MBE Practice Exam 1 - Real Property Flashcards
How long does a party still have present possessory interest in real property that was transferred to them as a fee simple subject to a condition subsequent?
A fee simple subject to a condition subsequent (FSSCS) is a type of defeasible fee that is created through specific conditional language—e.g., “but if,” “unless,” “provided that.” Upon the occurrence of the specified condition, the grantor (or the grantor’s successor in interest) has the right to reenter and terminate the FSSCS if this right was explicitly retained in the conveyance. But an FSSCS will not terminate until the grantor exercises this right—termination is not automatic.
What can a co-tenant collect from other co-tenants and what can it not?
It can collect:
-> contribution from the other cotenants for paying more than his/her portion of necessary or beneficial operating expenses (e.g., taxes).
BUT
-> A cotenant in sole possession can collect only for the amount that exceeds the property’s rental value.
It can’t collect:
-> rent from one cotenant even if that cotenant is the only person making use of the property
-> costs made for repairs to the poprety even if necessary UNLESS there was an agreement in place
What happens when all joint tenants execute the mortgage?
The mortgagee can foreclose on all joint tenants and the entire property.
What damages can a landlord get against a tenant when the tenant stops paying rent?
A landlord can sue a tenant for damages when, as here, the tenant breaches the duty to pay rent.
In determining the landlord’s damages, the majority rule is that the doctrine of anticipatory repudiation does not apply to leases. This means that the landlord is not entitled to damages for future rents that would have been due under the lease. The landlord is only entitled to rental payments as they become due.
Does the right of first refusal fall under the rule against perpetuities?
If so, when does it not fall under RAP?
Under the common-law Rule Against Perpetuities (RAP), specific future interests are valid only if they must vest or fail by the end of a life in being plus 21 years.
A right of first refusal is one type of future interest that is subject to common-law RAP unless the right was granted in a lease to a current leasehold tenant.
Does rule against first refusal always need a life to be measured against? What happens if there is no life?
No.
The fact that there is no life in being against which the right of refusal can be measured means that the applicable RAP period would have been 21 years from the date the interest was created.
What files must the mortgagee file in order to have a properly recorded mortgage?
The bank was required to record only the mortgage, which represents a property interest in the residence.
The other loan documents (e.g., promissory note) reflect the personal obligation of the individual and need not be filed for the bank to enforce the mortgage.
How does a notice statute work? When does a purchaser for value prevail?
Competing property interests are prioritized according to the jurisdiction’s recording act. Under a notice statute (as seen here), a purchaser for value need only have purchased without notice of the prior interest to prevail. There are three types of notice:
-> actual – when a purchaser has direct, personal knowledge of a prior interest
-> constructive (i.e., record) – when notice is given through proper recording of a prior interest
-> inquiry – when a reasonable investigation would have disclosed the existence of a prior interest
Can an easement still be enforced under a notice statute if the only way the buyer could have known of the easement is through inquiry notice (investigating the property)?
Yes.
An easement is like any other real property interest, and does prevail under record statutes even if it wasn’t recorded (no actual or constructive notice) as the existence of the easement could be found via inquiry notice.
How does the doctrine of lapse work?
Under the common-law doctrine of lapse, a devise of real property will fail if the beneficiary dies before the testator and no alternate beneficiary is named (meaning it goes back to testator and becomes part of the residuary estate) —unless the testator indicates a clear intent that the devise is to survive the beneficiary’s death.
Does a modification of a mortgage impact the mortgage’s priority?
Modification of a senior mortgage (or the obligation it secures) generally has no impact on the senior mortgagee’s priority over junior mortgages or liens.
HOWEVER, a modification that materially prejudices a junior interest (e.g., increase in interest rate meaning the senior interest would get more money than what the junior interest initially though) will subordinate the senior mortgagee’s interest only as to the modification. The senior mortgagee’s original interest will therefore remain superior to the junior interest.
Who does a purchase-money mortgage holder have superior interest to?
However, purchase-money mortgages (PMMs)—i.e., mortgages granted to (1) the seller of real property or (2) a third-party lender to the extent that the loan proceeds are used to acquire title to the real property*—are excepted from that general rule. A PMM instead has superpriority over all other liens that arose before it—regardless of whether the PMM or those liens were recorded.
Can an easement appurtenant be used to benefit another property other than the dominant estate?
No.
The individual granted the corporation an easement appurtenant* across the individual’s undeveloped land. An easement appurtenant is a nonpossessory right to use another’s land (servient estate) that benefits the easement holder’s land (dominant estate). Unless otherwise stated, an easement appurtenant cannot be used for the benefit of property other than the dominant estate.
