Kaplan 510-549 - Ownership of RP Flashcards
1
Q
What is an estate in land?
A
An interest in real property that is presently or may become possessory
2
Q
What is the difference between a freehold estate and a non-freehold estate?
A
– Freehold: gives the owner of the estate title to or a right to hold the property
– non-freehold: just gives possession
3
Q
What are different types of freehold estates?
A
Fee simple absolute, defeasible estates, life estates
4
Q
What is the largest possible estate in land that a person can hold?
A
A fee simple absolute
5
Q
What are the rights that accompany a fee simple absolute?
A
This is an aggregate of all possible rights that includes the right to sell/convey all/part of the land and the right to devise the land
6
Q
How long can a fee simple absolute last?
A
In perpetuity. If the owner dies intestate, the property will pass to his heirs via intestacy
7
Q
What are the words that are usually used to create a fee simple absolute?
A
“To A and his heirs.“
8
Q
What is the difference between words of purchase and words of limitation?
A
– words of purchase: this describes the person who will take an interest in the land
– words of limitation: describes the nature of the estate that was gotten
9
Q
Find the words of purchase in the words of limitation in this conveyance, O conveys “To A and her heirs.“
A
- words of purchase: “to A” because A takes an interest
– words of limitation: “and her heirs“ because that is the nature of the estate being gotten
10
Q
Under common law, what was required for a fee simple absolute to be created, and what about modern law?
A
– Common law: it had to have the words “and his heirs“ in order to be a fee simple absolute
– modern law: as long as you say “to someone“ (or: “to A”) it is assumed that a fee simple absolute was created
11
Q
What is a defeasible estate?
A
An estate that may terminate before its maximum duration has run
12
Q
What are the different types of defeasible estates?
A
Fee simple determinable, fee simple subject to condition subsequent, fee simple subject to executory interest, fee tail
13
Q
What is a fee simple determinable?
A
It terminates automatically when a named future event happens.
It uses words like: for so long as, during, while, or until.
It is created in one clause with a limitation built into that clause. It is followed by a possibility of reverter, which may be implied
14
Q
What is an example of a fee simple determinable?
A
“To A and his heirs for so long as the land is used for educational purposes.“
15
Q
What is a fee simple subject to a condition subsequent?
A
This is when the estate can be cut short if it is re-taken by the grantor or third-party on the happening of some named future event.
This gives the grantor the right to take the estate, but it does not automatically terminate the estate.
It is created by these words: provided, however; however if; but if; on condition that; in the event that.
This is created in two separate clauses with the condition being in the second clause
16
Q
What is an example of a fee simple subject to a condition subsequent?
A
“To A and his heirs, but if the land is not used for education, then O has the right to re-enter and terminate the estate.“
17
Q
What is a fee simple subject to executory interest?
A
This is an interest that is automatically divested in favor of a third person if a named event happens.
These are followed by a shifting executory interest and subject to RAP
18
Q
What is an example of a fee simple subject to executory interest?
A
“To A for so long as the land is used for charity, but if it ceases to be used for that, then to B.”
19
Q
What was a fee tail at early common law?
A
It was a freehold estate that descended to the grantee’s lineal descendants/children only
20
Q
What are the different types of fee tail that can be created?
A
– Fee tail general
– fee tail male or female
– fee tail special
21
Q
What is a fee tail general?
A
Children of the grantee take when the grantee dies.
“To A and the heirs of his body.“
22
Q
What is a fee tail male or female?
A
Descent is limited to the male or female heirs of the grantee
“To A and the heirs female of his body.“
23
Q
What is a fee tail special?
A
When descent is limited to the grantee’s descendants by a specific spouse
“To the heirs of his body by his wife B“
24
Q
What is a fee tail?
A
It was primarily used at common law and it meant that the estate would descend to the grantee’s lineal descendants/children only.
It is followed by a reversion in the grantor or a remainder in a third-party that only becomes possessory if the grantee’s lineal line fails
25
How are fee tails treated at modern law?
Today they are disfavored. If the words “and the heirs of his body“ are used:
– most states say that grants a fee simple absolute
– some states say the grantee has a life estate with a remainder per stirpes in the grantee’s lineal descendants in being at the time of the life tenant’s death
26
What happens if the words of the grant are not clear regarding what type of freehold estate was given?
– A covenant is preferred over a DE (defeasible estate) because then the award is money instead of forfeiture
– a FSSCS (fee simple subject to a condition subsequent) is preferred over a FSD (fee simple determinable) because FSSCS does not make forfeiture automatic
27
What are the abbreviations for the three major types of defeasible estates?
– FSD
– FSSCS
– FSSEI
28
What is a life estate?
An estate that lasts for the duration of the grantee’s life.
It uses words like “to A for life.“
29
What is the duty to repair for a life tenant?
He must maintain the property in a reasonable state of repair, with the exception of ordinary wear and tear.
This is limited to the extent of the income gotten, or if he personally occupies the land, to the extent of the reasonable rental value of the land
30
What is the duty to repair for a tenant that occupies the land for a term of years?
He has a duty to maintain the property in a reasonable state of repair, with the exception of ordinary wear and tear.
31
What is the duty of a life tenant with regard to a mortgage on the property?
He has a duty to pay the interest on a mortgage to the extent of profits derived from the property.
32
What is the duty of a tenant for years with respect to a mortgage on the property?
He has no duty to make mortgage payments
33
What is the duty of a life tenant with regard to paying taxes?
He has a duty to pay all ordinary taxes to the extent of profits gotten from the property.
34
What is a duty of a tenant for years with regard to paying taxes on the property?
He has no duty to pay property taxes unless:
– the lease is perpetual or for a long-term with an option to renew forever
– the tenant’s lease has no obligation to pay rent
– the tenant erected improvements on the land for his own benefit
35
What duty does a life tenant have with regard to paying special assessments?
He has to pay the cost of these if the life of the public improvement will be shorter than the life tenant’s estate. If the improvement will last longer, such as curbs or streets, equitable apportionment is made
36
What is the duty of a tenant for years with regard to paying special assessments?
There is no duty to pay these
37
What is a non-freehold estate?
At leasehold estate, which is limited in duration.
– traditionally: the landlord maintained the fee which was subject to the leasehold interest
– modernly: the landlord holds a reversion after the leasehold estate
38
What is an example of a leasehold estate?
“To A for the term of 10 years.“
39
What are all the different future interests?
– Reversionary interest
– remainder
– executory interests
– possibility of reverter and power of termination
40
What is a reversionary interest?
A reversion is a future interest kept by the grantor where he transfers less than a fee interest to a third person.
Majority rule: reversions are transferable/dividable/descendible
Reversionary interests are not subject to RAP
41
What is an example of a reversionary interest?
“To A for life, then to B for life, then to C for life.“
The entire FSA is not accounted for, so following all the life estates, O has a reversion
42
What type of interest does O have?
“To A for 10 years.“
He has a reversion
43
If a grantor conveys his own reversion to another party, that person’s interest is defined as what?
A reversion (it is still called a reversion even though it is now in a third-party)
44
If a grantor has a reversion, but he dies, what happens to his reversion?
It passes through the terms of his will or via intestacy
45
What is a remainder?
A future interest created in a third person that takes effect after the natural termination of the preceding estate.
This is subject to RAP
46
How does a remainder become contingent?
– The taker is unascertained, or
– the interest is subject to a condition precedent so it does not fall in automatically on the natural termination of the previous estate
47
Is a contingent remainder transferable?
– common law: it can be descended or devised, but not transferred inter vivos
– modern law: it is transferable, descendible, and devisable
48
What is an example of a contingent remainder?
“To A for life, reminder to A’s widow and her heirs.“
A has a life estate and his widow has a contingent remainder in fee simple because she is not yet ascertained. So O’s estate retains a reversion
49
Does O have a reversion if this conveyance is made:
“To A for life, remainder to B and her heirs if B reaches 21.“ At the time of creation, B is not yet 21.
Yes, O has a reversion because B’s remainder interest is contingent since he has not yet filled the condition precedent of having to turn 21
50
How do you destroy a contingent remainder?
At common law this could happen if:
– the remainder fails to vest by the natural termination of the prior vested estate
– through the doctrine of merger
– the holder of the present possessory estate surrenders his interest before the contingent remainder vests
51
What is an example of how a contingent remainder can be destroyed because it failed to vest by the natural termination of the prior vested estate?
“To A for life, remainder to B if he reaches 21.“ A then dies before B is 21.
B isn’t 21 yet, so his contingent remainder is destroyed and O’s reversion becomes possessory
52
How can the doctrine of merger destroy a contingent remainder?
If one party that had a present or future interest in the land, by subsequent transactions, obtained all outstanding present and vested estates in that property
53
What are the different ways that merger can happen and thus destroy a contingent remainder?
– by surrendering a present estate to the owner of the future estate
– by releasing a future estate to the owner of a present estate
– when all holders of present and future estates convey all their interests to a third-party
54
What is an example of a contingent remainder that is destroyed through merger?
“To A for life, remainder to B if he earns a law degree.“
A has a life estate and B has not yet earned a law degree. B has a contingent remainder and O has a reversion.
If one year later O conveys his reversion to A, and B still has no law degree, A now has a life estate and the reversion. Those two interests merge because they’re not separated by a vested estate. A then gets a fee simple absolute, and B’s contingent remainder is destroyed
55
What is the modern view regarding destructibility of contingent remainders?
Modernly many jurisdictions have abolished this rule. If a contingent remainder has not vested at the natural termination of the prior vested estate, it becomes an executory interest and is subject to RAP
56
What is a vested remainder?
The taker must be ascertained or ascertainable at the time the remainder is created.
A vested remainder must fall in automatically at the natural termination of the previous estate, so there can be no conditions precedent to taking.
Vested remainders are transferable, descendible, and devisable. They are not subject to RAP
57
What is an example of a vested remainder?
“To A for life, remainder to B and his heirs.“
A has a life estate, and B has a vested remainder in fee simple because he is identified, and his interest falls in automatically at the natural termination of the previous estate/A’s death
58
What is a vested remainder subject to open/vested remainder subject to partial divestment?
This is when a remainder has been made to a class (ie: “my kids”) and at least one member has satisfied the condition precedent to vesting, and other members may be able to join the class later.
59
What is an example of a vested remainder subject to open?
“To A for life, remainder to A’s kids.“ At the grantor’s death, A is living and has one child, B.
A has a present possessory life estate and B has a vested remainder subject to open, because A could have more kids
60
What is a vested remainder subject to total divestment?
When someone has a presently vested remainder that may be terminated if a future event happens.
Ie: “to A for life, remainder to B as long as the land is used for education.“
A has a life estate, and B has a vested remainder subject to total divestment. O retains a possibility of reverter
61
What is an executory interest?
A future interest in a third person that cuts short the previous estate. Any interest created in a third-party that follows the granting of a fee is always an executory interest.
Executory interests are transferable, descendible, and devisable.They are also subject to RAP
62
What are the two different kinds of executory interests?
– Shifting executory interest
| – springing executory interest
63
What is a shifting executory interest?
An interest that cuts short a prior estate created by the same conveyance. The interest passes from one grantee to another
64
What is a springing executory interest?
An interest that follows a gap in possession or divests the estate of the transferor. The interest passes from a grantor to a grantee
65
What is an example of a shifting executory interest?
“To A, but if liquor is served on the land, then to B and his heirs.“
A has a fee simple subject to an executory limitation. B has a shifting executory interest because his interest may cut short A’s estate
66
What is an example of a springing executory interest?
“To A for life, remainder to B and his heirs one month after B’s death.“
A has a life estate. B has a springing executory interest because it cannot become presently possessory until one month after the natural termination of a life estate. O retains a reversion. After A dies, O’s reversion becomes possessory, and one month later, the fee simple springs out of O to B
67
What is a possibility of reverter?
A future interest in the grantor that follows a determinable estate. Anytime there is a fee simple determinable, that automatically creates the possibility of reverter in the grantor.
- Common law: this can descend through intestacy, but cannot be devised or transferred inter vivos
– modernly: it is transferrable, devisable and descendible
The SOL begins to run as soon as the limitation occurs because the property automatically reverts to the grantor when that limitation happens
A possibility of reverter is not subject to RAP
68
What is a power of termination/right of reentry?
A future interest in the grantor that follows a fee simple or life estate subject to a condition subsequent. This requires the grantor to reserve this right in the conveyance either expressly or by implication.
When the event happens, the property does not automatically revert back to the grantor, he must exercise the power of termination through an affirmative action to retake the property.
- common law: this power can descend through intestacy but cannot be devised or transferred inter vivos
- Modernly: it is descendible and devisable, but not transferrable Inter vivos
The SOL does not begin to run until the grantor tries to exercise the right.
The power of termination is not subject to RAP
69
What is an example of a power of termination/right of reentry?
“To A and his heirs, but if alcohol is served on the land, then O and his heirs may re-enter and terminate the estate.“
A has a fee simple subject to condition subsequent and O has a power of termination. If alcohol is served, O must take affirmative steps before A’s estate is terminated. If O transfers this power of termination to C, it is still called a power of termination
70
What are different rules that affect ownership interests in property?
– The rule in Shelley’s case
– doctrine of worthier title
– rule of convenience
– postponed gift to a class
– immediate gift to a class coupled with a condition precedent
– gift to a class with a combination of postponements
– waste
71
What is the rule in Shelley‘s case?
A rule against remainders in the grantee’s heirs. It applies when the grant looks like this, “to A for life, reminder to the heirs of A.”
Requirements:
– A must get a freehold estate [life estate or fee tail]
– A’s heirs must get a remainder in fee [or in tail]
- the same instrument must create both A and his heirs’ interests, and
– both the estates must be legal or both must be equitable
If all of those are met, then A gets both a life estate and the remainder, and by merger A gets a fee simple, so his heirs take nothing.
This is a rule of law that the courts have to treat as an irrebuttable presumption, but this rule has been abolished by statute or judicial decision in most states
72
What is the other name for the rule in Shelley‘s case?
The rule against remainders in grantee’s heirs
73
What is the other name for the doctrine of worthier title?
The rule against remainders in grantor’s heirs
74
What is the doctrine of worthier title?
It is a rule against remainders in the grantor’s heirs. It comes up in grants like this, “to A for life, remainder to the heirs of O.”
It requires that:
– A must get an estate less than a fee simple, like a life estate or term of years
– O’s heirs must get a remainder or executory interest
– both interests must be created by the same instrument, and
– both interests must be legal or both must be equitable.
This is a rule of construction, not a rule of law. The language that leaves a remainder to O’s heirs creates a rebuttable presumption that O intended to retain his interest in himself as a reversion. This can be rebutted by clear and express evidence that he did not intend a remainder in his heirs. If the presumption is raised and not rebutted, A gets a life estate and O keeps the reversion, so his heirs take nothing on their own.
Modernly this doctrine applies to inter vivos transfers only, not to testamentary ones
75
What is the rule of convenience?
This says that a class closes when a member of the class is entitled to distribution. Applies to these classes: children/grandchildren, brothers/sisters, nephews/nieces, cousins, issue, descendants, or family of a designated person
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Possible options:
– if the class is already closed at the time the gift takes effect: all members of the class at that moment take and anyone later born will not be a member of the class
– if the class has conceived members at the time the gift takes effect: they take immediately, the class closes, and that excludes any after born children
- if the class has no members at the time the gift is made: all members of the class are included and may take, and the class stays open until all possible members are born
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76
What are the rules for a postponed gift to a class with no condition precedent?
This deals with what happens to a class at the time a postponement ends. A postponement could come from something like the end of a life estate.
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Different situations:
– if class is already closed at time the postponement ends: all members of the class are included and take
– if class has members but is not yet closed at the time the postponement ends: all conceived members take, the class closes, and this excludes afterborn kids
– if the class has no members at the time the postponement ends: all members are included regardless of when they were born
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I.e: T devices, “To A for life, remainder to the children of B.”
- if B is dead at the time of T’s death: the class of B’s kids is closed, so all of these kids are included and take
– if B dies after T, but before A: the class of B’s kids is closed, so all of his kids take
– if B is alive at A’s death, and has kids: all kids currently alive take, the class closes, and excludes after-born kids
– if B is alive but does not have kids: no kid is entitled to immediate distribution, the class stays open, so any of B’a kids regardless of when they were born or allowed to take
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77
How does it work when there’s been an immediate gift to a class coupled with a condition precedent?
The class closes when the first member of the class satisfies the condition. All the then-born members of the class are included and may take when they satisfy the condition, and any after-born children are excluded.
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I.e: conveyance “to B’s kids who reach 21.“
– If B is dead at the time of conveyance: the class will be closed, so all of his kids are included and can take if they reach 21.
– If B is alive and has a child who has reached 21: the class is closed because that child is entitled to immediate distribution. All of B’s then-born children are included and can take when they reach 21, but afterborn children are excluded
– if B is alive and has one child that is not yet 21: the class stays open. The class closes when one child reaches 21. Then all children that are born at that time will be included and can take when they reach 21, but any child born after is excluded
– if B is alive and has no kids: the class stays open until a child of B reaches 21. All children of B born at the time that that first child reaches 21 will be included and can take when they reach 21. All children born after are excluded
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78
What happens when there has been a gift to a class with a combination of postponements?
The postponement is deemed to end, and the class closes when the last condition is satisfied. All members born before the class closes are included and can take if they satisfy the condition, but all later born people are excluded
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I.e.: conveyance, “To A for life, remainder to B’a kids who reach 21.“ The first postponement is that A must die, and the second postponement is that the children must reach 21.
– If B is dead when the conveyance is made: the class of B’s kids closes and all of his kids are included and can take when they reach 21
– if B is alive at conveyance but dies before A: the class of his kids closes, and all of his kids are included and can take when they reach 21
– if B is alive at A’s death and has a kid that is 21: that kid can take, the class closes at that time, all kids born before are included and can take when they reach 21, but later born kids will be excluded
- If B is alive at A’s death and has no kids or none of his kids have reached 21: the class stays open until a child reaches 21, and then it closes. All kids conceived at that time are included and can take when they reach 21, but afterborn kids are excluded
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79
What are situations that the natural resources on land can be consumed by a life tenant or leasehold interest holder and not be considered voluntary waste?
For the repair and maintenance of the property, or with the permission of the grantor, or open mines doctrine
80
What is another name for permissive waste?
Involuntary waste
81
What are the two different ways that involuntary or permissive waste can occur?
Allowing the property to fall into disrepair, or failing to pay a mortgage interest payment, taxes, or special assessments
82
What are the two different views about ameliorative waste?
– Traditionally: this was prohibited
– modernly: it is allowed if:
* the market value of the remainderman’s interest is not impaired, and
* either: the improvement is permitted by the remainderman, or a substantial and permanent change in the neighbourhood deprived the property of a reasonable current value
83
Who has standing to sue for ameliorative waste?
- can sue for past or future waste: the holder of a reversion, and vested remaindermen
– can only sue to prevent future waste, but not for past waste: a contingent remaindermen
84
What is a cotenant?
A concurrent owner of property. This happens when two or more people share an interest in real property
85
If land is conveyed “to A and B“ what is the presumption in the way it is held?
It is presumed to be a tenancy in common because that is the presumed form of cotenancy. So this would create a fee simple absolute for A and B as tenants in common with no need for any special language
86
What are the different ways that a tenant in common can transfer his interest in the property?
- INTER VIVOS either VOLUNTARILY by a conveyance, lease, mortgage, etc. or INVOLUNTARILY through foreclosure on a mortgage or a judgement creditor lien
- can DEVISE his interest
- interest can DESCEND through intestacy
87
Traditionally what are the words that were required to create a joint tenancy?
“To A and B as joint tenants and not as tenants in common, with full right of survivorship.“
88
What are the four unities that are required to create a joint tenancy?
– Unity of time: tenants must take at the same time
– unity of title: tenants must take by the same instrument
– unity of interest: tenants must take equal shares of the same type
– unity of possession: each joint tenant has the right to possess the whole property
89
Under the traditional rule for joint tenancy, why is it not possible for a sole owner of property to create a joint tenancy between himself and another person by conveying a joint interest directly to the other person?
Because traditionally it was necessary to have the four unities in order to create a joint tenancy, so if you convey an interest to create a joint tenancy that means that the unity of time and the unity of title are broken because you didn’t both take the interest at the same time and you didn’t both take it by the same instrument since you already had the interest.
For this reason it is necessary under the traditional rule that the owner convey the property to a strawman, who then conveys the property back to the owner and the person as joint tenants.
Some jurisdictions now do not require the unities of time and title, which means that a strawman is also not required and a sole owner can create a joint tenancy between himself and another just by conveying a joint interest directly to the other person
90
If A and B are joint tenants, and A dies leaving C as her sole heir, what interest does C take in the property?
No interest, because after A’s death, B’s right of survivorship would take over and he would become the sole owner
91
What happens to a joint tenancy if you transfer your interest?
That severs the joint tenancy. The rationale is that transfer has broken the unities of time and title because now this new person has taken his title through a different instrument and at a different time than the other joint tenant, so that changes it from joint title to tenant in common
92
Is it possible for a joint tenant to devise his interest or for his interest to descend by intestacy?
No, because when he dies the other tenant gets all of his interest
93
If a creditor forces a sale of a joint tenant’s interest to satisfy a debt that is owed, what happens?
That severs the joint tenancy and creates a tenancy in common between the other tenant and the conveyee
94
If only one joint tenant mortgages his interest in the joint tenancy, what is the effect of that mortgage?
– Title theory states: this causes the legal interest of that cotenant to be transferred to the mortgagee. So the mortgage severs the joint tenancy because the unities have been destroyed. Most jurisdictions do not follow this
– Lien theory states: the mortgagee just gets a lien on the property, so no severance occurs because the unities stay intact. Only a foreclosure will sever the joint tenancy. Most jurisdictions follow this
95
Traditionally, in order for a tenancy by the entirety to exist, what words had to be used?
“To H and W as tenants by the entirety and not as joint tenants or tenants in common, with full right of survivorship.“
96
How is a tenancy by the entirety created both traditionally and modernly?
– traditionally: needed specific words of “tenants by the entirety“ to be used in the conveyance
– modernly: many states have statutes that create a presumption of this if the conveyance is to a married couple, even if they are not identified as a married couple in the deed
97
What happens in a tenancy by the entirety if one spouse tries to unilaterally convey the interest or encumber it?
The conveyance is considered to be void
98
What is the only situation that a judgement creditor can execute judgement on a property that is owned as a tenancy by the entirety?
Only if both spouses are joint debtors.
99
What are the different ways that a tenancy by the entirety can be terminated?
– by a joint conveyance of both spouses
– by conveyance of one spouse to the other
– or if the spouses divorce
100
Is it possible to get a partition of a cotenancy?
Yes, each cotenant has the right to seek partition of the property
101
What are the two different ways that you can get partition of a cotenancy?
– Voluntary partition: exchange of mutual deeds among cotenants or sale of the property and then dividing the proceeds
- Involuntary/judicial partition: court action that divides the property either physically or by sale. Traditionally physical partition is preferred unless that would be impractical. If a physical partition cannot produce equal shares, the party that got the larger portion has to make a cash payment to the other party
102
What is the entitlement of each cotenant?
They are entitled to possess the whole property
103
When does wrongful ouster occur with regard to cotenants?
When one cotenant wrongfully excludes another from possession of the whole or any part of the property
104
Does an out of possession cotenant have the right to share in rent and profit derived from the other cotenant from third parties?
Yes
105
Does an out of possession cotenant have the right to demand rent from a cotenant that is an actual possession of the premises?
No, unless the cotenant in possession wrongfully ousted the other cotenant or exploited the property in a way that resulted in permanent depreciation
106
What are the rules about cotenants seeking contribution for repairs?
– Common law: does not allow this
– modernly: contribution can be compelled if the repairs were requested by the repairing tenant and refused by the others
107
If a cotenant paid the mortgage or taxes, can he seek contribution from the other cotenants?
Yes
108
What are the different ways you can create a lease?
– expressly: either orally or in writing. Although a writing is necessary under the SOF if the term is for more than one year
– impliedly: through either the conduct of the parties if a written lease is invalid, or when a holdover tenant pays rent and the landlord accepts the rent
109
What is a good mnemonic to help remember the different types of leases?
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PSAT
– P: periodic
– S: tenancy at sufferance
- A: at will
- T: term of years
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110
Modernly is it possible to give notice to end a periodic tenancy orally?
Yes
111
What are the major duties that a tenant owes?
Pay rent, not commit waste, repair
112
What are the common law and modern rules regarding a tenant’s duty to pay rent if the property is destroyed?
– Common law: The tenant still must pay rent even if the premises are destroyed because he still has possession of the land. The only exception is if he leased a part of a building, then he would be excused from paying rent
– today: the tenant is relieved from paying rent if the premises is destroyed, with the only exception being that he is not relieved if he intentionally or negligently caused the destruction
113
Is it acceptable for a tenant to commit ameliorative waste?
No (this is only allowed in some circumstances for life estates)
114
What are the different approaches to a tenant’s duty to repair?
– Common law estate theory: Landlord has no duty to repair during the lease. Tenant has a duty to not commit waste, so he must repair the premises. This includes minor repairs that keep the building safe from water and wind, but he doesn’t have to rebuild if the premises is destroyed by an act of God, and neither does the landlord. If the landlord and tenant agree on how to allocate repair duties, such as the tenant assumes a general duty to repair, then he is responsible for repairing the premises from anything including fire and storms. He must also rebuild or replace if it is destroyed by those things
– modern contract theory/Majority rule: the parties are free to covenant for their duties. Unless they covenanted otherwise, the common law rule about the duty to repair applies. If a tenant has agreed to a general covenant to repair, he must repair, but ordinary wear and tear is excepted from this and so are acts of God. If the tenant covenants to repair without exception, he must make all repairs. If there was no covenant in place, the landlord must repair damages from casualties
– modern trend: tenant is not required to rebuild if the destruction was not his fault
115
What is the landlord’s major duty if a leasehold has been created?
To deliver possession of the premises at the start of the lease term
116
What are the two different approaches to a landlord’s duty to deliver possession of the premises at the start of a lease term?
– Majority/English rule: the landlord must deliver actual possession of the property
– minority/American rule: the landlord only has to deliver legal right to possession, not actual possession
117
What are some duties that state law usually creates for Landlord?
The duty to provide things like running water and heat
118
What is an assignment?
When the tenant transfers to a third person all of his rights, title, and interest in the leased premises. Then the assignee comes into privity of estate with the landlord
119
What is the difference between privity of contract and privity of estate when it comes to assignments and subleases?
– Privity of contract: this exists only between original parties to an agreement, unless there is a novation
– Privity of estate: this comes through the succession in rights to the same property by multiple parties.
120
How does privity of estate work?
The landlord enters a lease agreement that conveys a part of his rights (right to presently possess the property) to the tenant. By doing this the parties are in privity of estate.
If the tenant grants something less than his full rights in the property to another party (perhaps via a sublease) that party does not enter into privity of estate with the landlord, he is only in privity of estate with the tenant.
The tenant and subtenant enter into privity of estate, but the subtenant does not enter into privity of estate with the landlord, because there’s no direct relationship. The landlord and the original tenant stay in privity of estate
121
If LL and T enter into a five year written lease, and then two years later T subleases the property to S for one year, who has privity of estate?
T and S are in privity of estate with each other, but LL and S are not. LL cannot sue S directly for anything, instead LL must sue T, who can then sue S
122
What is the only way that an original tenant can stop being liable to the landlord after he has assigned or subleased?
If there has been a novation
123
What is a novation?
A separate agreement between the landlord, original tenant, and assignee where the landlord agrees to discharge the original tenant from liability in exchange for the assignee becoming liable
124
What type of privity applies to an assignment?
The assignee comes into privity of estate with the landlord. So if rent is not paid, the landlord can sue the assignee
125
If L and T enter a five-year lease, and one year later T assigns the lease to T2. If T2 fails to pay rent to L, who can L sue?
L can sue either T because of privity of contract with him, or T2 because of privity of estate
126
If L and T enter a five-year lease, and one year later T assigns the lease to T2. Then six months later T2 assigns to T3. If T3 fails to pay rent to L, who can L sue?
L can sue T because of privity of contract, and T3 because of privity of estate. But he cannot sue T2 because he is not in privity of contract or privity of estate with that person
127
How are covenants against assignments or subleases construed?
Strictly against the landlord
128
What is the rule in Dumpor’s case?
If a landlord waives the covenant against assignment, it is then unenforceable as to the next assignment. This rule does not apply to subleases and does not apply when the landlord specifies that the waiver is “one time only.“
129
What is a silent consent clause?
When a prohibition against assignments or subleases does not give a standard or condition for giving or withholding consent
130
What is the majority rule and minority rule for silent consent clauses?
– Majority rule: a silent consent clause gives the landlord the right to withhold consent for any reason or no reason, even if it is arbitrary or unreasonable, as long as it is not discriminatory.
– Minority rule: a silent consent clause requires the landlord to be reasonable in withholding consent
131
What are a landlord’s remedies if a tenant breaches?
If the tenant doesn’t pay rent, or materially breaches, the landlord can seek eviction and/or damages
132
What are the two approaches to rent acceleration clauses in leases if the tenant breaches?
– traditionally: acceleration is not available
| – modernly: it is available
133
If a landlord is bringing an action against a tenant for not paying rent, what are the grounds that a tenant can defend on?
Non-compliance by the landlord or destruction of the premises
134
What does it mean to say that a tenant abandoned the premises?
He vacated the property with no intent to return, and he failed to pay rent.
135
Traditionally if a tenant abandons the premises, what are the options for what the landlord can do?
– Retake the premises
– ignore the abandonment and continue to hold the tenant liable for rent
– re-enter and relet the premises
136
What are the two different approaches to self-help for a landlord removing a breaching tenant?
– Traditionally: Landlord can use self help to remove a breaching tenant from the premises
– modernly: self-help is prohibited, and the landlord has to seek court action to re-enter the premises
137
Generally landlords are not liable to their tenant or others on the premises with the consent of the tenant for injuries except in what situations?
- undisclosed dangerous conditions that are known or should’ve been known to the landlord but are not known to the tenant
- a condition is on the property that is dangerous to people outside of the property
– the premises are leased for admission to the public
– parts of the land are kept in the landlord’s control but are available for use by the tenant
– landlord has contracted to repair
– the landlord has been negligent in making repairs
138
What are the three different types of security deposits?
- tenant deposits a sum of money: that the landlord can draw from to make up defaults or pay for damages. Landlord must account for anything he withdraws, and at the end of the tenancy the tenant gets the balance
- deposit that will be forfeited if the tenant defaults: this is essentially liquidated damages
- deposit that is denominated as advance rent: Not a true deposit, just an advance payment of rent that the tenant has the right to have attributed toward rent due at the end of the lease
139
How does the death of either the landlord or the tenant affect a leasehold?
Usually it does not terminate the lease hold, BUT:
– the death of a tenant for years does not terminate the leasehold, instead the leasehold passes as personal property through the tenant’s estate.
– If the parties have agreed otherwise in the terms of the lease, then it can terminate on death
– tenancy at will: the tenancy IS terminated by the death of either party
– if the landlord has a life estate: the lease is void on the death of the landlord
140
If a landlord sells property that has a tenant on it, how does the sale affect the leasehold?
There’s usually no effect on the tenant, unless the lease provides otherwise, except that the tenant now pays rent to the new landlord.
– If the lease says so, the buyer can terminate the lease. Otherwise the buyer steps into the shoes of the original landlord
– if the buyer purchased the property without notice (no constructive notice from recording and no inquiry notice from visiting the property) then his purchase is free of the lease and has a higher priority than the tenant has
– if the buyer knew about the lease, and purchased the property anyway, then he accepted the encumbrance and is bound by it
141
What is the implied warranty of habitability?
When the landlord impliedly guarantees that he will deliver and maintain the premises in a safe, clean, and fit for human habitation condition.
142
How do you prove that a landlord has breached the implied warranty of habitability?
- The tenant must show a defect in an essential residential facility. Majority says the defect can be patent or latent, but some jurisdictions do not include latent.
- The tenant must provide the landlord with notice of the defect, and
– give the landlord a reasonable time to make repairs
143
The implied warranty of habitability only applies to what?
Residential leases, not commercial leases
144
If a landlord breaches the implied warranty of habitability, what does that do for the tenant?
– The tenant is excused from further performance
– the tenant may, but need not, vacate
– tenant can treat the lease as cancelled and it is abated
– tenant can get money damages through either the contract measure of damages: value of premises as warranted less value of premises as received, or difference between the rent agreed and the fair rental value of the premises received.
– Tenant can get reformation or traditional contract or tort remedies
145
What is required in order for a breach of the covenant of quiet enjoyment to occur with regard to a lease?
Every lease expressly or impliedly has this covenant in it where the landlord promises the tenant will not be disturbed during his possession through either actual eviction or constructive eviction.
146
If a landlord breaches the covenant of quiet enjoyment by actual eviction, what happens?
- Majority: The tenant is relieved of all liability to pay rent
- Second restatement: the tenant gets a rent abatement
147
What happens when the covenant of quiet enjoyment has been breached through a constructive eviction of a tenant?
This happens if the landlord substantially and permanently interferes with the tenant’s use and enjoyment of the property, the tenant gives the landlord notice of the problem and a reasonable time to repair it, and the tenant moves out.
Things that could cause this would be the landlord withholding something essential to the full enjoyment of the property or something required by statute, such as heat or running water. Or from the landlord not disclosing latent defects that he knew about at the time the lease was made, not maintaining common areas, not using due care for promised or volunteered repairs, making fraudulent misrepresentations about the condition of the property, etc.
If this happens, the tenant is excused from further performance under the lease and rent is abated
148
What is the key element to a tenant recovering for constructive eviction under the breach of covenant of quiet enjoyment?
The tenant must move out within a reasonable time because his argument is that the landlord or someone else interfered with the beneficial use and enjoyment of the premises in such a serious way that it amounted to an eviction
149
What is the approach to an RAP essay?
– identify if the interest is subject to RAP
– identify the life/lives in being
- Determine whether the interest will vest or fail within 21 years of the life/lives
– treat the part of the gift that violated RAP as void, and leave the rest of the gift intact
150
What are some interests that are not subject to RAP?
– Present possessory estates
– charitable trusts
– resulting trusts
– interests that are fully vested at creation including: reversionary interests, and completely vested remainders
151
What are interests that are subject to RAP?
– Options to purchase land not incident to a lease
– powers of appointment
– rights of first refusal
– interests that are not fully vested at creation including: remainders subject to open, contingent remainders, and executory interests
152
What is necessary to be a measuring life for RAP?
The person must in some way be connected to the vesting of the interest and identified by or through the documents, either expressly or impliedly
153
What is the difference between an express life in being and an implied life in being for RAP?
- Express: the person is named in the document. “O conveys to A for life.“ O and A are express lives in being
– Implied: person is not named in the document, but is implied from it. “To my grandchildren.“ The person’s children are implied lives in being
154
What is the rule for determining whether an interest will vest or fail within 21 years of the life or lives under RAP?
The “might have been rule“ which says an interest violates RAP if there is any chance, however remote, that it might vest more than 21 years after a life in being.
Interests are scrutinized at the time of creation, which is the date the creating instrument takes effect.
– interest created in a deed: creation is the date the deed is delivered
– interest created in a will: creation is the date of the testator‘s death
155
Analyze this hypothetical under RAP:
“To A as long as liquor is not served on the land, and if it is, then to B.“
Because the vesting of the future interest is unlimited, it’s not certain to vest or fail within 21 years of any life in being, so B’s shifting executory interest is void. That means that A is left with a fee simple determinable, and O has a possibility of reverter
156
Analyze this fertile octogenarian scenario under RAP:
O conveys, “To A for life, remainder to A’s children for life, remainder to A’s grandchildren.“
STEP ONE: identify the interests.
- A’s life estate is presently possessory so it is NOT subject to RAP
– The remainder for life in A’s kids is either contingent or subject to open because he is presumed to be able to have more kids, so it IS subject to RAP
– the remainder in A’s grandkids is contingent or subject open, so it IS subject to RAP
STEP TWO: identify the lives in being
– O and A are express lives in being
– even if the kids or grandkids are already born, they are members of an open class so they cannot be lives in being
STEP THREE: figure out if the interest will vest or fail within 21 years of the lives in being
– A’s kids will take or not take at A’s death, so their interest is valid
– A’s grandkids could take more than 21 years after O and A die, so their interest violates RAP
STEP FOUR: treat the part of the gift that violates RAP as void, and leave the remainder of the gift intact
- A keeps her life estate
– A’s kids will take for life after A dies
– the interest in A’s grandkids is void, so O keeps a reversion that will become possessory after A’s kids die
157
Analyze this unborn widow scenario under RAP:
O conveys ”To A for life, remainder to A’s widow for life, remainder to A’s children living at the death of A’s widow.“
Step one: identify the interests that are subject to RAP:
- A’s life estate is presently possessory, so it is not subject to RAP
– the remainder in A’s widow is contingent because there cannot be a widow of a living person, so it is subject to RAP
– the remainder in A’s kids that are living is contingent because of the condition precedent to vesting, so it is subject to RAP
Step two: identify the lives in being
– O and A are express lives in being
– A’s widow is not because she has not yet been identified
– A’s kids cannot be because their class is open
Step three: determine whether the interest will vest or fail within 21 years of the lives in being
- A’s widow will take or not take at A’s death, so her interest is valid
– A’s kids may take more than 21 years after O and A die, so their interest violates RAP
Step four: treat the part of the gift that violated RAP as void, and leave the rest of the gift intact
– A keeps his life estate
– A’s widow will take for life after A days if she survives A
– the interest to A’s kids is void, so O keeps a reversion, which will fall in when A’s widow dies
158
What is involved in the charity to charity rule under RAP as evidenced by this scenario?
O conveys “To A charity for as long as liquor is not served on the premises, but if liquor is served, then to B charity.“
Normally a shifting executory interest in fee violates RAP, because an heir of A could violate the condition more than 21 years after the death of the lives in being.
But for public policy reasons, if both A and B are charities, the shifting executory interest in B charity will be deemed to be valid under RAP
159
How does the uniform statutory rule against perpetuities work?
Some states have adopted this and it says that a non-vested interest in real or personal property is invalid unless:
– it satisfies the common law RAP, or
– it vests or terminates within 90 years of its creation (wait and see test). The court then waits until the end of that 90 year period to determine whether the interest actually vested or failed
160
Analyze this conveyance under both common law RAP and Uniform Statutory RAP:
In 1990, O conveys “To A for life, remainder to A’s kids for life, remainder to A’s grandkids.“ At the time, A is 55 and has one kid, B who is 16. In 1995 B marries. In 2001 B has a child called C. A dies in 2004 at the age of 69. B dies in 2040 at the age of 66.
- CL RAP: The remainder to A’s grandkids is void
| – USRAP: because C actually takes within 90 years of the conveyance, her interest is valid
161
What are restraints on alienation?
Conditions placed on the ownership of real property that restrict free conveyance of the property
162
What are the different restraints on alienation?
– Disabling restraints
– forfeiture restraints
– promissory restraints
– partial restraints
163
What is a disabling restraint on alienation?
This prohibits a person from conveying property. These are always void.
Ie: O conveys land “To A and his heirs so long as they do not sell, mortgage, or transfer the property.“ This is void, so A and his heirs can freely sell, mortgage, and convey the property
164
What is a forfeiture restraint on alienation?
When a person loses his estate if he attempts to convey the land. These are valid for life estates and future interests, but are not enforceable for fee simple estates.
Ie: O conveys land “To A and his heirs, but if he or his heirs ever convey to anyone, then to B and his heirs.“ This is a forfeiture of restraint on a fee simple estate, so it is not enforceable.
Ie: O conveys land “To A for life, then to B and her heirs if A ever sells or transfers the property.“ This is a forfeiture restraint and a life estate, so it is enforceable
165
What is a promissory restraint?
When someone that gets land promises not to convey it. These are valid for life estates and future interests, but they are not enforceable for fee simple estates. This does not void the conveyance, it just makes the promisor liable for breach of contract damages
I.e.: O conveys land “To A for life, then to B and his heirs. A promises not to convey the property during his lifetime.“ This is valid because A has a life estate
166
What does the fair housing act say?
People cannot refuse to sell/rent or discriminate in sales/rental terms to anyone based on: race, color, religion, sex, handicap, familial status/children, or national origin.
People cannot advertise the sale or rental of a building indicating discriminatory preferences
People cannot coerce, threaten, intimidate, or interfere with a person’s exercise of housing rights for discriminatory reasons, or retaliate against anyone that encourages the exercise of those rights
Religious organizations that provide housing for their members are exempt
Intent to violate the act is not needed for someone to prevail under it. The complainant just has to show a disparate impact on a protected group caused by the respondent’s actions. The burden then shifts to the respondent to prove that the practice is necessary to achieve a substantial non-discriminatory interest
167
What are the different ways that the fair housing act can be enforced?
- through HUD (housing and urban development)
– by filing a suit on behalf of the private person affected
– through the United States attorney general
168
How do you enforce a fair housing act violation through housing and urban development (HUD)?
- an aggrieved person must file a sworn complaint with the secretary of HUD within one year of a discriminatory housing practice occurring (or the secretary can file the complaint)
– within 10 days of the complaint being filed, the secretary must notify the complainant and respondent, and the respondent has 10 days to file a sworn answer
– the secretary must complete an investigation within 100 days
– the secretary must encourage the parties to create a conciliation agreement
– if the secretary, based on reasonable cause, believes that a discriminatory housing practice occurred, he must either issue a charge or dismiss the complaint
– if a charge is issued: the complainant can select whether to have an administrative hearing or judicial trial
– at the conclusion of either, if the complainant prevailed, equitable and legal remedies can be given including actual damages, statutory money penalties, attorney’s fees, and costs
– the result of either a hearing or trial can be appealed through the federal court system
169
How can a person enforce a violation of the fair housing act through a private suit?
- An aggrieved person can file suit in federal or state court within two years of a discriminatory housing practice occurring (and needn’t have already gone through HUD)
- if the person prevails in a civil action, they can get actual damages, punitive damages, legal and equitable relief attorney’s fees and costs
170
How can the attorney general enforce the fair housing act?
If he has reasonable cause to believe that a person or group is engaged in a pattern of practice of housing discrimination, he can commence a civil action in federal court to enforce the fair housing act
171
What do you do in applying choice of law with regard to property interests?
– The law of the situs of the property is what is usually applied for all rights in land and immovables. This refers to the whole law of the situs, including its choice of law rules
– validity and effective conveyance are governed by the law of the situs
– mortgages are thought to be so closely related to the land that they are governed by the law of the situs
– the underlying contract or note is usually governed by the law of the place of making because it is thought to be a contract issue (although the second restatement says it should be determined by the law of the situs)
– liens are governed by the law of the situs
