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Property > MBE One Sheets > Flashcards

MBE One Sheets Flashcards

1
Q

REAL ESTATE CONTRACTS:

First Step

A

General rule: a K must be:
(1) be in writing,
(2) be signed by the party to be charged, and
(3) contain essential terms (including identity of parties, price, & description of land).

A part performance exception exists if the claimant does 2/3:
(1) takes possession,
(2) makes payment in full of a substantial part of the price, or
(3) substantially improves the land.

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2
Q

First step cont.

A
  • Negotiating K: persons such as brokers, real-estate agents, or attorneys can negotiate Ks if they are in an agency relationship & have legal capacity to do so.
  • Payment: If a real-estate broker & seller enter into an exclusive agency agreement, broker obtains a commission only if his agent is cause of sale.
  • If parties enter into an exclusive right to sell agreement, then broker is paid no matter who finds buyer—even if it is seller herself.
  • Disclosure: Seller of home does not have to disclose defects unless (1) they are not obvious, (2) he knows/should know of them, & (3) defect is serious.
  • However, seller** cannot **actively conceal defects.
  • Warranty: for new homes sold by a builder-seller, there is an implied warranty of fitness.
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3
Q

2. K must satisfy/exclude

Warranty of marketable title.

A
  • Marketable title is one “reasonably free from defects.”
  • Must be given on closing day (but one can pay off a mortgage w/ proceeds of a sale).
  • What makes title unmarketable? (DEVA)
    1. Defect in chain of title
    2. Encumbrance (mortgage/easement not mentioned in K)
    3. Violation of a zoning ordinance
    (4) Title acquired by adverse possession

Tip: a violation of a housing/building code does not render title
unmarketable.

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4
Q

3. Once K is Signed:

Legal & Equitable Title Split.

A
  • Equitable title passes to buyer.
  • Buyer’s interest is in the real property, so if something happens to the real property after K is signed (tornado destroys property), risk of loss is on buyer.
  • Legal title remains w/ seller.
  • Seller’s interest is the money (personal property) that seller will get from the sale.
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5
Q
  1. Closing occurs.
A
  • Deed must be executed & delivered!
  • Execution : deed identifies the parties, has words of grant, is signed by seller, & describes land.
  • Delivery : intent to pass title presently.
  • Delivery is presumed to have if deed is in grantee’s possession /if it is recorded.

Execution: IP, WG, SS, DL

Tip: marketable title must be given on closing date (not before).

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6
Q

5. Once Delivery Occurs:

Buyer Can Only Sue on Deed!

A
  • Quitclaim deed: no warranties.
  • Warranty deed: 6 covenants:
  • (1) PRESENT (SEC) covenants of right to convey, seisin, no encumbrances
  • (2) Future (FEW) covenants of further assurances, quiet enjoyment, & warranty.
  • Merger occurs, so now buyer can ONLY SUE on the deed! He can no longer sue on the K.
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7
Q

RECORDING ACTS

A
  • CL: First in time, first in right. One does not need to record one’s interest to have title.
  • However, recording acts have the power to change CL result.
  • Notice act: a subsequent bona fide purchaser (BFP) for value w/o notice can obtain title that is superior to that of someone who received property before him.
  • Race-notice act: A subsequent BFP for value without notice who records first can obtain superior title.
  • Notice can be (AIR): actual, inquiry, or record notice.
  • Purchasers: Mortgagees & those who pay consideration are purchasers. Donees, heirs, & judgment lien creditors are not purchasers.

Tip: If you are given a statute to apply, look for the words “without notice” and “first records” to indicate a race-notice act. A notice act will look similar but will not have any language about recording first.

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8
Q

Recording Acts:

Shelter rule exception:

A
  • Allows traditional grantees who are not protected by recording act to prevail by sheltering under rights of those who conveyed the land to them.
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9
Q

Recording Acts:

Forged Deed & Defective Documents:

A
  • Forged deeds & defective documents do not give notice, so BFPs who receive these are not protected by recording acts.
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10
Q

Recording Acts:

Estoppel by deed:

A
  • If grantor transfers property to grantee (when he does not have title to the property) by warranty deed & then later acquires title, title will automatically go to grantee unless grantor later gave land to a BFP.
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11
Q

Recording Acts:

Title insurance

A
  • Purchaser’s protection against **unknown ** defects of record in chain of title.
  • It is not required unless contractually agreed upon.
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12
Q

ADVERSE POSSESSION AND TRANSFER
BY OPERATION OF LAW OR BY WILL

A
  • Adverse possession requirements (CHANGE):
  • Possession must be:
  • (1) continuous,
  • (2) hostile,
  • (3) actual,
  • (4) open & notorious,
  • (5) it must go on for statutory period (20 years), and
  • (6) be exclusive.
  • Tacking is permitted.

Note: if true owner has a disability (JIM: jail, insane, minor) at time adverse possessor enters, statutory period is tolled (paused) until disability is lifted.

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13
Q

ADVERSE POSSESSION AND TRANSFER

BY OPERATION OF LAW OR BY WILL

Transfer by Will Concepts:

A
  • If property is specifically devised but testator does not own it when he dies, gift adeems (fails).
  • There are exceptions (ex. if insurance proceeds were paid after death, beneficiary will take those).

Note: if beneficiary dies b/f testator, gift will lapse (unless jurisdiction has an antilapse statute that saves the gift).

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14
Q

ADVERSE POSSESSION AND TRANSFER

Exoneration:

A
  • At CL, if a testator makes a specific devise of real estate that is subject to a lien, devisee is able to have lien exonerated & paid off by testator’s residuary estate. (Most states have abolished this doctrine.)
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15
Q

MORTGAGES AND SECURITY DEVICES

A
  • A mortgage indicates existence of a debt.
  • Mortgagor: debtor.
  • Mortgagee: usually is a bank who lends money.

Tip: remember “It’s better to be the mortgagee” if you mix up these terms

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16
Q

Transfer by the mortgagor

A
  • If mortgagor gives away her interest “subject to” the mortgage, original mortgagor is liable on the mortgage.
  • If new transferee “assumes” the interest, both the original mortgagor and new transferee are liable.
  • If there is a novation, then only the new transferee is liable.

Tip: remember the new party “assumes” liability as well.
Note: due-on-sale clauses (if mortgagor transfers interest in land w/o mortgagee’s consent, the full loan balance is due immediately) are enforceable.

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17
Q

Lien Theory and Title Theory

A
  • Lien theory (majority of states): mortgagee only has a lien on the land.
  • Title theory (some states): title is transferred to the bank right away upon loaning the money.
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18
Q

Foreclosure:

A
  • Bank can begin foreclosure proceedings upon default.
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19
Q

Equity right of redemption:

A
  • Allows a debtor to redeem the property by paying everything due under the mortgage agreement prior to foreclosure.
  • This right cannot be waived in the mortgage/deed of trust but may be waived later for consideration.
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20
Q

Acceleration clauses:

A
  • States entire balance is due if a payment is missed, & it is enforceable.
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21
Q

Other ways to discharge a mortgage:

A
  • Full payment/mortgagor can give a deed to mortgagee in lieu of foreclosure.
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22
Q

Who gets paid first in a foreclosure proceeding:

A
  • Party that forecloses & anyone “junior” to it is paid off in order of priority.
  • All junior parties must be parties to the proceeding.

Note: a purchase money mortgage (PMM) (when money loaned is used to purchase the property) is senior to a non-PMM.

23
Q

Increasing amount due:

A
  • If a mortgagee voluntarily increases amount due under a mortgage, the increase in debt becomes junior to existing mortgages.

Note: Does not apply if the increase was a mandatory future advance.

24
Q

Redemption after foreclosure:

Statutory Right of Redemption:

A
  • Allows debtor to get property back after foreclosure sale by paying full purchase price w/in a period of time (ex. six months).
25
Q

Other types of security devices

A
  • Includes an absolute deed as security (parties don’t call it a “security interest” but one essentially gives a deed as security), a deed of trust (similar to a mortgage, but a trustee proceeds with foreclosure), & an installment land K (one pays off land in a “lease” & gets title to the land once all payments are made).
26
Q

Present Interests:

Fee simple absolute:

A
  • Ex.: “To A” or “To A and her heirs.”
  • “A” has estate forever.
  • A total restraint on transfer of ownership is not permitted, but limited conditions & rights of first refusal are permitted.
27
Q

Present Interests:

Life estate

A
  • Ex.: “To A for life.”
  • Life tenants must pay taxes, pay interest on the mortgage, and make repairs.
  • Life tenants cannot commit waste.
  • Restrictions on alienation (transfer) are permitted.
28
Q

Present Interests:

Fee simple determinable (FSD)

A
  • Ex.: “To A for so long as A is in college.”
  • A has a FSD. O has a possibility of reverter
  • Measured by time
  • Magic words of creation (SUWD): so long as, until, while, and during
  • This estate ends automatically when time period ends.

FSDPOR

29
Q

Present Interests:

Fee simple subject to condition subsequent (FSSCS)

A
  • Ex.: “To A but if A smokes, O reserves a right of entry.”
  • A has a FSSCS. O has a right of entry.
  • Conditional; measured by occurrence of an event
  • Magic words of creation: a right of entry must be reserved for the owner (O) (usually you’ll see “conditional” words: “but, if, upon condition…”).
  • Estate ends when O enters.

Tip: if you see FSD and FSSCS language, there is a preference for a court to find a FSSCS.

30
Q

Present Interests:

Fee simple subject to executory interest (FSSEI)

A
  • Ex.: “To A but if A smokes, to B.”
  • A has a FSSEI & B has executory interest.
  • You will see durational/conditional language, but it will go to party B instead of back to O.
31
Q

Future Interests:

A
  • Held by grantor: right of entry, possibility of reverter, & reversion
  • Held by grantee: executory interest & remainder
32
Q

Future Interests:

Remainder:

A
  • usually follows a life estate.
  • A remainder is vested when remainderman is ascertained & it is certain to become possessory.
  • It is contingent when remainderman is (UUU) unborn, unascertained, or if it is uncertain to vest due to a condition.
33
Q

Future Interests:

Executory interest (EI)

A
  • Shifting: when B divests a 3rd party of his interest.
  • Springing: when B divests O of his interest.

  • Shift: 3
  • Spring: O
34
Q

Concurrent Estates:

JOINT TENANCY (JT)

A
  • Creation: (TTIP) time, title, interest, possession, plus express language needs to be used (ex. “as joint tenants with a right of survivorship”).
  • Joint tenants have a right of survivorship.
  • Destruction: It can be partitioned.
  • Or, it can be severed by (GSAM) giving it away, signing a K of sale, an actual judicial sale by a creditor, or granting a mortgage in a title theory state.

Tip: one cannot give a JT interest away by will.

35
Q

CE: TENANCY IN COMMON

A
  • Creation: Only the right to possess the whole is needed.
  • No survivorship right.
36
Q

CE: TENANCY BY THE ENTIRETY

A
  • Creation: Similar to a JT but parties must be married.
  • It can only terminate by death, divorce, mutual agreement, or a mutual creditor of both executing on its interest.
37
Q

CE: RELATIONS AMONG COTENANTS

A

(1) Possession: each tenant may possess the whole.
(2) Profits: In general, a cotenant does not have to share profits that he makes through his own efforts from the land.
- Exceptions: if there is ouster, depletion of natural resources in a way that decreases the value of the land, or lease to 3rd party.
(3) Right to contribution: for taxes, mortgage payments, & necessary repairs

38
Q

LANDLORD AND TENANT:

TYPES OF TENANCIES

A
  • Term for years: a tenancy for a* specific period of time*
    (not necessarily “years”).
  • Periodic tenancy: tenancy without a specific end date.
  • Tenancy at will: a tenancy that either party may terminate without notice.
  • Holdover tenancy: a tenancy that occurs when a tenant stays past the end date of his lease.
39
Q

LANDLORD AND TENANT:

RIGHTS AND DUTIES

A
  • Tenant must pay rent & not commit waste.
  • Landlord can require a security deposit.
  • There is an implied warranty of habitability for *residential property *where landlord must keep property in habitable condition.
  • Landlord can **constructively evict ** a tenant if there is something that renders *premises unusable, landlord fails to act after notice, & tenant leaves. *

  • Tip: tenant must actually leave to win an eviction action.
  • Premises unusuable, fail to act after notice, tenant leaves
40
Q

LANDLORD AND TENANT:

ASSIGNMENT VS. SUBLETTING

A
  • Assignment: When tenant assigns his entire interest, he is liable on the lease under privity of K.
  • Assignee is liable under privity of estate.
  • Sublease: When tenant rents his land to a sublessee but has some interest left, sublessor is liable on the lease under privity of K & estate.
  • Sublessee is not liable to the landlord on the lease (but may be sued by sublessor).

Tip: nonassignment & nonsublease clauses are enforceable, but they are strictly construed & courts will try to find a waiver.

41
Q

LANDLORD AND TENANT:

TERMINATION

A

(1) Eviction: if tenant does not pay rent, landlord can evict tenant from property.
(2) Surrender: If tenant does not pay rent but has abandoned the property, landlord can treat it as surrender. This excuses future rent obligations.
(3) Duty to mitigate: Landlord must try to mitigate damages by re-renting the land. (Note: this duty did not exist at common law.)

42
Q

RULES AFFECTING THESE GIFTS:

Class gifts

A
  • Class gifts are gifts to unnamed persons.
  • Unless otherwise stated, the class closes when any member of the class can call for a distribution.
43
Q

RULES AFFECTING THESE GIFTS:

Cy pres

A
  • When a gift to a charity fails, the court may reform it to
    match donor’s intention.
  • There are 3 considerations:
  • (1) there must be property (or money) given for a charitable purpose;
    (2) it must be impossible, impracticable, or illegal to carry out the purpose; and
    (3) the settlor must have manifested a general intent to devote the property to a charitable purpose.
44
Q

RULES AFFECTING THESE GIFTS:

Rule against perpetuities

A
  • No interest is good unless it must vest, if at all, not later than 21 years after a life in being at the creation of the interest.
  • Statutory reforms: the Uniform Statutory Rule states that an interest is good
  • (a) if it is valid under CL, or (b) if it vests/terminates within 90 years after its creation.
45
Q

RULES AFFECTING THESE GIFTS:

The Fair Housing Act

A
  • Bars discrimination based on race, ethnicity, religion, national origin, gender, & disability in the sale/rental of a dwelling.

Not age

46
Q

RULES AFFECTING THESE GIFTS:

Conflict of Laws—general rule:.

A
  • The law of the situs (“the place where property is located”) controls
47
Q

FIXTURES, ZONING, AND ASSOCIATIONS:

Fixtures

A
  • A fixture passes w/ real property.
  • Look at the intent to make the item a fixture & the following (DAMN) factors:
    (1) Damage removal would cause,
    (2) Adaptation of item to realty,
    (3) Manner in which it is attached, &
    (4) Nature of the item.
  • Trade fixtures are chattels that are used in business. They are not considered fixtures.
48
Q

FIXTURES, ZONING, AND ASSOCIATIONS:

Zoning

A
  • States may enact zoning regulations.
  • Variance: a variance from an ordinance may be granted if property owner shows he has a unique hardship.
  • Preexisting uses: Many zoning ordinances protect a preexisting use. But, as soon as that property is sold to a new party, the preexisting use no longer is protected.
49
Q

FIXTURES, ZONING, AND ASSOCIATIONS:

Property Associations

A
  • Owners of lots agree to contribute to the support of common property.
  • In order to create it, there must be a master deed & privity between* original purchasers & developer*.
  • Restrictions generally carry a presumption of reasonableness & usually are enforced.
50
Q

RIGHTS IN LAND:

REAL COVENANTS

A
  • The following is needed to enforce a covenant (PINT):
  • (1) Horizontal & vertical privity (only vertical is needed for the benefit to run),
  • (2) Intent for covenant to run,
  • (3) Notice of covenant, &
  • (4) It must touch & concern the land (make it more valuable).
  • Remedy is money damages.
51
Q

RIGHTS IN LAND:

EQUITABLE SERVITUDES

A
  • Everything above is needed except privity.
  • Remedy: injunction.
  • Equitable defenses are available (ex. laches, unclean hands).
52
Q

RIGHTS IN LAND:

EASEMENTS

A
  • Creation: There are 4 methods of creation:
    (1) Express: signed writing is required.
    (2) Implied by prior use: common apparent use by a landowner who subdivides land.
    (3) Implied by necessity: land is landlocked.
    (4) Prescription: One uses the land openly, notoriously, continuously, & w/o permission from owner for statutory period of time.
  • Transfer: Dominant estate passes automatically. Servient estate passes only if the new owner has notice of the easement.
  • Use: reasonable development is permitted but easement must be used for its original purpose.
  • Termination: An easement can terminate in one of the following ways:
    (1) Merger (if one owns the dominant & servient estate, easement ends)
    (2) Release (a signed writing)
    (3) Abandonment (act + intent to abandon; tip: mere nonuse is not enough)
    (4) Estoppel (a statement by dominant estate holder & reliance by servient estate holder)
    (5) Prescription (easement is blocked for statutory period)
    (6) End of necessity (this applies only for an easement by necessity)
53
Q

RIGHTS IN LAND:

LICENSES

A
  • A license can be created orally.
  • It is revocable at will unless coupled with an interest or reliance.
54
Q

RIGHTS IN LAND:

PROFITS

A
  • Profit: Right to go onto land & take a resource away (ex. wood, coal, etc.).

Property (20 decks)

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