Kaplan MBE Real Property Flashcards
1
Q
What is a Fee Simple Absolute (FSA)?
A
The best type of estate with all possible rights in a parcel of land
FSA is alienable, devisable, and descendible, but may terminate if the owner dies without a will or heirs.
2
Q
How is a Fee Simple Absolute created?
A
Created by language such as ‘to A and his heirs’ (common law) or ‘to A’ (modern law)
This indicates the full ownership rights granted to the recipient.
3
Q
What is a Defeasible Estate?
A
An estate that may terminate upon some happening or event before its maximum duration has run
This includes estates that can end before the owner’s death.
4
Q
What characterizes a Fee Simple Determinable (FSD)?
A
Created by durational language and automatically terminates on the happening of a named future event
Example: ‘O to A for so long as liquor is not served on the premises.’
5
Q
What is a Fee Simple Subject to a Condition Subsequent (FSSCS)?
A
Created by conditional language and requires an express power of termination reserved to the grantor
Example: ‘A to B, provided that in the event the premises are not used for educational purposes, then A has the power to terminate B’s estate.’
6
Q
What happens if the language in a FSSCS is ambiguous?
A
Courts interpret the grant as an attempt to create a FSSCS, which may fail and become a fee simple absolute
This avoids forfeiture of the fee simple estate.
7
Q
What is a Fee Simple Subject to Executory Interest?
A
Created by durational or conditional language where termination occurs on an event that passes property to someone other than the grantor
Example: ‘A to B so long as B farms the property during his lifetime and, if he does not, then to C.’
8
Q
Define Fee Tail.
A
An estate that descended to grantee’s children only, treated as fee simple absolutes in modern law
Example: ‘A to B and the heirs of his body.’
9
Q
What is a Life Estate?
A
An estate that lasts for the duration of the grantee’s life
Example: ‘A to B for life.’
10
Q
What is a Life Estate pur autre vie?
A
A life estate measured by the life of someone other than the grantee
Example: ‘A to B for the life of C.’
11
Q
What is a Term Estate?
A
An estate limited in duration, essentially a landlord-tenant relationship
Examples: ‘A to B for 50 years’ or ‘A to B for 1 year.’
12
Q
What is a Possibility of Reverter?
A
A future interest in the grantor that follows a determinable estate
Example: ‘A to B so long as B farms the land.’
13
Q
What is a Power of Termination?
A
A future interest in the grantor when creating a FSSCS or a defeasible life estate
Must be expressly stated in the conveyance.
14
Q
What is a Reversion?
A
A future interest retained by the grantor when transferring less than a fee interest to a third person
Example: ‘A to B for life.’
15
Q
Define Remainder.
A
A future interest created in a third person intended to take effect after the termination of the preceding estate
Example: ‘A to B for life, then to C.’
16
Q
What is a Contingent Remainder?
A
A remainder that is not vested and has a condition precedent
Example: ‘A to B for life, then to the oldest child of C then living.’
17
Q
What defines a Vested Remainder?
A
A remainder that is created in an ascertainable person and is not subject to any condition precedent, except for the termination of the preceding estate
Example: ‘A to B for life, then to C.’
18
Q
What is a Vested Remainder Subject to Total Divestment?
A
A presently vested remainder that may be terminated on the happening of a future event
Example: ‘A to B for life, remainder to C, so long as liquor is never served on the premises.’
19
Q
What is a Vested Remainder Subject to Open?
A
A remainder made to a class with at least one ascertainable member who has satisfied conditions precedent to vesting
Example: ‘A to B for life, then to the children of C.’
20
Q
When does a class open in an inter vivos conveyance?
A
The class opens at the time of the conveyance
Example: ‘A to B for life, then to the children of C.’
21
Q
What is the Rule of Convenience?
A
The class closes as soon as one member of the class becomes entitled to immediate possession of the property
Example: ‘A to B for life, remainder to the children of C.’
22
Q
Define Executory Interest.
A
A future interest in a third person that cuts short the previous estate before it would naturally terminate
Example: ‘A to B so long as liquor is not served on the premises in B’s lifetime. If liquor is served, it passes to C.’
23
Q
What are the two types of Executory Interests?
A
Shifting Executory Interest and Springing Executory Interest
Shifting: passes from one grantee to another; Springing: transfers from a grantor to a grantee.
24
Q
What is Waste in property law?
A
Determines what someone who owns land can or cannot do with it
Owners of fee estates can do as they please; owners of less than fee estates cannot commit waste.
25
What are the three types of Waste?
* Voluntary Waste
* Permissive Waste
* Ameliorative Waste
## Footnote
Each type has different implications for life tenants.
26
What is the Rule Against Perpetuities (RAP)?
No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest
## Footnote
It limits land from being tied up with contingencies that could last indefinitely.
27
What is the common law Rule Against Perpetuities (RAP)?
No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.
28
What is the purpose of the Rule Against Perpetuities?
To prevent land from being tied up indefinitely with unreasonable contingencies.
29
To which future interests does the Rule Against Perpetuities apply?
* Executory interest
* Contingent remainder
* Vested remainder subject to open
* Purchase option
* Right of first refusal
30
Which future interests are exempt from the Rule Against Perpetuities?
All future interests except for executory interest, contingent remainder, vested remainder subject to open, purchase option, and right of first refusal.
31
Fill in the blank: The Rule Against Perpetuities does not apply to _______.
[present possessory estates]
32
What happens if a future interest is wiped out under the RAP?
The conveyance may be reduced to a fee simple determinable or fee simple subject to condition subsequent depending on the language used.
33
What is a total restraint on alienation?
A condition where property reverts to the grantor if the grantee attempts to sell it.
34
What is a partial restraint on alienation?
A condition that restricts the sale of property but is reasonable in scope.
35
What is tenancy in common?
Each co-tenant owns an undivided possessory interest in the whole of the property.
36
What is joint tenancy?
Each co-tenant owns an undivided possessory interest in the whole of the property and has a right of survivorship.
37
What is the right of survivorship?
If one co-tenant dies, the property automatically passes to the surviving co-tenant.
38
What are the four unities required for a joint tenancy?
* Time
* Title
* Interest
* Possession
39
What is tenancy by the entirety?
A form of concurrent ownership for married couples with undivided interest and right of survivorship.
40
When does severance of a tenancy by the entirety occur?
* Joint conveyance to a third party
* One spouse conveys to the other
* Divorce
41
What happens when a joint tenancy is severed?
It creates a tenancy in common among the remaining joint tenants.
42
What is a partition action?
A legal process where a co-tenant seeks to divide or sell the property.
43
What rights do co-tenants have regarding possession?
Each co-tenant is entitled to possess the whole property.
44
What is the duty of co-tenants regarding profits from the property?
If profits are produced by one co-tenant’s efforts, others have no right to share unless ousted.
45
What is the general rule for expenses among co-tenants?
Each co-tenant must pay a proportionate share of taxes and mortgage payments.
46
What is a term of years lease?
A lease with a definite beginning and end.
47
What is a periodic tenancy?
A lease that continues from period to period without a set termination date.
48
What is a tenancy at will?
A lease with no fixed duration, lasting as long as both parties desire.
49
What is a tenancy at sufferance?
A situation where a tenant remains on the property after the lease term has expired.
50
What is the landlord's liability for rent in a tenancy for years?
The tenant is liable for all unpaid rent in the lease.
51
In a periodic tenancy, when is the tenant liable for rent?
Up until proper notice is given to terminate the lease.
52
What is the tenant's liability in a tenancy at sufferance?
The tenant is liable for the reasonable rental value of the property.
53
What is the effect of a landlord accepting rent from a holdover tenant?
It indicates that the landlord wants the tenant to remain, converting them to a periodic tenant.
54
What is the initial monthly rent for T in the lease?
$1,000 per month
55
If the rental value increases to $1,500 per month, what is T liable for?
$1,500 per month
56
What happens when T holds over after a one-year lease with LL?
Creates a month-to-month tenancy with a rental obligation of $1,000 per month
57
What is a defense a tenant can use to avoid paying rent?
Failure to Deliver Possession
58
In the majority rule, what is the landlord's obligation regarding possession?
Landlord must deliver possession of the property to the tenant
59
Under the minority rule, who is responsible for evicting a holdover tenant?
It is up to the new tenant (T2) to evict the holdover tenant (T1)
60
What constitutes an actual eviction?
The tenant is physically removed from all, or part, of the property
61
What is constructive eviction?
The landlord allows the premises to deteriorate, forcing the tenant out
62
What must a tenant do to claim constructive eviction?
Must move out within a reasonable time after substantial interference
63
What is total constructive eviction?
Defense to the payment of any rent
64
What is partial constructive eviction?
Results in a reduction in rent only
65
What is the common law stance on destruction of leased property?
Did not excuse payment of rent
66
What is the modern law stance on destruction of leased property?
Destruction can be a defense to payment of rent
67
What is the warranty of habitability?
An implied warranty that the premises are fit for habitation
68
What must a tenant do to claim a breach of the implied warranty of habitability?
Provide notice to the landlord and allow reasonable time for repairs
69
What are other defenses a tenant might use?
Impossibility, impracticability, and frustration of purpose
70
What is the landlord's obligation regarding the condition of the premises?
To maintain the premises in a habitable condition
71
What duty does a tenant have to avoid waste?
Avoid voluntary waste and take steps against permissive waste
72
What is the rule regarding the landlord's right to retake property?
Landlord can retake property for tenant's material breach of the lease
73
What is the distinction between an assignment and a sublease?
Assignment transfers all interest; sublease transfers less than entire interest
74
Who is liable for rent in an assignment?
The assignee is liable to the landlord; the original tenant remains liable unless novated
75
In a sublease, who owes rent to whom?
Sublessee owes rent to tenant; tenant owes rent to landlord
76
What is a silent consent clause?
Gives landlord the right to withhold consent for any reason
77
What is the traditional rule regarding covenants that run with the land?
Covenants lead to damages; equitable servitudes lead to equitable remedies
78
What mnemonic can be used to remember the elements for covenants to run with the land?
PINT (Privity, Intent, Notice, Touch and Concern)
79
What happens if a tenant installs a fixture?
Tenant may remove it if it does not affect the premises
80
What is the exception regarding removal of fixtures after lease expiration?
Some jurisdictions allow reasonable time for removal
81
What is the status of a tenant regarding fixtures if they are not a tenant but an adverse possessor?
Fixture rules do not apply; no right to remove the fixture
82
What is the definition of a trade fixture?
Any item used in the course of the tenant’s trade or business
83
What are the four elements required for a covenant to run with the land?
Privity, Intent, Notice, Touch and Concern
## Footnote
Mnemonic: PINT
84
What is horizontal privity?
The relationship between the original covenantor and covenantee
## Footnote
Requires privity of contract in connection with the land.
85
What is vertical privity?
The relationship between an original party to a running covenant and the successor in interest
## Footnote
Privity of estate exists when the holder of the servient estate transfers all interest to the new owner.
86
What must be shown for a restriction to enforce against successors in interest?
Restriction must touch and concern the land, intended to run with the land, and the successor must take with notice
## Footnote
Establish horizontal privity between original parties and vertical privity with successors.
87
What is required for intent in the creation of a covenant?
The writing must include language showing the parties’ intent for the covenant to bind successors
## Footnote
The Statute of Frauds applies.
88
What types of notice must a current owner of the servient estate take with?
Actual Notice, Constructive Notice, Inquiry Notice
## Footnote
Actual Notice is what you know; Constructive Notice is through recordation.
89
What does 'Touch and Concern the Land' mean?
Servient estate must be burdened and dominant estate must be benefited by the restriction
## Footnote
Affects the use and enjoyment of the properties involved.
90
What are the three elements of an equitable servitude?
Touch and Concern the Land, Intent, Notice
## Footnote
Mnemonic: TIN. The Statute of Frauds applies.
91
How can a reciprocal servitude be implied?
By showing a common scheme or plan for development
## Footnote
No writing required; it can be implied.
92
What are some factors to show a 'common scheme'?
* A large percentage of lots expressly burdened
* Oral representations to buyers
* Statements in advertisements
* Recorded plat maps or declarations
93
What are ways to terminate a covenant or equitable servitude?
* Written release
* Merger of estates
* Abandonment
* Estoppel
* Changed circumstances
94
What is an easement?
An interest in the land of another
## Footnote
Checklist includes creation, scope, and termination.
95
What is the difference between an easement appurtenant and an easement in gross?
Easement appurtenant benefits a parcel of land; easement in gross benefits a person or entity
## Footnote
No dominant estate with easement in gross.
96
What are the methods of creating easements?
* Expressly
* By implication
* By prescription
97
What are the requirements for an easement implied by prior use?
* Severance of title
* Prior use existed
* Use was apparent
* Necessary for enjoyment
98
What is an easement by necessity?
Created when there is common ownership then severance and strict necessity for the easement
## Footnote
Applies when access is essential.
99
What is the scope of easements?
An express easement states a specific use; otherwise, it can be used reasonably
## Footnote
Surcharging occurs when the use exceeds reasonable limits.
100
How can easements be terminated?
* Destruction of servient estate
* Merger of title
* Written release
* Abandonment
* Estoppel
101
What is the dominant estate in relation to easements?
The property that benefits from an easement appurtenant
## Footnote
The dominant estate is the land that has the right to use the easement.
102
What happens if A tries to transfer an easement to C?
It is improper because the easement was to benefit Blackacre, not C
## Footnote
A easement is tied to the dominant estate and cannot be severed.
103
What is 'prescription' in the context of easement termination?
Interference with the use of the easement for the statutory period
## Footnote
If the servient estate owner obstructs the easement holder's use for the required duration, the easement may be terminated.
104
What happens when the servient estate is sold to a bona fide purchaser?
The easement may be terminated if the purchaser pays value and takes without notice
## Footnote
This protects the rights of unsuspecting buyers who acquire property without knowledge of existing easements.
105
When does an easement created by necessity end?
When the necessity ends
## Footnote
An easement by necessity is tied to a specific need and ceases once that need is no longer present.
106
What is a profit in land law?
A nonpossessory interest allowing the holder to take something from another's land
## Footnote
For example, logging trees from someone else's property.
107
How can profits be created?
Expressly or by prescription, similar to easements
## Footnote
Profits can be granted through explicit agreements or established through long-term usage.
108
What distinguishes a license from an easement?
A license is a personal right, not an interest in land
## Footnote
Licenses can be revoked and do not convey property rights.
109
What is an example of a license?
Buying a ticket to a sports game, which is revocable
## Footnote
The ticket grants permission to attend but can be revoked by the issuer.
110
When can a license become irrevocable?
When coupled with an interest or when the licensee expends money or labor in reliance on it
## Footnote
Examples include permission to retrieve personal property or improvements made based on the license.
111
What is a fixture?
A chattel attached to land, becoming part of the property
## Footnote
Examples include furnaces or fences that are integral to the land.
112
What determines whether a chattel is a fixture?
The intent to annex it, judged by a reasonable person standard
## Footnote
The reasonable person's perspective is used to assess the owner's intentions.
113
What does zoning regulate?
Use of land, size and height of structures, and open spaces
## Footnote
Zoning laws can dictate what can be built where and how land can be used.
114
What is a Notice of Zoning Violation?
A notice issued when property is out of compliance with zoning codes
## Footnote
The notice may instruct the owner to cease a certain use or modify the property.
115
What is a nonconforming use?
A use permitted to continue despite being generally prohibited in the area
## Footnote
Nonconforming uses cannot be expanded or rebuilt after substantial destruction.
116
What is a variance in zoning law?
Permission to use property in a way forbidden by zoning ordinances
## Footnote
Variances are granted to alleviate specific hardships related to a property.
117
What is the difference between a special use permit and a conditional use permit?
A special use permit is for beneficial uses not zoned for, while a conditional use permit is granted under specific conditions
## Footnote
Both require a public hearing and are intended to ensure compatibility with the area.
118
What are lateral support rights?
The right of a landowner to physical support from adjoining land
## Footnote
Landowners are strictly liable for damages if they fail to provide lateral support.
119
What is the riparian view regarding water rights?
Anyone within the watershed has the right to make reasonable use of the water
## Footnote
This is common in Eastern states where proximity to water sources is key.
120
What does the Statute of Frauds require for real property transactions?
A writing signed by the party to be charged, including property description, parties, price, and conditions
## Footnote
This legal requirement aims to prevent fraudulent claims regarding real estate.
121
What is equitable conversion?
The buyer receives equitable title upon formation of a land-sale contract, while legal title remains with the seller
## Footnote
This principle affects who bears the risk of loss during the contract period.
122
What is marketable title?
Title that is reasonably free from defects in fact and law
## Footnote
Sellers must deliver marketable title at closing unless otherwise stated.
123
What does the merger doctrine state?
Covenants in a land-sale contract merge into the deed at closing
## Footnote
This means buyers cannot assert contract covenants post-closing.
124
What is the difference between a general warranty deed and a special warranty deed?
A general warranty deed covers all defects prior to sale, while a special warranty deed limits liability to the seller's ownership period
## Footnote
Buyers have different levels of protection based on the type of deed received.
125
What does a seller warrant in a general warranty deed?
No defects have occurred during the seller’s ownership of the land.
## Footnote
This warranty protects the buyer if defects arise that were not disclosed before the sale.
126
What are present covenants in general warranty deeds?
Do not run with the land and can be breached only at the time of closing.
## Footnote
The buyer’s successors in interest cannot sue on these covenants.
127
What is the covenant of seisin?
The grantor promises he or she owns the property.
128
What does the covenant against encumbrances guarantee?
There are no encumbrances (visible or invisible) on the property.
129
What is the future covenant of quiet enjoyment?
The grantor promises that the grantee will not be disturbed by a third party asserting a valid claim to the land.
130
What is the warranty in a general warranty deed?
The grantor promises to defend the grantee against any third-party claim.
131
What does the term 'further assurances' refer to in a warranty deed?
The grantor promises to do everything reasonably necessary to perfect the grantee’s title.
132
True or False: The grantee can sue for a breach of a future covenant at any time within the limitations period after the breach occurs.
True.
133
What is the duty of a seller in relation to latent defects in residential homes?
Duty to disclose material latent defects known to the seller but not readily observable and not known to the buyer.
134
What is the implied warranty of quality?
Applies to the sale of new or remodeled homes by builders and developers, covering significant latent defects.
135
What is a mortgage?
An interest in real property designed to secure performance of an obligation, usually repayment of a debt.
136
Who is the mortgagor?
The debtor, the person borrowing the money and issuing a mortgage to the lender.
137
Who is the mortgagee?
The lender or bank receiving the mortgage.
138
What are the two instruments that make up a mortgage?
* Mortgage: Document representing an interest in the land.
* Note: Represents the personal obligation of the debtor to repay the debt.
139
What does 'to follow the note' mean in relation to mortgages?
When the note has been transferred, the mortgage securing it automatically follows to the transferee.
140
What are the creditor’s remedies in a mortgage?
* In Personam: Sue on the note.
* In Rem: Foreclosing on the land through the mortgage.
141
What is a deed of trust?
A deed to the property is given to a third party (the trustee) who holds it until the debt is paid.
142
What is a Purchase-Money Mortgage (PMM)?
A mortgage that covers part or all of the purchase price.
143
How does a recorded PMM affect priority over other mortgages?
A recorded PMM has priority over other types of mortgages.
144
What is a future-advance mortgage?
Any line-of-credit or home-equity loan where money can be borrowed as it is needed.
145
What is an installment land-sale contract?
The buyer pays off the purchase price in installments while taking possession of the land.
146
What happens if a buyer defaults on an installment land-sale contract?
The seller can declare a breach of contract and keep the land and all payments to date.
147
What is the lien theory in relation to mortgages?
The mortgagee receives a lien on the property; the mortgagor retains the right to possess the property.
148
What happens if a buyer takes 'subject to' the mortgage?
The buyer has no responsibility to pay on it, either before or after foreclosure.
149
What is a due-on-sale clause?
Gives the mortgagee the option to require that the entire debt be due upon any transfer.
150
What is a deficiency judgment?
When the foreclosure sale raises less money than the outstanding debt.
151
What does the equitable right of redemption allow a debtor to do?
Redeem by paying off the debt before the foreclosure sale occurs.
152
What is the statutory right of redemption?
Debtor has a limited time following the foreclosure sale to force the buyer to sell the property at the foreclosure price.
153
What is the acceleration clause?
Makes the entire debt become due on the happening of an event, such as default.
154
What is Adverse Possession (AP)?
Legally sanctioned stealing of title to land away from the rightful owner.
## Footnote
The law favors productive use of land.
155
What are the three major components of Adverse Possession?
* Physical
* Mental
* Time
156
What is the physical requirement for Adverse Possession?
Adverse possessor must actually, openly, notoriously, and exclusively occupy the land.
## Footnote
This occupation must be sufficient to put the true owner on reasonable notice of a cause of action.
157
What does the minority rule state regarding taxes in Adverse Possession?
Requires the adverse possessor to also pay taxes on the property.
158
Define the mental requirement for Adverse Possession.
Adverse possessor must occupy the land with sufficiently hostile intent.
159
What are the two ways to satisfy the hostile intent requirement?
* Claim of right
* Color of title
160
True or False: Permission to be on the land destroys hostile intent.
True
161
What is the challenge in a co-tenancy situation regarding Adverse Possession?
One co-tenant can only adversely possess against another by ousting the other co-tenant.
162
What does the majority rule state about encroachment in Adverse Possession?
A mistaken encroachment is sufficient hostile intent.
163
What is the time requirement for Adverse Possession?
The adverse possessor must be on the land continuously for the statutory period, commonly 20 years.
164
What is meant by 'continuously' in the context of Adverse Possession?
It is a question of fact based on the nature of the land and the use to which it is being put.
165
What is tacking in Adverse Possession?
Combining adverse possessors' periods of possession to meet the statutory requirement.
166
What limits the scope of what an adverse possessor can claim?
They can only claim the portion of the land actually occupied.
167
What is the exception to the scope of what an adverse possessor can claim?
If they enter under color of title and occupy a significant portion of the parcel described in the flawed deed.
168
How does an adverse possessor's rights relate to future interests?
They cannot obtain future interests until they become presently possessory.
169
What is a disability in the context of Adverse Possession?
Disability can suspend or toll the running of the statute of limitations.
170
What are the rights of the true owner against an adverse possessor?
Can eject the adverse possessor and collect damages up to the point the statutory period has run.
171
What happens to the adverse possessor's rights once the statute of limitations runs?
The adverse possessor is considered the true owner as of the date they entered the land.
172
What are the three requirements for a valid conveyance by deed?
* Donative intent
* Delivery
* Acceptance
173
What does 'donative intent' refer to in a deed?
The grantor must intend to transfer an interest immediately to the grantee.
174
What presumption exists if the grantor gives the deed to the grantee?
Rebuttable presumption of delivery.
175
What happens if the grantor retains the deed?
There is a rebuttable presumption of no delivery.
176
What is the doctrine of relation back?
Conveyance to the grantee relates back to the date the grantor gave the deed to a third party.
177
What is the typical situation for a death escrow?
The grantor gives the deed to a third party and instructs them to give it to the grantee upon the grantor's death.
178
What is presumed if the transfer is beneficial to the grantee?
Acceptance of the deed.
179
What are the four written requirements of a valid deed?
* Sufficient identification of the parties
* Words indicating intent to transfer
* Sufficient description of the property
* Grantor’s signature
180
What does the contract in a real estate transaction include?
* Time of closing
* Time of possession
* Transfer of keys
* Responsibility for payment of utilities and property taxes
* Items remaining with the property
* Condition seller will leave the property
181
Who typically executes documents at a real estate closing?
The buyer and the buyer's spouse, and the seller and the seller's spouse.
182
What happens if a seller dies before closing?
The decedent’s personal representative must complete the transaction.
183
What is ademption in the context of a will?
If a gift of real estate is not in the testator’s estate at the time of death, the gift is adeemed by extinction.
184
What is the common law rule regarding lapse in wills?
If a beneficiary predeceases a decedent, any gift to the beneficiary fails.
185
What is the presumption in recording acts regarding property claims?
First in time is first in right.
186
What are the three types of recording statutes?
* Race Statute
* Notice Statute
* Race-Notice Statute
187
What does a race statute entail?
The person who records first prevails.
188
What defines a bona fide purchaser (BFP) in a notice statute?
A BFP for value who takes without notice of any other claim prevails.
189
What is required for a mortgagee to be protected under the notice statute?
The mortgage must have been issued at the time of the loan in exchange for the loan.
190
What is the definition of 'paying value' in a property transfer?
Paying value refers to a substantial amount exchanged in a transaction, such as selling a property for $10,000 cash, which is deemed to be paying value.
## Footnote
A nominal consideration, like transferring property for $1, does not constitute paying value.
191
Who is considered a mortgagee in property transactions?
A mortgagee is someone who pays value, having issued a mortgage at the time of the loan in exchange for the loan.
## Footnote
This status is protected under the statute.
192
What is a judgment creditor's position regarding prior conveyances?
A judgment creditor will lose out to prior conveyances and is not protected.
## Footnote
They do not have any priority over earlier recorded interests.
193
What are the three types of notice in property law?
* Actual Notice
* Constructive Notice
* Inquiry Notice
## Footnote
Each type of notice affects the rights of parties in property transactions.
194
What is Actual Notice?
Actual Notice refers to knowledge that a person actually possesses regarding a property or transaction.
## Footnote
It can be obtained through direct communication or observation.
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What does Constructive Notice entail?
Constructive Notice comes through the recording acts, meaning that once a deed is recorded, it gives notice to the world that the property is owned by the grantee.
## Footnote
This type of notice does not require actual knowledge.
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Define Inquiry Notice.
Inquiry Notice arises from information that is learned or could have been learned, prompting a reasonable person to inquire further.
## Footnote
For example, failing to visually inspect a property may constitute inquiry notice.
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What is a Race-Notice Statute?
A Race-Notice Statute invalidates an unrecorded conveyance against a subsequent bona fide purchaser who takes without notice and records first.
## Footnote
This statute emphasizes the importance of recording to establish priority.
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What is a Tract Index?
A Tract Index is a legal description of a tract of land followed by a chronological listing of all conveyances involving that piece of land.
## Footnote
This system provides immediate constructive notice of claims to property.
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What is the Grantor-Grantee Index?
The Grantor-Grantee Index consists of two sets of books where conveyances are recorded: one by the name of the grantor and another by the name of the grantee.
## Footnote
This is the majority system used for recording property transactions.
200
What is the Shelter Rule?
The Shelter Rule provides protection for a subsequent taker who does not satisfy the applicable recording statute by 'sheltering' under the good title of a predecessor.
## Footnote
This means they inherit the protections of their predecessor’s title.
201
What is Estoppel by Deed?
Estoppel by Deed applies when someone transfers title to property they do not own but later acquires title, preventing them from denying the transfer.
## Footnote
This principle protects the interests of the original transferee.
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In a race-notice jurisdiction, who prevails when two parties record their interests?
In a race-notice jurisdiction, the bona fide purchaser (BFP) who records first prevails.
## Footnote
This emphasizes the importance of timely recording in establishing rights.
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What happens if a buyer fails to conduct a visual inspection of the property?
Failing to conduct a visual inspection may result in the buyer being charged with inquiry notice regarding any information that could have been revealed by such an inspection.
## Footnote
This can affect the buyer's claims against subsequent purchasers.
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What is a Wild Deed?
A Wild Deed is a deed that exists outside the chain of title, meaning it does not connect to the current title holder.
## Footnote
Such deeds can create confusion in title searches.
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What is the majority rule regarding title transfer when the transferor does not own the property?
Under the majority rule, if the transferor later acquires the title, they are estopped from denying the transfer to the original transferee.
## Footnote
This protects the rights of the transferee.
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What is the minority rule regarding title transfer and operation of law?
The minority rule states that title automatically passes by operation of law to the transferee when the transferor later acquires the title.
## Footnote
This rule creates a different outcome in disputes over property rights.
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What are the implications if a subsequent person attempts to 'wash' the deed?
A subsequent person may not take advantage of the shelter rule if they attempt to 'wash' the deed by conveying to a third person and then taking a reconveyance.
## Footnote
This is considered a fraudulent act in property law.
