MBE - Property Flashcards
What mortgage interests are extinguished at foreclosure?
Junior mortgage is extinguished
Defeasible Fees
1) Courts won’t find unless clear language (wish, desire, hope, expectation does not create defaceable fee)
2) Cannot absolutely restrain transfer (alienation), unless reasonable and time-limited purpose exists.
If clear or complete restrain => FSA and strike the rest.
Rule Against Perpetuities
Future interest is void if there is any possibility that given interest will vest more than 21 years after the death of someone relevant involved in the deed.
Suspect interests: ONLY
1) contingent remainder
2) executory interest
3) vested remainder subject to open
4 Steps to analyze RAP
1) What is the future interest?
2) What has to to happen for future interest holder to take?
3) Choose a relevant life
4) Determine whether within 21 years after the death of the measuring life further interests holder can take.
Cy Pres
Gives the court a power to reform the transfer deed if it violates RAP, in a way that most closely matches the grantor’s intent, instead of striking the violating part.
Adverse Possession Elements
1) Continuous for the statutory period
- tracking: can add new possessor’s time to the old possessors time if there is some privity and no ouster
- disability: time does not start to run if at he beginning of AP the owner was disabled.
2) Open and notorious
3) Exclusive
4) Hostile
Rights of Co-Tenants
- Use and enjoy the whole (prevention causes actionable wrong of ouster)
- a co-tenant does not owe rent to co-tenant for exclusive possession
- each gets appropriate share from rest to this parties
- co-tenant cannot adversely possess (no hostility)
- carrying costs (tax, mortgage) proportional to ownership
- ——unless one of the them has taken the mortgage before co-tenancy was created.
- repairing co-cowner can demand contribution for reasonable & necessary repairs if gave notice (proportional to ownership interest)
- improvements - not during co-tenancy, but yes during partition (proportional)
- waste: can bring action during co-tenancy
What’s Tenant’s Duty to Repair /Fixtures
Duty to Repair (when lease is silent)
- routine repairs; not responsible for wear and tear
- must not commit waste: destructive (voluntary), neglect (permissive), or enhancement (ameliorative)
- cannot remove a fixture - thing done that objectively shows intent to permanently improve (ex: heating systems, lighting installations, etc) BUT CAN TAKE if removal does not cause substantial harm to premises. OTHERWISE it is a destructive waste: fixtures pass with land ownership.
- if lease says T must maintain in good condition for the duration of the lease => T now can end the lease if property’s destroyed by not T’s fault (hurricanes in Hawaii etc.)
Tenant’s Duty to Pay Rent
- if no pay, L can 1) evict through court, 2) let T stay and sue for the rent (tenancy at sufferance)
- L cannot self-help: forcefully remove T, change locks
- if T leaves before end of lease and stops paying:
> L can treat as surrender - intend to end lease
> ignore that T left and hold responsible for the rent
> Majority view => L MUST mitigate and try to re-lease the place and hold old T responsible for loss in the process.
Landlord’s Duties
- duty to make the place available to T
- implied covenant of habitability
- Implied covenant of quiet enjoyment
> cannot wrongfully evict T
> breach by constructive eviction: S I N G
1) substantial interference by L (action or failure)
2) Notice to L, and failure to correct
3) Goodbye: T MUST VACATE the place reasonable time after L fails to correct - not liable for other tenants’ acts, BUT must not allow nuisance and must control common areas
- not liable for latent defects, as long as she did not know about it.
Implied Warranty of Habitability
- Premises must be fit for basic human dwelling
- residential lease only!
- non- waivable
- what can T do?
1) end lease and move out, but DOES NOT HAVE TO MOVE, can
2) repair and deduct from future rent
3) Reduce rent
4) remain, pay rent => sue for damages
Transferring Lease
Assignment => complete transfer L - T1 - T2 => L and T1 have privity of K, no privity of estate. L and T2 have privity of estate, no K. If T2 cannot pay, T1 is liable
Sublease => transfer of less than the time left in lease. [L - T1 ] then [T1 -SL]. T1 fully liable to L, can go after SL. L cannot go after SL.
Caveat Lessee
Under Tort law, L has NO DUTY to make premises safe.
Exceptions: C L A P S
1) L must maintain common areas
2) L must warn about defects
3) L liable if assumes repairs (starts fixing stuff)
4) public use rule - L leases a huge public space - liable cuz lessee has no time or knowledge to repair big stuff
5) Short-Term lease of furnished place.
What Mortgage destroys Joint Tenancy
Lien Theory does not destroy (majority view on the bar)
Title theory does
Partial Actual Eviction
Partial actual eviction occurs when the tenant is excluded from only part of the leased premises.
if by landlord => T does not have to pay rent
if by paramount owner => has to pay for the part that T still occupies.
implied warranty of habitability
does not apply to commercial property, only residential
Constructive Eviction Elements
This is a breach of the covenant of quiet enjoyment
1) Substantial Interference by L (action or failure)
> premises are inhabitable
2) T’s notice to L, L ignores the notice
3) T vacates within reasonable time
Sublease v assignment
T’s reservation of a right of reentry does not result in a sublease, but rather is still an assignment.
If Landlord transfers his interests, who is liable to Tenant?
A landlord may assign the rents and reversion interest that he owns. The assignee is liable to the tenants for performance of all covenants made by the original landlord in the lease, provided that those covenants run with the land. The original landlord also remains liable on all of the covenants he made in the lease.
A novation substitutes a new party for an original party to the contract. It requires the assent of all parties and completely releases the original party.
Generally, promises to do a physical act, such as maintain or repair the property, are considered to run with the land so L2 is liable.
If T transfers interest in violation of covenant against assignment or sublease…
transfer is NOT void, but the landlord usually may terminate the lease under the lease terms or a statute or sue for damages.
Landlord’s oral consent to waive K provisions
is sufficient
surcharge an easement
if the easement holder uses the easement in a way that exceeds its legal scope, the easement is surcharged.
The servient landowner may enjoin the excess use and possibly sue for damages if the land has been harmed.
However, the easement does NOT terminate by operation of law, nor does such use give the servient owner a power of termination.
Will non use of an easement for a long time terminate it?
No! Need physical act for amendment in addition! t
Easement by necessity (Implication) Location
An easement by necessity arises when the owner of a tract of land sells a part of the tract and by this division deprives one lot of access to a public road or utility line.
The owner of the servient parcel has the right to locate the easement, provided the location is reasonably convenient.
Excess use (having increased clients come in) is surcharge and servant can sue for damages and stop the excess use.
May a grantee be bound by a covenant that does not appear in his deed or chain of title?
Yes! if equitable servitude elements are met (mostly the original is in writing, notice of the covenant, touch and concern, intent)
Note: if not in writing, still may be implied if some notice (actual, inquiry, record) and common scheme!
Type of deed (quitclaim, general warranty) does not matter here.
Can a neighbor sue to enforce a common covenant?
Yes IF subdivision is created with similar covenants in all deeds, and
(i) a common scheme for development existed at the time that sales of parcels in the subdivision began; and
(ii) there was notice of the existence of the covenant to the party sued. (somewhere in the chain of title is enough)
When does an encroachment not render title unmarketable?
- It is very slight (only a few inches) and does not inconvenience the owner on whose land it encroaches;
- The owner encroached upon has indicated that he will not sue on it; or
- It has existed for so long (many decades) that it has become legal by adverse possession (if the state recognizes adverse possession title as marketable).
In contrast, a significant encroachment constitutes a title defect that renders title unmarketable.
Does an existence of easement render title unmarketable?
Exception!
Easements are generally considered encumbrances that render title unmarketable; so if an easement is not provided for in the contract, it usually renders the seller’s title unmarketable.
Beneficial Easement Exception: A majority of courts have held that a 1) beneficial easement that 2) was visible or known to the buyer does not constitute an encumbrance.
What can Buyer do when he discovers the title is unmarketable?
the buyer may NOT sue for damages for breach as soon as the defect is discovered,
he must notify the seller and give her reasonable time to cure, even if this requires extending the closing date, and even if time is of the essence.
If the seller fails to cure the defects, then the buyer may rescind the contract, sue for damages for breach, get specific performance with abatement of the purchase price, or (in some jurisdictions) require the seller to quiet title.
Does adverse possession provide marketable title?
NO! - still B is buying a possible lawsuit, even if he has a great chance to win it
If the seller attempts to rely on adverse possession to show that defects have been cleared, courts traditionally do not favor such an argument, because proof of adverse possession normally rests on oral evidence, which might not be available to the buyer at a later time.
What title does the adverse possessor take?
The title of the moment! (ex: if it’s life estate to A with remainder in B, AP only gets A’s life estate, and B has no right to bring action to stop adverse possession until his interest takes effect.
Does adverse possessor take the land subject to covenants attached to the land?
Depends:
If an adverse possessor uses the land in violation of a real covenant, she takes title free of the covenant EVEN IF she had knowledge of it. But if complied by it, takes subject to covenant.
Does adverse possessor have to pay taxes?
NO! in majority of states this does not matter!
Does an adverse possessor have to use the whole land?
Usually no.
Possession of a part is enough, as long as there is a reasonable proportion between the portion actually possessed and the whole of the unitary tract, and the possessor has color of title to the whole tract.
Usually, the proportion will be held reasonable if possession of the portion was sufficient to put the owner or community on notice of the fact of possession
Not enough - look for facts that land was devised in two, road in the middle, etc, that would not be enough to give notice to others.
Color of Title
Color of title is a document that purports to give title, but for reasons not apparent from its face does not.
Statutory redemption
Statutory redemption is the right of a mortgagor to recover the land after the foreclosure sale has occurred, usually by paying the foreclosure sale price.
About half the states provide a statutory right to redeem for some fixed period after the foreclosure sale has occurred, usually six months or one year.
The amount to be paid is generally the foreclosure sale price, rather than the amount of the original debt. This right extends to mortgagors and, in some states, to junior lienors.
modification agreement - affecting the mortgage priority?
Yes! if the landowner enters into a modification agreement with the senior mortgagee, raising its interest rate or otherwise making the agreement more burdensome, the junior mortgage will be given priority over the modification. Thus, if the first mortgage debt is larger because of the modification, the second mortgage gains priority over the increase in the debt.
In life estate with remainder, who pays for the mortgage in property?
Life estate holder pays the interest (no not commit voluntary/destructive waste), remainder man pays the principal as the future owner.
When is the deed description vague?
Does not have to be exact, can have discrepancies, but must be sufficient to allow for locating the property. Cannot just say, one of the buildings on the east, then it will be considered void due to vagueness.
HOA, Common interest developments etc.
can pass regulations, but must pass reasonable standard = balance the utility need of the regulation and the harm it will cause
Do tenants in common owe fiduciary duties to one another?
NO!
Does a building code violation render a building unmarketable?
NO, however zoning code violations do!
what property rights does the landowner not own?
light, fresh air, views. Violations of these do not create cause of action!
What is not horizontal privity?
2 neighbors agreeing in covenant to not paint the fence. This is not!
Define Horizontal Privity
To show horizontal privity, both parties must have some interest in the property (seller/buyer, lessor/lessee, mortgagor/mortgage)
Define Vertical Privity
To show vertical privity, the successor must have received the entire durational interest that the original grantor had to give.
Owning the whole, and leasing, not enough.
What if Sellor Dies after K but before closing
Seller’s estate has to go through with the sale in accordance to Seller’s will/enstatcy laws. S owns personal property interests (money), B owns real property
If B dies before closure
B owns real property interest => still close with B’s estate
As of what date the title must be marketable?
Until the date of closing Seller has a right to work on fixing issues and delivering marketable title before B ban rescind?
Which 4 phrases create Fee Simple Determinable ?
for so long as
while
during
until
=> possibility of reverter
What phrases create Fee Simple Subject to Condition Subsequent?
in condition that
provided that
however if
but if
=> right of reentry
What future interest does Fee Simple Subject to executory interest create?
executory interest:
O — A, as long as, otherwise to B
Restraint against Alienation
Lesser restraints (anti-sublease etc.) permissible. Complete restraints not allowed.
Life Estate/Life Estate Per Autrave duties
to hold the land for the life of another:
holder responsible for property taxes!
Changes of Conditions Exception to Life Estate Interest Holder
if change in condition has rendered a property uninhabitable = allow life tenant to tear down that structure.
Open Mines Doctrine
we allow life estate holder to continue the projects that were already there when you got it (mining, etc) , but cannot start new projects (start cutting tries) etc.
Can you sell/transfer your future interests (reverter/reentry)?
YES! if you hold a possibility of reverter or right of reentry, YOU CAN SELL THESE INTERESTS AND PASS DOWN BY WILL, ETC.
What does the court do if co-tenant cannot agree on how to use the property (who to allow) etc.
Court may partition the property so each can use a part as they wish.
Does the joint tenancy end if joint tenant agree to together transfer part of the interest?
NO! they hold the remaining as JTs. The people they transferred it to get tenancy in common interest.
What happens of one of the Joint Tenants mortgages her interest in JT?
Lean theory (majority) ===> if 1 JT takes mortgage her interest and pays it dutifully, JT is not destroyed.
Title Theory (minority) ==> if 1 JT mortgages her interest, JT is severed. KILLED and turned into Tenancy in Common.
When is LL liable for latent (secret) defects?
- if the lease is SHOT TERM and FURNISHED premises => LL is liable for such defects.
- usually not liable, unless they knew or should have known!
must disclose though if L knows about defects and L knows that T cannot discover its reasonable inspection
Holdever Tenant?
T that won’t leave after the lease end!
- periodic tenancy is created!
- how long?
> if residential => month to month periodic tenancy
> if commercial => locked into year to year tenancey (cuz more than that would violate SF and would need writing! - what’s the NEW rent?
> if T was notified of a rent increate prior to the end of first lease period, they have to pay the increased lease price. But if T not notified, they continue paying what they have been paying.
Easement in Gross examples
power lines, railways, public parks, etc!
Merger Extinguishes Easement Trap!
make sure if both lands are transferred to the same person, the whole title is transferred (ex: transferring half life estate and half fee simple to the same person will not extinguish that easement. because not a merger!)
How can you get rid of a restrictive covenant on a common development scheme?
There must he CHANGED NEIGHBORHOOD CONDITIONS which have made the property unusable in accordance with the covenant for ALL OF THE RESIDENCES! All or Nothing.
When is the description of the property (always) adequate in the deed
When it includes an actual address (even if the directions are wrong)
What is a fixture?
commercial v. residential
Residential => How much damage would be caused to the property of the thing is removed? The more damage, the less likely you will remove.
Commercial => trade fixtures doctrine. We allow commercial tenant to remove all trade fixture prior to the lease expiring.
EXCEPTION: cannot remove structural additions - balcony, etc. | also, have to pay for damages because of removal
When can a non-BFP win in a notice jurisdiction?
if he got it from a BFP! - shelter rule
