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Question 1

contract for deed

Answer 1

a contract for deed allows a buyer to take immediate possession of the property while the seller retains title until the final installment payment is made. The seller could traditionally keep all installment payments and retake possession upon default. But states now assist buyers in default by requiring a foreclosure, offering the equitable right of redemption, or granting the buyer restitution.However, a buyer cannot regain possession by merely indemnifying (ie, reimbursing) the seller for the missed payments

–treating an installment land contract as a mortgage and requiring the seller to foreclose on the property to gain clear title (Choice A)

– offering the buyer the equitable right of redemption by paying the remaining contract balance to retain possession and obtain ownership (Choice D) or

–allowing the seller to retain ownership of the property but requiring some form of restitution to the buyer—eg, refunding the contract payments to the extent that they exceed the damages caused to the seller by the buyer’s default (Choice B).

Question 2

deed requirements

Answer 2

A deed must (1) be in writing and signed by the grantor, (2) identify the grantor and the grantee, (3) contain words of transfer, and (4) describe the property interest being transferred. Therefore, a deed to a nonexistent grantee (eg, a corporation that has not been legally formed) is void

Question 4

tenancy in common

Answer 4

A tenancy in common is a concurrent estate in which each co-tenant holds a separate share of the property and the right to possess the entire property with no right of survivorship.

tenancy in common with right of survivorship
But a right of survivorship can be created by an agreement that satisfies the statute of frauds—ie, the agreement must:

be in writing
be signed by the parties against whom it is to be enforced and
contain all essential terms.

Question 5

tenacy at will

Answer 5

A tenancy at will—a tenancy with no fixed term that can be created by express agreement or by implication if the tenant occupies the premises rent-free—generally continues until terminated by either the landlord or the tenant.

Question 6

termination tenancy at will

Answer 6

A tenancy at will can be terminated (1) by the landlord or the tenant or (2) automatically when the landlord conveys a present interest in the property to a third party. But when the landlord conveys a future interest, the tenancy continues, and the future interest holder has no right to terminate that tenancy.

Question 7

tenancy for years

Answer 7

A tenancy for years is an estate measured by a fixed and ascertainable amount of time. This type of tenancy is created by an agreement between the landlord and the tenant and may be for any length of time (eg, one week, six months, five years). Termination occurs automatically upon the expiration of the term, with no notice required from either party. As a result, a tenant who remains on the premises after the term expires becomes a tenant at sufferance (ie, holdover tenant).

Question 8

expanded use of the easement does not terminate the easement.

Answer 8

An easement also anticipates reasonable and natural development of the easement holder’s land (ie, dominant estate). Therefore, the easement holder may increase the manner, frequency, and intensity of the easement’s use—so long as that increase does not unreasonably damage or interfere with the use or enjoyment of the servient estate.

Question 9

RAP

Answer 9

The Rule Against Perpetuities (RAP) applies only to contingent future interests—ie, future interests that are held by unknown/unborn persons or subject to a condition precedent.

*Condition precedent
An uncertain event that must occur before a party’s performance becomes due.

EXEMPLE: Here, the deed conveyed the friend a present possessory interest in the tract, and the man received an option to purchase the premises contingent upon the friend’s use of the premises for nonresidential purposes. Therefore, the man’s future interest is subject to RAP.

Question 10

The Rule Against Perpetuities applies only to contingent future interests (eg, purchase options) and voids any such interest that may not vest for more than 21 years after some relevant life in being at the creation of the interes

Answer 10

Under the common law, RAP renders a contingent future interest void ab initio if it could vest more than 21 years after some relevant life in being at the creation of the interest. Therefore, an option to purchase is almost always void if it is not set to terminate within the perpetuities period.

Question 11

contingent future interest

Question 12

To comply with the Rule Against Perpetuities, a right of first refusal must be set to vest or fail within the perpetuities period—ie, within 21 years after some relevant life in being at the creation of the interest.

Answer 12

A future interest that is held by unknown or non-living persons or that is subject to a condition precedent.

Question 13

FAIR HOUSING ACT
The Fair Housing Act prohibits discrimination in the sale or rental of housing (eg, making housing unavailable) on the basis of race, color, religion, national origin, sex, disability, or familial status. Protected familial status includes having children under the age of 18 and being pregnant.

Answer 13

FHA Prohibits discriminatory actions in sale/renting of dwelling based on race, color, religion, sex, handicap, national origin, or familial status—including:

refusing bona fide offer
discriminating in terms, conditions, privileges, or services of purchase/rental
advertising preference for or discrimination against buyer/renter
falsely representing dwelling’s availability for inspection, sale, or rental
inducing sale/renting with discriminatory representations about neighborhood
denying reasonable modifications to accommodate handicap at occupant’s expense

Question 14

FHA doesn’t apply

Answer 14

Act does not apply to:

religious organizations
private clubs that incidentally provide lodging to members
familial status for senior housing
owner of ≤ 3 single-family dwellings*
owner-occupied dwellings with ≤ 4 units*
sale/rental of single-family home by private owner

Question 15

the after acquired title doctrine and the doctrine of estoppel by deed

Answer 15

The after-acquired title doctrine applies when a grantor conveys property by warranty deed before acquiring title to that property. Once the grantor receives title, it will automatically transfer to the earlier grantee. The grantor is then prevented from asserting ownership of the property under the doctrine of estoppel by deed.

Question 16

Types of deeds

Answer 16

1- General warranty deed - Promises that title is free of any encumbrances or defects
2- Special warranty deed- Promises that title is free of defects created by grantor.
3-Quitclaim deed- Transfers any interest grantor has in property without any guarantees as to state of title.

Question 17

equitable servitude

Answer 17

An equitable servitude is a covenant (ie, promise) to do or not do something on land, enforceable by an action for equitable relief against the parties who made the promise and their successors in interest.

Equitable servitude can be express or implied

Question 18

express equitable servitude

Answer 18

An express equitable servitude requires:

1-Writing – the covenant is expressed in a writing that satisfies the statute of frauds (eg, the deed from the businesswoman to the grantee)

2-Intent to run – the promising parties intended for the covenant to run to (ie, bind) their successors in interest (eg, the deed says “heirs or assigns”)

3-Touch and concern – the covenant relates to the use, enjoyment, or occupation of both the dominant and servient estates (eg, prohibits building on one tract to preserve the view on the other) and

4-Notice – the owner of the servient (ie, burdened) estate has actual, record, or inquiry notice of the covenant (eg, the cousin has record notice because the grantee’s deed was properly recorded).

Question 19

implied servitude

Answer 19

1- Intent to create common scheme
2-Restrictive servitude
3-Notice

Question 20

modified senior mortgage

Answer 20

A modified senior mortgage ( first in time ) will retain its priority against junior interests so long as the modification does not materially prejudice the junior interest holders. It is strongly presumed that a time extension is not materially prejudicial.

Question 21

Mortgage

Answer 21

A mortgage is an interest in real property given to a lender (ie, mortgagee) to secure a debt. The debtor (ie, mortgagor) can freely transfer the mortgaged property to a grantee unless the mortgage states otherwise. After the conveyance, the mortgage remains attached to the property and the debtor remains personally liable for the debt secured by the mortgage.

Question 23

deed of trust

Answer 23

A debtor may give his/her interest in real property to a lender to secure a debt—usually through a mortgage or a deed of trust. A deed of trust is created when the debtor conveys the property interest to an impartial third party, as trustee, who holds title to the property for the lender’s benefit. If the debtor pays the debt in full, then the trustee must reconvey the property to the debtor. But if the debtor defaults on loan payments, the trustee can initiate foreclosure proceedings (

Question 24

Right to prepay mortgage

Answer 24

A debtor has the right to prepay a mortgage debt unless the mortgage provides otherwise. Prepayment prohibitions or penalties in a mortgage are generally valid and enforceable.

Under the common law “perfect tender in time” rule, a mortgagor (debtor) has no right to prepay a mortgage debt unless the mortgage documents provide otherwise. However, the prevailing modern trend reverses this presumption and allows prepayment unless the mortgage documents provide otherwise.

Prepayment prohibitions or penalties contained in a mortgage are generally valid and enforceable.* They do not violate public policy because they serve the beneficial purpose of:

allowing the mortgagee to maintain the financial yield intended under the mortgage agreement and
compensating the mortgagee for any losses suffered because of a prepayment

Question 25

Subject to or assumed the mortgage

Answer 25

After the conveyance, the mortgage remains attached to the property and the debtor remains personally liable for the debt secured by the mortgage. But the grantee's obligations depend on whether the grantee( a person to whom t econveyance is made ) ---Took subject to the mortgage – in which case, the grantee does not agree to pay and is not personally liable for the debt or --Assumed the mortgage – in which case, the grantee agrees to pay and becomes primarily liable for the debt, and the debtor becomes secondarily liable as a surety.

Question 26

Mortgage in cooperative v. mortgage on a condominium

Answer 26

A cooperative is a common-interest community that typically consists of land and one or more buildings owned by a corporation that leases individual residential units to its shareholders. Unlike a condominium, in which each unit owner is responsible for his/her own mortgage, a cooperative has a blanket mortgage that generally has priority over occupancy leases. Since the leases are subject to the mortgage on the cooperative, a default on the blanket mortgage can result in foreclosure proceedings on the property, which in turn can terminate all leases. Therefore, the buyer at a foreclosure sale will not take the building subject to a resident's lease.

Question 27

Adverse possession - OCEAN

Answer 27

Under the doctrine of adverse possession, a person who possesses land owned by another may acquire title to the land if his/her possession was: Open and notorious – apparent to a reasonable owner Continuous – uninterrupted for the statutory period Exclusive – not shared with the owner Actual – physical presence on the land Non-permissive – hostile and adverse to the owner

Question 28

A person can only acquire title to another's land through adverse possession if his/her possession of the land is continuous—ie, uninterrupted—for the entire statutory period.

Answer 28

the statutory period for adverse possession is 21 years. Although the neighbor first possessed the land 25 years ago, he left after 5 years and spent a year in Europe. When the neighbor returned from Europe and retook possession of the land, the statutory period started anew. Therefore, the neighbor only continuously possessed the land for 19 years—not 21 years—and he did not acquire title by adverse possession.

Question 29

concurrency of a land acquired by adverse possession

Answer 29

When land is adversely possessed by two or more persons, the possessors acquire a concurrent ownership interest as tenants in common. Since a tenancy in common has no right of survivorship, a co-tenant's ownership interest will pass to his/her heirs if the co-tenant dies intestate (ie, without a will).

Question 30

Devise

Answer 30

is a conveyance by will

Question 31

Intestacy laws

Answer 31

are the rules that determine who inherits a person's property when they die without a will

Question 32

The doctrine of lapse

Answer 32

The doctrine of lapse causes a devise to fail when the beneficiary predeceases the testator. The devised property will instead be distributed in accordance with other devises in the will or, if no others exist, in accordance with intestacy laws. The man (testator-person who made a will) died testate and left his residence to the friend (beneficiary) under a valid will. However, the doctrine of lapse will cause a devise ( a conveyance by a will) to fail if the beneficiary dies before the testator. In that case, neither the beneficiary nor his/her heirs will acquire the devised property. Instead, it will become part of the general estate and be distributed in accordance with the rest of the will. And if there are no other provisions in the will, the property will be distributed under intestacy laws. But since the man left the residue of his estate to the charity, the estate should distribute the residence to the charity—not the child.

Question 33

the doctrine of ademption

Answer 33

The doctrine of ademption will cause a specific devise to fail if the testator does not own the devised property upon death

Question 34

cotenants rights to the natural resources on the land

Answer 34

Each cotenant's right to natural resources on the land (eg, timber) is limited to the size of the cotenant's ownership interest.

Question 35

Non judicial foreclosures

Answer 35

Nonjudicial foreclosures are allowed in most states if the mortgage or deed of trust contains a power-of-sale clause. However, the court can overturn the foreclosure if the auction or sales process violated due process or the purchase price was grossly inadequate. he debtor can ask a court to overturn the foreclosure if the auction or sales process violated due process or the purchase price was grossly inadequate*

Question 36

Purchase Money Mortgage

Answer 36

In foreclosure proceedings, lien priority is generally determined by the date a lien is recorded (ie, first in time, first in right). But purchase-money mortgages (PMMs) are an exception to this rule. These mortgages have super priority over all other liens—regardless of whether the PMM or those liens are recorded—because PMMs are granted to secure the purchase price of the mortgaged property

Question 37

real estate broker and commission A real estate broker is entitled to commission if (1) a ready, willing, and able buyer is produced or (2) the seller enters into a sales contract with a buyer during the listing period.

Answer 37

A real estate broker is someone employed by a seller to handle the sale of real property. The employment agreement is typically referred to as a listing agreement. There are three types of listing agreements: 1-- Open – where the seller may use other brokers to sell the listed property and the commission goes to whichever broker finds a buyer during the listing period 2--Exclusive agency contract – where the seller can find a purchaser and, if the seller does so without the broker's assistance, the broker receives no commission 3--Exclusive right to sell – where the commission goes to the broker if the property is sold during the listing period, !!no matter who finds the buyer!! Unless the listing agreement states otherwise, the broker is entitled to commission if (1) a ready, willing, and able buyer is produced or (2) the seller enters into a sales contract with a buyer during the listing period. This is true even if the buyer backs out of the sale or the sale is not otherwise closed (Choice B). Here, the homeowner and broker entered into an exclusive-right-to-sell listing agreement. The homeowner entered into a contract of sale when he accepted the cousin's offer to purchase the home during the listing period. As a result, the broker is entitled to the full commission—regardless of whether the broker engaged in negotiations with the cousin (Choices A & C).

Question 38

contract

Answer 39

Contracts for the sale of land are enforceable only if they comply with the statute of frauds. This statute requires that these contracts be in writing, be signed by the party against whom enforcement is sought, and contain all essential terms. Essential terms often include: -the identity of the parties -words of intent to buy or sell -a description of the property and the sales price. However, TIME for performance is not an essential term. Instead, courts will infer that performance within a reasonable time was intended. And since the contract here satisfies all the aforementioned requirements, it is enforceable under the statute of frauds

Question 40

Assign contractual obligations

Answer 40

In a contract for the sale of real property, the buyer promises to pay the agreed purchase price and, in exchange, the seller promises to transfer marketable title. The parties can assign (ie, transfer) their respective contractual rights to a third party—even without the other party's consent or consideration*—unless the assignment would: 1-materially change or increase the obligor's duty or risk OR 2-materially impair or reduce the obligor's chance of obtaining return performance.

Question 41

buyer remedies

Answer 41

If a seller refuses to perform, the buyer can (1) rescind the contract and seek restitution, (2) seek specific performance, or (3) sue for damages. Specific performance is only available when money damages are inadequate. Since land is considered unique and money damages cannot compensate for the loss of unique property, this remedy is generally available to buyers (Choice D). Therefore, the investor will likely prevail. Although consideration is not required for an assignment, it is required to make the assignment irrevocable.

Question 42

Fixture

Answer 42

A tenant cannot remove fixtures—ie, items so connected with (or attached to) real property that they are considered a part of that property—without the landlord's consent. However, a tenant can remove trade fixtures—ie, items attached to real property by the tenant for use in his/her trade or business—without the landlord's consent if: the items are removed before, or within a reasonable time after, the lease terminates and the removal will not substantially harm the property (eg, will not degrade the building's structural integrity). But after the removal, the tenant must reasonably restore the property to its prior condition or pay restoration costs.

Question 43

Title Insurance

Answer 43

Title insurance policies only protect named insureds who are affected by an undisclosed title defect. Therefore, insurance companies are not required to indemnify persons whose names do not appear on the policy.

Question 44

In a race-notice jurisdiction, a BFP cannot rely on a forged or altered document to establish priority under the recording act since that document is void.

Answer 44

Recording acts determine the priority of competing interests in the same land. In a race-notice jurisdiction (as seen here), a bona fide purchaser's (BFP's) subsequent property interest has priority over an earlier property interest if the BFP (1) lacked notice and (2) recorded first. But a BFP cannot rely on a forged or altered document to establish priority under the recording act since that document is void.