears the risk of loss and the seller has insurance?

A

Seller should give the buyer a credit equal to the insurance proceeds against the purchase price

37
Q

What happens if the seller dies before closing?

A

Seller’s interest is considered personal property & passes to seller’s devisees

38
Q

What happens if the buyer dies before closing?

A

Interest treated as real property & buyer’s devisees can sue for transfer of property to themselves

39
Q

Define

deed

A

Instrument that passes legal title to the land from the seller to the buyer

40
Q

What is required for a deed to be effective?

A
  1. In writing and signed by grantor;
  2. Describe the parties and the land;
  3. Delivered (i.e. seller must have present intent to transfer the interest)
41
Q

What types of actions show present intent to transfer the deed?

A
  1. Physical delivery: mailing or handing the deed to the person; or
  2. Any other conduct or words that would imply present intent to transfer
    • ex. recording the deed, drafting the deed
42
Q

If the grantor keeps the deed after writing it, has there been delivery?

A

No, rebuttable presumption that the grantor did not presently intend to transfer the property

43
Q

Does giving the deed to the grantee’s agent (e.g. attorney) count as valid delivery?

A

Yes

44
Q

If the grantor transfers the deed to her own agent (e.g. attorney), and tells the attorney to deliver the deed in the future, does the transfer count as delivery?

A

No, delivery only occurs once the agent actually delivers the deed to the grantee.

45
Q

Define

death escrow

A

Occurs when grantor instructs agent to deliver deed to grantee upon grantor’s death.

⭐️ Only valid if grantor places deed beyond his/her control, i.e. retains zero control upon transfer to attorney. If grantor retains any power over the deed (e.g. asking it to be returned), then no valid death escrow has been created and no valid deed delivery.

46
Q

Define

relation-back doctrine

A

If deed is given to third party and third party subsequently delivers deed to grantee, delivery date will be when deed was first given to the third party

47
Q

What are the exceptions to the relation-back doctrine?

A
  1. There are multiple conditions on delivery by third party; or
  2. Grantor expressly retains the right to reclaim the deed from the third party
48
Q

If a deed has been effectively delivered, can the grantor rescind it?

A

No

49
Q

Is acceptance required for the deed transfer to be complete?

A

Yes, if grantee rejects the deed, no transfer has occured

50
Q

If the grantee accepts the deed, but then returns it to the grantor, has ownership been transferred back to the grantor?

A

No, merely giving it back to the grantor does not change ownership - a new deed must be validly executed for ownership to revert back to the grantor

51
Q

What are the 3 types of deeds?

A
  1. General warranty;
  2. Special warranty; and
  3. Quitclaim
52
Q

Define

quitclaim deed

A

Buyer takes the property “as-is,” with no warranties, covenants, or promises

53
Q

If the buyer has a quitclaim deed, can she sue the grantor if the grantor didn’t actually have title or the title is not free and clear?

A

No, buyer takes the interest “as-is,” without any warranties or assurances

54
Q

Define

general warranty deed

A

Contains 6 present and future covenants of title that cover the property’s entire history

Present:

  1. Seisin;
  2. Right to convey; and
  3. Against encumbrances

Future:

  1. Quiet enjoyment;
  2. Warranty; and
  3. Further assurances
55
Q

Define

special warranty deed

A

Contains the same covenants of title as a general warranty deed, but only for the period of the seller’s ownership of the land. Does not contain any warranties for what happened before the grantor took ownership

56
Q

When is the only time a present covenant can be breached?

A

At the time of delivery

57
Q

What is the only time that a future convenant can be breached?

A

After delivery of the deed

58
Q

Define

covenant of seisin

A

Grantor owns the property described in the deed

59
Q

Define

covenant of the right to convey

A

Grantor has the right to convey title

60
Q

Define

covenant against encumbrances

A

There are no encumbrances on the property (liens, easements, etc.)

61
Q

Define

covenant of quiet enjoyment

A

Third party will not assert a claim for a title

62
Q

Define

covenant of warranty

A

Grantor will defend against a third party’s claim for title

63
Q

Define

covenant of further assurances

A

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

64
Q

Define

bona fide purchaser for value (BFP)

A

Buyer who:

  1. Purchases property for value;
  2. Without notice of any prior claims
65
Q

What are the 3 types of notice?

A
  1. Actual;
  2. Record (also called constructive notice); and
  3. Inquiry
66
Q

Define

actual notice

A

Actual, personal knowledge of a competing claim

67
Q

Define

record notice

A

Implied to all persons when a conveyance is properly recorded (i.e. if the conveyance was properly recorded, the buyer has record notice)

68
Q

Define

inquiry notice

A

Reasonable inspection would have revealed the prior claim

⚠️ The buyer doesn’t need to actually inspect to have inquiry notice. As long as the buyer would have discovered the claim if they had reasonably investigated, they will have inquiry notice

69
Q

What are the types of recording statutes?

A
  1. Notice*
  2. Race-notice*
  3. Race

* Most common

70
Q

Who prevails in a notice jurisdiction?

A

Subsequent bona fide purchaser if earlier purchase was not recorded and and purchaser did not know of earlier purchase

71
Q

Name the type of recording statute: “No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof, unless it is recorded.”

A

Pure notice jurisdiction

72
Q

Who prevails in a race jurisdiction?

A

First grantee to record (regardless of whether they are a BFP)

73
Q

Name the type of jurisdiction: “No conveyance or mortgage of an interest in land is valid against any subsequent purchaser whose conveyance is first recorded.”

A

Race jurisdiction

74
Q

Who prevails in a race-notice jurisdiction?

A

First BFP to properly record

75
Q

Name the type of statute: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice who shall first record.”

A

Race-notice

76
Q

Are mortgagees considered BFP’s and thus protected by recording acts?

A

Yes because they have paid value

77
Q

Are grantees who were given the deed by gift or will protected by the recording statutes? (generally)

A

No, because they did not pay value.

If they received the deed from a BFP, however, the Shelter Rule will apply and they will be protected.

⚠️ This is true even if the grantee records the deed. Since they did not pay value, they are not protected against prior claims (unless Shelter Rule applies)

78
Q

Define

wild deed

A

Deed recorded outside of the chain of title; does not give notice to subsequent purchasers

79
Q

Define

estoppel by deed

A

If a landowner transfers title without actually owning it, and then subsequently does acquire title, she will be estopped (barred) from denying the validity of the first conveyance

80
Q

Define

Shelter Rule

A

If a buyer receives property from a BFP, they will also be protected as a BFP.

⭐️Enables devisees, heirs, or anyone else who isn’t a BFP to gain the same protection as BFP has

81
Q

Define

ademption

A

When the testator gives real property to a beneficiary, but no longer owns the property at their death, the devise is adeemed. The named beneficiary takes nothing.

Ex. Max conveys his home to Ian in his will, but then sells the home to Carly. Max then dies. Ian gets nothing because the devise is adeemed.

More info: Ademption

82
Q

Can ademption occur with both a specific devise (real property) and a general devise (monetary gift)?

A

No, only with a specific devise

83
Q

What is the effect of an anti-ademption statute on adeemed gifts?

A

The devisee is entitled to the proceeds from the sale of land

MBE Real Property (6 decks)

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