MBE Property MC

Question 1

Life tenant’s duties

Answer 1

Charges, waste, repairs (can’t waste reward)

• Duty to pay current charges (Life tenant must pay all current charges due during life tenancy (eg, property taxes, mortgage interest) up to financial benefit received from property)
• Duty to prevent waste (Life tenant must prevent affirmative waste (ie, voluntary waste), permissive waste & ameliorative waste)
• Duty to make ordinary repairs (Life tenant must make reasonable repairs to preserve property)

Question 2

How calculate how much pay in taxes for life tenant?

Answer 2

duties include paying ordinary taxes on the real property, but only to the extent that the life tenant receives a financial benefit from the property.

The financial benefit is determined differently depending on whether the life tenant:
- occupies the property – measured by the fair market rental value of the property (e.g., reasonable rental value) or
- does not occupy the property – measured by the income derived from the land (e.g., third-party rental income, crops grown on the land)

Question 3

If there’s life estate and person with remainder, life estate holder doesn’t pay taxes - does remainderman have to pay?

Answer 3

holder of a remainder interest may pay the taxes to protect that interest—but has no duty to the life tenant to do so.

The remainderman can then sue the life tenant for taxes paid, not to exceed the value of the financial benefit that the life tenant received from the property.

Question 4

How can joint tenancy be severed?

Answer 4

A joint tenant can sever the joint tenancy by conveying his/her interest during life to another, thereby creating a tenancy in common.

But a joint tenant cannot devise his/her property interest and it will not pass by intestacy because, at death, the joint tenant’s interest ceases to exist and is automatically absorbed into the surviving joint tenants’ interests.

Question 5

defeasible fee (def)

Answer 5

a fee simple estate that may be terminated upon the occurrence of a stated event or condition.

has the potential to last forever

Question 6

if fee simple subject to a condition subsequent and condition occurs, what happens?

Answer 6

If the stated condition occurs, then title will automatically pass to the future interest holder.

If the future interest is held by a third party (as opposed to the grantor), then the estate is called a fee simple subject to an executory limitation.

If future interest held by grantor = Grantor’s right of entry

Question 7

fee simple subject to an executory interest (def)

Answer 7

a present estate limited by durational or conditional language.

Upon the occurrence of the specified event or condition, title automatically passes to a third party who holds a future, executory interest.

Question 8

Fee simple determinable language and future interest

Answer 8

Durational

• Grantor’s possibility
  of reverter
• Third party’s
  executory interest (auto)

Question 9

fee simple subject to a condition subsequent - language

Answer 9

conditional

Question 10

A remainder is a future interest that follows what present possessory estate?

Answer 10

Life estate

Question 11

Remainder types

Answer 11

Vested + Contingent

Question 12

What is vested remainder?

Answer 12

An interest that is given to an ascertained grantee (IDed person); AND

Not subject to a condition precedent

Question 13

restraint on alienation (def and types)

Answer 13

A restraint on alienation is a provision that restricts the transferability of real property.

Disabling restraint
Forfeiture restraint
Promissory restraint

Question 14

direct (or absolute) restraints on alienation are ______. partial restraint is generally valid if ____.

Answer 14

Void

for a limited time and a reasonable purpose

Question 15

Disabling restraint (def and validity)

Answer 15

Prohibition on transfer of property interest by its owner

Always void

Question 16

Forfeiture restraint (def and validity)

Answer 16

Restraint where owner forfeits property interest if owner attempts to transfer it

Restraint on future interest or life estate can be valid

Question 17

Promissory restraint

Answer 17

Promise by property-interest holder not to transfer property interest

Can be valid

Question 18

Does RAP apply to leases?

Answer 18

No

Question 19

A right of first refusal is a partial restraint on alienation that, if reasonable, is valid and enforceable by an injunction. This right is generally reasonable if…

Answer 19

the holder of the right can purchase the property under the same terms offered to another party.

Question 20

A landlord and tenant have a legal relationship based on

Answer 20

privity of K and privity of estate

Question 21

privity of estate

Answer 21

landlord and tenant’s successive right to possess the property (i.e., the tenant’s current right of possession is immediately followed by the landlord’s future right of possession).

Question 22

Assignment (def and privity)

Answer 22

Assignment is a complete transfer of a tenant’s interest to a third party (assignee) for the remainder of the tenant’s lease term (as seen here)

• the original tenant retains privity of contract and remains liable for all covenants in the lease (e.g., rent) and
• the assignee gains privity of estate and becomes liable to the landlord for the rent and any other covenants in the lease that run with the lease.

(both original tenant and assignee are jointly and severally liable - landlord can cover from first and/or second but must try to mitigate)

Question 23

If sublease - privity with landlord?

Answer 23

second tenant has privity of K and estate

Question 24

Types of Tenancies (term)

Answer 24

• Term of Years
• Periodic Tenancy
• Tenancy at will
• Tenancy at sufferance

Question 25

Term of years - creation, duration, termination

Answer 25

Agreement (ie, lease)

• Fixed period (eg, one month, three years)
• End of term (automatic)
• Breach of certain covenants (eg, rent, habitability)

Question 26

Periodic tenancy - creation, duration, termination

Answer 26

• Agreement
• Presumed when lease has no specified termination date
• Operation of law (eg, holdover tenant)

Periodically renews until terminated

• End of period (proper notice)
• Breach of certain covenants

Question 27

Tenancy at will - creation, duration, termination

Answer 27

• Agreement
• Implied when person allowed to possess premises without paying rent

Indefinite period
At any time (reasonable notice)

Question 28

Tenancy at sufferance - creation, duration, termination

Answer 28

Implied when tenant keeps possession after lease expires (ie, holdover tenancy)

Continues until terminated

• Landlord evicts
• Tenant vacates
• Landlord accepts rent (forms periodic tenancy)

Question 29

Acquiring title by adverse possession

Answer 29

ECHO

Exclusive – physical presence on land not shared with owner

Continuous – presence is continuous & uninterrupted for statutory period

Hostile – possession is without owner’s consent

Open, notorious & actual – possession is apparent or visible to reasonable owner

Question 30

for adverse posession, what if the land was slowly acquired bit by bit?

Answer 30

Possession of the land in question need not be acquired at a single time

Question 31

Shelter Rule

Answer 31

Under the Shelter Rule, a person who receives a property interest from a BFP is entitled to the same protection under the recording act as the BFP.

This is true even if that person would not otherwise be protected by the recording act because the person acquired title to the property by gift, intestate succession, or devise (i.e. not bona-fide purchaser or recorded first)

Question 32

In a race-notice jurisdiction, a purchaser has priority over another’s earlier property interest if the purchaser:

Answer 32

is bona fide (i.e., a BFP or innocent purchaser for value) because the purchaser obtained an interest in the property without notice of the earlier interest

and

recorded first.

Question 33

estoppel by deed doctrine

Answer 33

Under the “estoppel by deed” doctrine, a grantor who conveys an interest in land by warranty deed before actually owning it is estopped from later denying the effectiveness of that deed. When the grantor acquires ownership of the land, the after-acquired title is transferred automatically to the prior grantee.

Question 34

equitable servitude (def)

Answer 34

An equitable servitude is a promise to do or not do something on land that is enforceable at equity by injunction.

Question 35

equitable servitude enforceable if:

Answer 35

if it meets the following requirements:

Writing – servitude is in a writing that satisfies the statute of frauds (here, the deed from the man to the developer)

Intent to run – promising parties intended for the servitude to bind their successors in interest (here, the deed says “heirs and assigns”)

Touch and concern – servitude relates to the use, enjoyment, or occupation of the dominant and servient estates (here, the servitude restricts land use to single-family residences)

Notice – person to be bound had actual, record, or inquiry notice of the servitude (here, the woman and subsequent purchasers have notice from the developer’s properly-recorded deed).

***However, it can only be enforced by the original parties or their successors in interest.

Question 36

easement by necessity will be implied if there is …

Answer 36

Necessity – the dominant (benefited) estate is virtually useless without an easement across the servient (burdened) estate

Common ownership – the dominant and servient estates were under common ownership in the past (i.e., they were once a single tract of land)

Severance – the necessity arose when the land was severed and the dominant and servient estates were created

Question 37

License definition

Answer 37

Revocable privilege to enter & use another’s land for limited, specific purpose

It is not an interest in the land - so licensee not entitled to comp if gov’t condemns (under power of eminent domain).

(NOT a profit or easement - which ARE nonpossessory interests in the land)

Question 38

How is license created?

Answer 38

Orally, in writing, or by another act demonstrating licensor’s intent to create license

Question 39

How is a license terminated?

Answer 39

A license is freely revocable—by the licensor, upon the death of either party, or upon conveyance of the licensed property—unless the licensee detrimentally relied on it or the license is coupled with an interest.

Question 40

merger doctrine

Answer 40

Under the doctrine of merger, the seller’s duties in a contract for the sale of real property—including the duty to deliver marketable title—merge into the deed at closing. As a result, these duties are enforceable thereafter only if they are contained in the deed..

Question 41

A majority of jurisdictions apply the doctrine of equitable conversion when a land-sale contract is silent regarding the risk of loss (as seen here). Under this doctrine, the risk of loss is placed on

Answer 41

on the party with equitable title (buyer) at the time the property was destroyed unless the other party is at fault for the loss.

The seller retains legal title to real property during the pendency of the sales contract (i.e., during the executory period - between contract formation and closing), but the buyer receives equitable title once the contract is formed and can be specifically enforced.*

Question 42

Under the Uniform Vendor and Purchaser Risk Act (adopted by a minority of jurisdictions), who retains the risk of loss?

Answer 42

seller retains the risk of loss unless and until the buyer takes possession or title is transferred.

Question 43

equitable conversion

Answer 43

Unless the land-sale contract states otherwise, the doctrine of equitable conversion places the risk of loss on the buyer once the contract is formed and can be specifically enforced.

Question 44

mortgage (def)

Answer 44

A mortgage is an interest in real property given to a lender (mortgagee) to secure a debt.

Question 45

The debtor (mortgagor) can freely transfer mortgaged property to a grantee unless the mortgage states otherwise.

After the transfer, the mortgage remains attached to the property and the debtor remains personally liable for the mortgage debt. But the grantee’s obligations depend on whether the grantee either:

Answer 45

took subject to the mortgage – in which case the grantee does not agree to pay and is not personally liable for the debt or

assumed the mortgage – in which case the grantee expressly agrees to pay and becomes personally liable for the debt, while the debtor becomes secondarily liable as a surety.

Question 46

After defaulting on loan - can you regain title?

Answer 46

By equitable right and statutory right (if statute exists)

Question 47

equity of redemption - timing and how exercise?

Answer 47

At any time prior to foreclosure sale

Pay full amount of debt due (including interest) to lender (*If the mortgage contains an acceleration clause, the debtor may have to pay the full amount of the outstanding debt (and any accrued interest) to exercise the equitable right of redemption)

Question 48

statutory right of redemption - timing and how exercise?

Answer 48

if statute exists

Statutory period after property has been sold in foreclosure

Pay foreclosure sale price to purchasing party

Question 49

deed in lieu of foreclosure

Answer 49

A deed conveying a mortgagor’s interest in the mortgaged property to a mortgagee in lieu of foreclosure allows the mortgagee to take immediate possession of the property without the formalities of a foreclosure sale.

(if the mortgagee accepts a deed in lieu of foreclosure without reserving the right to foreclose (as seen here), then its mortgage is extinguished. )

Question 50

what happens to junior interests when deed in lieu of foreclosure?

Answer 50

Any junior interests remain attached to the property, and the mortgagee’s interest is extinguished unless it was reserved.

Question 51

remainder (def)

Answer 51

a future interest in real property that is capable of becoming possessory upon the expiration of a life estate or term of years.

Question 52

vested remainder

Answer 52

A remainder is a future interest in real property that is capable of becoming possessory upon the expiration of a life estate or term of years.

vested – not subject to any condition precedent AND held by an identifiable living person (e.g., “then to my son and daughter”)

Question 53

Contingent remainder

Answer 53

subject to some condition precedent (other than the natural termination of the prior estate) OR held by an unknown or unborn person (e.g., “then to my heirs, but only if they survive my friend”).

Question 54

A vested remainder is subject to complete divestment if

Answer 54

if the occurrence of a subsequent condition will eliminate the remainder interest (e.g., “then to my heirs; but if none survive my friend, then to my lawyer”).

Question 55

fixture (def)

Answer 55

A fixture is a chattel (tangible personal property) that is (1) attached to real property in such a manner that it is treated as part of the real property for ownership and (2) used for some larger component or function of the land (e.g., a wall separating adjoining properties).

Question 56

Liability for private nuisance arises when

Answer 56

the defendant’s interference with the plaintiff’s use and enjoyment of his/her property is both:

substantial – offensive, annoying, or intolerable to a normal person in the community

and

unreasonable – the severity of the plaintiff’s harm outweighs the utility of the defendant’s conduct.

Question 57

Real covenants are enforceable by

Answer 57

money damages

Question 57

Real covenants - req for burden to run

Answer 57

Writing (SoF)

Intent to run

Touch & concern (relates to the use, enjoyment, or occupation of the land)

Horizontal (promising parties simultaneously transfer the land and create the covenant ) & vertical privity (successors have an unbroken chain of ownership from the original parties)

Notice (person to be bound had actual, record, or inquiry notice of the covenant (required only if the person to be bound was a purchaser - NOT req if inherit))

WITHN

Question 57

Real covenants - req for benefit to run

Answer 57

Writing
Intent to run
Touch & concern
Limited vertical privity
No notice required

Question 58

equitable servitudes are enforceable by

Answer 58

equitable relief

Question 59

Equitable servitudes - express - requirements

Answer 59

Writing
Intent to run
Touch & concern
Notice

(no privity)

Question 60

Equitable servitudes - implied - requirements

Answer 60

Intent to create common scheme
Restrictive servitude (promise not to do something)
and
Notice (actual, record, or inquiry)

Question 61

Implied Reciprocal Servitude

Answer 61

a kind of equitable servitude that is implied and need NOT be in writing.

Created by
- Dev must intend to create covenant on all plots in subdivision;
- promises must be reciprocal (benefits, burdens each and every parcel equally);
- must be negative rather than positive (i.e. must be restriction on owner’s use)
- successor must be on notice of restriction
- must be common plan or scheme

Question 62

touch and concern the land

Answer 62

i.e., relate to the use, enjoyment, or occupation of the dominant and servient estates

Question 63

Can a debtor transfer mortgaged land?

Answer 63

Yes - The debtor can freely transfer mortgaged land to a grantee unless the mortgage states otherwise.

Question 64

if land conveyed, does mortgage stay with debtor or land? is debtor personally liable for debt?

Answer 64

land

the debtor remains personally liable for the debt secured by the mortgage.

Question 65

if land with mortgage is conveyed, the grantee’s obligations depend on whether the grantee:

Answer 65

took subject to the mortgage (presumed) – in which case the grantee does not agree to pay and is not personally liable for the debt

or

assumed the mortgage – in which case the grantee expressly agrees to pay and becomes primarily liable for the debt, and the debtor becomes secondarily liable as a surety.

Question 66

adverse possession req

Answer 66

OCEAN

Open and notorious – apparent or visible to a reasonable owner
Continuous – uninterrupted for the statutory period
Exclusive – not shared with the owner
Actual – physical presence on the land
Nonpermissive – hostile and adverse to the owner

Question 67

for AP, is it nonpermissive if someone pays for a deed to the wrong place?

Answer 67

Yes - it’s nonpermissive if deed is not for the true owner’s place

Question 68

for AP, nonpermissive, is adverse posessor’s state of mind assessed?

Answer 68

most jurisdictions only require that the possessor objectively demonstrate an intent to claim the land.

Some jurisdictions may require that the possessor subjectively believe that he/she has the legal right to possess the property.

Question 69

SoL on AP exception

Answer 69

The statute of limitations for adverse possession will not run against a true owner afflicted with a disability (e.g., insanity, infancy, imprisonment) at the inception of the adverse possession until the disability is removed.

Question 70

In a race-notice jurisdiction, a good-faith purchaser for value (BFP) has priority over an earlier competing property interest if

Answer 70

the BFP lacked notice of the earlier interest and recorded first.

Question 71

Tenancy at will - how terminated?

Answer 71

A tenancy at will is a leasehold estate that has no specific term and continues so long as the landlord and the tenant desire. This tenancy can generally be terminated by the landlord or the tenant.

if only one party is expressly given the right to terminate the leasehold, the arrangement may be deemed unconscionable if, for example, the arrangement is unfair due to one party’s superior bargaining power. In such a case, both parties are given the ability to terminate the lease.

Question 72

mortgage (def)

Answer 72

A mortgage is a lien on real property used to secure repayment of a debt.

Question 73

A lender (mortgagee) may generally foreclose on a mortgage if the debtor (mortgagor)

Answer 73

defaults on the mortgage loan.

Question 74

A foreclosure does what

Answer 74

terminates any interest in the foreclosed property that is junior (lower in priority) to the interest being foreclosed but does not affect any senior interest (higher in priority).

Question 75

If no recording act, what rules?

Answer 75

CL: “first in time, first in right” rule is used to prioritize interests.

Question 76

If “first in time, first in right” is in effect, can a lower priority lender foreclose on debtor?

Answer 76

Yes - however the senior mortgage will remain attached to the property.

A foreclosure on mortgaged property terminates interests in that property that are junior to the foreclosed interest but does not affect any senior interests.

Question 77

A third-party owner of subsurface rights is strictly liable for

Answer 77

any failure to support the land and buildings that predate the conveyance of those rights, provided that the damage would have occurred in the land’s natural state (i.e. building did not contribute to the subsidence).

Question 78

Failing to record a mortgage can affect the bank’s…

Answer 78

…rights in the house with respect to other creditors

(prob incomplete)

Question 79

Novation

Answer 79

A novation is the substitution of a new contract for an old one when a party to the original contract agrees to release the other party and substitute a new one.

Question 80

exoneration-of-liens doctrine

Answer 80

CL only - most states abolished (most states, payment of an encumbrance on devised real property is required only if the will so specifies.)

applies when a devisee (the son) receives a specific devise of real property (the house) that is subject to an encumbrance (e.g., mortgage, lien). Under this doctrine, the devisee is entitled to pay off any encumbrances on that property—including a purchase-money mortgage—from the remaining assets in the testator’s estate (even if remaining assets were separately left to daughter).

Question 81

Doctrines affecting conveyance by will

Answer 81

Lapse

Ademption

Exoneration

Abatement

Question 82

Lapse

Answer 82

(Doctrines affecting conveyance by will)

Causes devise to fail if beneficiary dies before testator (unless the testator indicates a clear intent that the devise is to survive the beneficiary’s death). If the devise fails, the lapsed gift will become part of the residuary estate.

Every state has an anti-lapse statute (goes to fam member)

Question 83

Ademption

Answer 83

(Doctrines affecting conveyance by will)

Causes devise to fail by either:

extinction – specifically devised property not owned by testator (or destroyed or fundamentally changed) at death

satisfaction – beneficiary received devised property (or other asset intended to satisfy devise) during testator’s life

Question 84

Exoneration

Answer 84

(Doctrines affecting conveyance by will)

Allows beneficiary of specifically devised real property to use estate’s remaining assets to pay off any encumbrances on that property

Question 85

Abatement

Answer 85

Reduces devises that cannot be satisfied by assets remaining after testator’s debts are paid

Residuary devises abated first, followed by general & then specific devises

Question 86

Classification of devises
(conveyance by will)

Answer 86

• Specific (specifically identified asset)
• General (often of money - payable from general assets of estate… “$2,000 to my daughter” “one-half of my estate to my son”)
• Demonstrative (Devise primarily payable from designated source, but secondarily payable from general assets - “$2,000 to my daughter out of my bank account”)
• Residuary (what’s left after above)

Question 87

Wild, uncultivated crops - personal property or real property? What happens at transfer?

Answer 87

Real property

Pass automatically with land

Question 88

Planted, cultivated crops - personal property or real property? What happens at transfer?

Answer 88

Personal property

Pass with land except* when:

• harvested – severed from land
• ripe – mature and therefore deemed constructively severed from the land (some courts)
• planted by tenant with indefinite leasehold or
• planted by adverse possessor under claim of right

(*Then prior owner has right to reenter land to remove crops.)

Question 89

doctrine of emblements

Answer 89

a tenant has a right to reenter the land to remove, harvest, and cultivate crops planted prior to the termination of his/her tenancy (if termination is not the tenant’s fault). Adverse possessors have the same rights as a tenant.

Question 90

The doctrine of ademption by extinction causes a devise of a specific asset to fail if a testator does not own it at the time of death. Proceeds from the sale of the asset, or property purchased with those proceeds, then become…

Answer 90

part of the general estate.

Question 91

Lien theory state: The mortgagee/lender cannot take possession until

Answer 91

foreclosure is complete

Question 92

Title theory state: when can mortgagee/lender take possession?

Answer 92

Lender technically has right (as holder of title) to posess the property at any time

Question 93

Intermediate title theory state: when can mortgagee/lender take possession?

Answer 93

A minority of jurisdictions modify the title theory.

Mortgagee can take possession at default

Question 94

valid deed req

Answer 94

Written

signed by the Grantor (or authorized agent),

Identify the grantor and the grantee

contain Words of transfer, and

Property description (identify the land with reasonable certainty)

Mnemonic: Will Grant Interest When Proper

Question 95

When is a transfer of property effective?

Answer 95

An inter vivos transfer of property by a deed is effective when the grantor delivers it and the grantee accepts it.

In contrast, a will is not effective until the grantor dies—regardless of when it was executed.

Question 96

Transfer of deed to third party

Grantor’s agent

Answer 96

Transfer treated as if grantor retained deed, even when grantor instructs agent to deliver deed to grantee at some future time or upon happening of some event

Question 97

Transfer of deed to third party

Grantee’s agent

Answer 97

Transfer treated as if it was made directly to grantee

Question 98

Transfer of deed to third party

Independent third party

Answer 98

Transfer made with condition placed on transfer to grantee:
- if grantor retains absolute right to recover deed, no transfer
- if grantor does not, present transfer treated as present gift that cannot be voided OR conditional transfer creates future interest in grantee

Transfer conditioned on death of grantor (death escrow):
- effective if grantor intends to make present gift
- ineffective if grantor intends that gift be effective only upon grantor’s death

Question 99

The farmer’s deed expressed his present intent to “now transfer my farm” because it was delivered to the neighbor (independent third party) with no right to take it back. When is transfer effective?

Answer 99

if son is presumed to have accepted this beneficial gift, the transfer was effective when the deed was delivered to the neighbor

Question 100

Mortgage alternatives

Answer 100

• Absolute deed (Debtor gives deed to creditor with intent to secure loan (ie, equitable mortgage))
• Deed of trust (Debtor gives deed of trust to third-party trustee as collateral for debt, & creditor can instruct trustee to foreclose upon default)
• Installment land contract (Debtor agrees to buy land through installment payments & gets immediate possession, but seller keeps legal title until paid in full)
• Sale-leaseback (Seller leases property from buyer immediately after sale, & seller’s rental payments function as repayments on loan)
• Equitable vendor’s lien (Seller finances buyer’s purchase with equitable vendor’s lien when seller transfers title to buyer but purchase price not fully paid)

ADISE
Alternative drummer is so edgy

Question 101

an absolute deed—one that transfers title free of all liens and encumbrances—given with the intent to secure a debt is generally enforceable as an equitable mortgage. Exception:

Answer 101

competing equities (e.g., good-faith purchaser) take precedence over an equitable mortgage.

Question 102

deed

Answer 102

a legal instrument that transfers ownership of real property from the owner (grantor) to another (grantee).

Question 103

Transfer by deed req

Answer 103

1. Essential components
2. Delivery
3. Acceptance

Question 104

Valid delivery (deed)

Answer 104

a. Grantor’s present intent to transfer title
b. Presumed upon:
- physical delivery of deed
- recording
- unconditional delivery to agent
- grantee’s possession of property/deed

Question 105

accepted by the grantee – presumed if

Answer 105

the transfer is beneficial to the grantee.

ex: And the daughter is presumed to have accepted this beneficial gift when it was recorded, even though she died before knowing of it

Question 106

joint tenancy - four unities

Answer 106

PITT

Possession – tenants share an equal right to possess or use the property

Interest – tenants have an equal interest in the property

Time – property interests simultaneously vest in all tenants

Title – property interests received in the same instrument of conveyance

Question 107

a joint tenancy ____ be devised by will or inherited through intestate succession.

Answer 107

cannot

(bc right of survivorship)

Question 108

a tenancy in common ____ be devised or inherited.

Answer 108

can

Question 109

Ways to terminate easements

Answer 109

DAMPER
- Destruction – servient estate condemned or destroyed by natural forces
- Abandonment - dominant estate abandons easement
- Merger - dominant & servient estates united in common ownership
- Prescription - servient owner prevents use for prescriptive period
- Estoppel - dominant owner estopped from asserting easement
- Release - express release in writing satisfying statute of frauds

Question 110

Ways to terminate covenants

Answer 110

A covenant can be terminated in the same manner as an easement (DAMPER)

Question 111

Abandonment

Answer 111

(terminates covenant or easement)

Abandonment occurs when an affirmative act—something more than neglect or nonuse—shows a clear intent to relinquish the covenant.

Question 112

A restriction on property will not be enforced when…

Answer 112

drastic changes in the surrounding area render the restriction meaningless or absurd

(prob not complete)

Question 113

purchase-money mortgage

Answer 113

A PMM is a mortgage granted to the seller of real property if the mortgage is given as part of the same transaction in which title is acquired

PMM can also arise when loan proceeds are used to construct improvements on the real property if the mortgage is given as part of the same transaction in which title is acquired.

Question 114

Lien priority on real property

Answer 114

Purchase-money mortgage (super priority over all other liens that arose before the PMM—regardless of whether the PMM or those liens were recorded)

First recorded liens (sr priority)

All other recorded liens (jr priority)

Unrecorded liens (lowest priority)

Question 115

installment land contract

Answer 115

(i.e., contract for deed) is a contract under which the seller retains title to the property until the buyer makes the final payment under an installment plan.

Question 116

Installment land K - Traditionally, a buyer who missed a single payment was deemed to have defaulted on the contract, and the seller could keep all prior installment payments and take back the property.

Today, states handle a buyer’s failure to pay …

Answer 116

in one of three ways:

Allow the seller to retain ownership of the property but require some form of restitution to the buyer

Offer the buyer an equitable right of redemption—i.e., the buyer can keep the property by paying the full balance of the installment contract at any time prior to the foreclosure sale

Treat the installment land contract as a mortgage, so the seller must foreclose to gain title to the property and the buyer has an equitable right of redemption and other protections

Question 117

In a jurisdiction that treats an installment land contract like a mortgage, a buyer in default may redeem the property by

Answer 117

tendering to the owner the full balance due under the contract prior to foreclosure.

Question 118

two types of partition:

Answer 118

In kind – physical division of the property into distinct lots that are proportionate to each cotenant’s ownership interest

By sale – forced sale of the property where the proceeds are divided in accordance with each cotenant’s ownership interest

Question 119

preferred partition by cts

Answer 119

Courts prefer to make a partition in kind.

But when physical division of the land is impossible, impracticable, or inequitable, a court will grant a partition by sale.

Question 120

Voluntary partition allowed for what kind of tenancies?

Answer 120

All - Tenancy in common, joint tenancy, tenancy by the entirety

Question 121

Involuntary partition (unilateral) allowed for what kind of tenancies?

Answer 121

Tenancy in common, joint tenancy,

but NOT tenancy by the entirety

Question 122

can a buyer that assumes a mortgage as part of the purchase price raise defenses the original debtor could have raised?

Answer 122

NO. A buyer who assumed a mortgage as part of the purchase price may not raise defenses—e.g., duress, statute of limitations, lack of legal capacity—that the debtor could have raised to avoid the mortgage obligation. Otherwise, the buyer would be unjustly enriched.

Question 123

Rule of Convenience

Answer 123

The Rule of Convenience prevents the Rule Against Perpetuities from being applied to class gifts by closing class membership when any member of the class is entitled to immediate (present) possession of a share in the class gift.

Question 124

Shelter Rule

Answer 124

a donee who receives property from a grantor protected by a recording act will receive the same protection as the grantor under the recording act.

Question 125

Available negative easements

Answer 125

Common Law:
- light
- air
- support
- water access

Modern view:
- view
- solar access
- conservation

Question 126

Landowners can only restrict another’s blockage of light if…

Answer 126

if they are protected by statute or enter into an agreement with the neighboring landowner to create a negative easement

Question 127

do courts recognize blockage of light as a nuisance?

Answer 127

But courts generally decline to recognize blockage of light as a private (or public) nuisance unless the blockage was motivated by malice

Question 128

option contract for the purchase of real property is formed when

Answer 128

one party (the option holder) receives the exclusive right to purchase the property (i.e., “exercise the option”) during a specified time period in exchange for consideration. Under an option contract:

• the grantor cannot revoke the option during the specified time period
• the option does not terminate upon the death or incapacity of the grantor
  and
• the option holder can make a “counteroffer” without losing the right to exercise the option

Question 129

Does mailbox rule apply to options?

Answer 129

No. grantor must receive the option holder’s decision to exercise the option within the time period specified in the contract.

Question 130

An equitable servitude can also be implied from a common scheme if there is:

Answer 130

Intent to create common scheme – the owner intended to impose a servitude on all lots in the subdivision (here, the deeds to most of the lots contained a two-story height restriction)

Restrictive servitude – the intended servitude is a promise not to do something on land (here, a promise not to build a three-story residence)

Notice – the person to be bound by the servitude had actual, record, or inquiry notice of the servitude (here, the speculator received actual notice through the rancher’s letter, and the couple had inquiry notice because no three-story residences were on the other lots)

**Nevertheless, if the common scheme arose after some of the lots were already sold, then the previously sold lots will not be incorporated into the common scheme or subject to the implied equitable servitude. Since the rancher’s scheme was created after the lot was sold to the speculator, neither the speculator nor the couple is subject to the implied equitable servitude.

Question 131

Implied equitable servitudes typically arise in planned subdivisions and are also referred to as

Answer 131

implied reciprocal servitudes, mutual rights of enforcement, and reciprocal negative servitudes.

Question 132

A grantee who assumes the mortgage expressly agrees to pay and becomes primarily liable for the debt, while the original debtor becomes secondarily liability as a surety. This gives the lender the right to sue….

Answer 132

either party upon default, and the original debtor can recover any amount paid from the grantee.

Question 133

“due on sale”

Answer 133

due on sale clause allows a lender to demand full payment of any remaining mortgage debt if the debtor transfers the mortgaged property without the lender’s written consent.

If this clause is waived, the debtor remains liable on the note—even after transferring the mortgaged property—until the debtor is released by the lender.

Question 134

Defects rendering title unmarketable

Answer 134

• Future interest if future-interest holder has not agreed to transfer title
• Private encumbrance (eg, mortgage, covenant, option, easement, lease, liens)
• Significant physical defect (eg, incurable encroachment)
• Title acquired by adverse possession & not quieted by judicial decree
• Zoning-ordinance violation

FEPAZ
Frozen Elsa Planking Around Zillow

Other red flags: gaps in chain of title, boundary disputes

Question 135

future interest that follows a life estate is called

Answer 135

a reversion (if title reverts to the grantor) or a remainder (if it passes to someone other than the grantor)

Question 136

defeasible life estate

Answer 136

a life estate that may be terminated upon the death of an individual OR by the occurrence of a stated event (e.g., “to my companion for life or until she vacates the premises”).

Question 137

future interest that follows a defeasible life estate

Answer 137

a reversion (if the estate reverts to the grantor) or an executory interest (if the estate passes to a third party)

If title passes to someone other than the grantor when the present interest terminates, then the estate is followed by a remainder and an executory interest.

Question 138

when can future interests be transferred?

Answer 138

These future interests may be transferred during life or upon death.

Question 139

In most jurisdictions, possession is hostile if

Answer 139

the possessor objectively demonstrates an intent to claim the land—regardless of the possessor’s subjective intent.

Question 140

a minority of jurisdictions does consider the adverse possessor’s ______ intent.

Answer 140

subjective

Some of these jurisdictions require that the intent be based on the possessor’s good-faith belief that he/she has the legal right to possession, while others require that the intent be based on bad faith (i.e., aggressive trespass).

Question 141

A person who acquires property by adverse possession can only transfer ownership of the property by

Answer 141

deed—not by oral agreement or by simply removing a trespassing structure.

Question 142

Foreclosure methods

Answer 142

Judicial sale (all states): Judicially supervised public sale of mortgaged property

Nonjudicial sale (half of all states):
Privately conducted public sale of mortgaged property (permitted only if mortgage contains power-of-sale clause)

Strict foreclosure (few states): Foreclosure without sale of mortgaged property

Question 143

foreclosure conducted by a judicially supervised sale - requirements

Answer 143

the foreclosing mortgagee (lender):

1. must give notice to the holders of any junior interests in the property so that they can participate or send a representative—otherwise, the junior-interest holder’s interest will remain after the sale
2. may, but need not, join others who have an interest in the property (e.g., senior-mortgage holder) or are liable on the debt (e.g., guarantor) as proper, but not necessary, parties

Question 144

exceptions to doctrine of merger

Answer 144

obligations that are collateral to and independent of the conveyance (e.g., the seller’s obligation to remove his/her personal property prior to closing) are usually not subject to the doctrine of merger.

(might not be comprehensive)

Question 145

nonrecourse loan - what happens when due-on-sale clause is triggered

Answer 145

borrower (mortgagor) does not have personal liability for the loan and is not liable for any deficiency. However, the bank can still enforce its mortgage through foreclosure

Question 146

Due-on-sale clause

(common exceptions to enforceability)

Answer 146

for residential property (Fewer than 5 dwelling units)

• Devise, descent, or transfer to joint tenant upon death
• Transfer to spouse or child
• Transfer to ex-spouse in divorce
• Transfer to borrower’s living trust
• Creation of subordinate lien without occupancy rights
• Granting leasehold interest of less than 3 years without option to purchase

Question 147

vested remainder subject to open

Answer 147

If at least one but not all members of the class receive a vested remainder at the time of the conveyance, then that vested remainder is subject to open.

Question 148

Rule Against Perpetuities

Answer 148

voids specific contingent future interests unless they must vest or fail within 21 years after the end of a relevant life in being when the interest was created.

Question 149

“bad as to one, bad as to all” rule

Answer 149

RAP

if a future interest is transferred to a class and RAP voids the transfer to any member of that class, then the transfer is void as to all class members

Question 150

Restraints on alienation

Answer 150

Direct restraints are disfavored.
- Only valid if reasonable
Balance utility of restraint against harm resulting from enforcement
- ex: Prohibiting some or all types of transfers, Prohibiting transfer without consent, Prohibiting transfer to particular persons

Indirect restraints are valid unless lacking rational justification
- ex: Imposing transfer fees;
Limiting property’s use/reducing its value

Question 151

Right of first refusal

Answer 151

indirect restraint on alienation

Such a provision is valid if it complies with the statute of frauds—i.e., is in a writing that is signed by the party to be charged contains all essential terms—

and

its terms are reasonable.

Question 152

express easement arises when

Answer 152

it is affirmatively created by the parties in a writing that complies with the statute of frauds (e.g., a deed).

Question 153

Easement holder’s use of express easement - how use and expansion allowed?

Answer 153

Uses intended by parties OR reasonably necessary to use/enjoy easement if intent is unknown

Expansion of use permitted

Question 154

Easement holder’s use of easement by prior use - how use and expansion allowed?

Answer 154

Limited to scope of prior use

No expansion of use

Question 155

Easement holder’s use of easement by necessity - how use and expansion allowed?

Answer 155

Normal uses needed for dominant estate (eg, ingress/egress, utility lines)

Expansion of use permitted

Question 156

Easement holder’s use of prescriptive easement - how use and expansion allowed?

Answer 156

Limited to scope of adverse use during prescriptive period

No expansion of use

Question 157

An easement also anticipates reasonable and natural development of the easement holder’s land (i.e., the dominant estate). Therefore, the easement holder may increase ________ as long as _________

Answer 157

An easement holder may increase the manner, frequency, or intensity of an easement’s use so long as that increase does not unreasonably damage or interfere with the use or enjoyment of the servient estate.

Question 158

If increased use of easement was excessive (unreasonably damaged or interfered with the owner’s servient estate), available remedies:

Answer 158

self-help abatement (e.g., blocking off the easement), damages, or an injunction—not termination of the easement.

Question 159

The closing date will be strictly enforced when:

Answer 159

the contract specifically states that “time is of the essence”

circumstances indicate that it was the parties’ intention to strictly adhere to the closing date

or

one party gives the other party notice that time is of the essence within a reasonable time prior to closing.

Question 160

If time is not of the essence and a party can’t close on closing date, is it a breach? is it grounds to rescind the K?

Answer 160

Yes and is liable at law for incidental losses (e.g., taxes, interest)

BUT a party’s failure to perform on the closing date is not grounds to rescind the contract so long as the party can perform within a reasonable time thereafter.

Question 161

is a right of entry alienable during life?

Answer 161

Yes

A fee simple subject to a condition subsequent (FSSCS) is created through specific conditional language—e.g., “but if,” “unless,” “provided that.” Upon the occurrence of the condition, the grantor (or his/her successor in interest) has the right to enter and terminate the estate if the grantor explicitly retained this “right of entry” (aka “power of termination”) in the conveyance.

Question 162

fee simple subject to a condition subsequent is terminated, future interets?

Answer 162

Right of entry

Upon the occurrence of the stated condition, the FSSCS will terminate only if the holder of the right of entry affirmatively demonstrates an intent to terminate—e.g., by bringing an eviction action.

Question 163

A foreclosure sale eliminates…

Answer 163

the mortgagor’s interest in the property

the mortgage interest being foreclosed upon

any junior interests attached to the property (not senior!)

Question 164

Types of notice for notice recording act jx:

Answer 164

Actual – the purchaser has actual knowledge of a prior interest in the property

Constructive (i.e., record) – a document showing that a prior interest has been recorded appears in the purchaser’s chain of title

Inquiry – the purchaser knows, or should know, of circumstances that would prompt a reasonable person to investigate

Question 165

Bona Fide Purchaser - meaning and examples

Answer 165

Payment of value

Yes:
- Release of existing debt
- Substantial amount not grossly inadequate in relation to property interest’s value

No:
- Security for existing debt (e.g. judgment creditors)
- Nominal payment (eg, $1)
- Recital of consideration in deed
- Gift, devise, or inheritance

Question 166

Unless the lease states otherwise, a landlord may assign his/her rights under the lease to a third party (i.e., assignee-landlord) without the tenant’s consent.

The assignee-landlord (second landlord) can then enforce covenants (i.e., promises) when….

Answer 166

The assignee-landlord can then enforce covenants (i.e., promises) in the lease that run with the land.* A covenant runs with the land when:

• the original parties intended to bind successors in interest (e.g., assignee-landlord) - even if not explicitly stated
• the covenant touches and concerns the land—i.e., affects the land’s use or value and
• the assignee-landlord is in privity of estate with the tenant—i.e., a mutual or successive relationship in the same property interest.

Question 167

Rights of first refusal subject to RAP?

Answer 167

Yes. this contingent future interest is void if it there is any possibility that it could vest more than 21 years after some relevant life in being at the creation of the interest.

Question 168

RAP applies to:

Answer 168

contingent future interests—–
- contingent remainder
- vested remainder subject to open
- executory interest
- power of appointment
- right of first refusal
- option

Interest must vest or fail within 21 years after some relevant life in being at creation of interest

Question 169

Requirements for valid deed

Answer 169

Writing
Grantor’s signature
Identity of parties
Words of transfer
Property description

Mnemonic: Will Grant Interest When Proper

Question 170

Effect of mortgage on joint tenancy - lien theory (who gets what and what happens to joint tenancy?)

Answer 170

Lender receives security interest in property but title stays with tenant-mortgagor

Severed upon foreclosure sale & converted to tenancy in common

Question 171

Effect of mortgage on joint tenancy - title theory (who gets what and what happens to joint tenancy?)

Answer 171

Lender receives legal title to property & tenant-mortgagor retains right of possession

Immediately severed when mortgage is given & converted to tenancy in common

Question 172

can a joint tenant grant a mortgage?

Answer 172

in his/her own joint-tenancy interest without the other joint tenant’s consent, but the mortgage will attach only to the mortgaging tenant’s interest

Whether the joint tenancy remains intact depends on the jurisdiction (lien theory is maj, title theory is min)

Question 173

what if one of two joint tenants grants a mortgage to a bank for a loan and then dies? who owns the land?

Answer 173

If this jurisdiction followed the lien theory, the joint tenancy would have remained intact after the farmer mortgaged her interest. And due to the right of survivorship, her joint-tenancy interest—and any mortgage attached to that interest—would have disappeared upon her death.

Title theory: bank can foreclose bc joint tenancy was severed when mortgage was given (converted to TIC at time of mortgage given)

Question 174

What sitch does property go to state when one dies?

Answer 174

If the decedent has no will that disposes of the property and no heirs upon his/her death, then the property will revert to the state (i.e., escheat).

Question 175

doctrine of _____ permits a court to reform a charitable trust when the specific purpose for which it was created becomes impossible, impracticable, or illegal to carry out.

Answer 175

cy pres

Question 176

presumption if not clear tenancy in common or joint tenancy?

Answer 176

TIC

In most states, there is a rebuttable presumption that a conveyance of property to two or more persons as joint owners creates a tenancy in common rather than a joint tenancy.

The modern trend focuses on the intent of the parties if the language creating the tenancy is unclear

Question 177

language that limits the purpose of the transfer (e.g., “for the purpose of”) creates

Answer 177

a fee simple absolute

Question 178

Defeasible fees are limited by

Answer 178

specific durational or conditional language (e.g., “so long as,” “but if”)

Question 179

recording acts - notice.. definition of constructive notice

Answer 179

(i.e. record)

when a prior interest was properly recorded in the land records

and

appears in the property’s chain of title

Question 180

grantor-grantee recording index

Answer 180

Most jurisdictions follow the grantor-grantee recording index (default rule), where recorded documents are organized by names of parties to a conveyance, while a minority of jurisdictions use a tract indexing system.

Question 181

wild deed

Answer 181

A recorded deed that is not found within the chain of title is called a “wild deed”

and fails to give constructive notice to subsequent purchasers

Question 182

In a majority of jurisdictions (including this one), the seller of a residence has a duty to

Answer 182

A seller of residential property has a duty to disclose any known material defects—i.e., defects that (1) substantially affect the value of the residence, (2) impact the health or safety of a resident, or (3) affect the desirability of the residence to the buyer—that cannot be reasonably discovered by the buyer.

(value, health/safety, desirability)

Question 183

If the seller of a residence fails to make proper disclosures, then the buyer may

Answer 183

rescind the sale or seek damages.

Question 184

Covenants of title

Answer 184

(warranty & special warranty deeds)

Present covenants (breached at time of conveyance)
- Seisin (Grantor owns interest being conveyed)
- Right to convey (Grantor has legal right to convey interest)
- Against encumbrances (No encumbrances (eg, easements, mortgages) against interest conveyed)

Future covenants (breached upon interference with possession)
- Warranty (Grantor will defend & compensate grantee for lawful claims made against grantee’s title)
- Quiet enjoyment (Grantee’s possession & enjoyment will not be disturbed by another’s lawful claim of title)
- Further assurances (Grantor will take any actions reasonably necessary to perfect grantee’s title)

Question 185

Common mortgage provisions

Answer 185

Acceleration clause

Due-on-sale clause

Due-on-encumbrance clause

Defeasance clause

Question 186

Acceleration clause

Answer 186

Common mortgage provision

Allows creditor to demand entire loan due & payable if debtor defaults

Question 187

Due-on-sale clause

Answer 187

Common mortgage provision

Allows creditor to demand entire loan due & payable if debtor sells mortgaged property without permission

Question 188

Due-on-encumbrance clause

Answer 188

Common mortgage provision

Allows creditor to accelerate mortgage obligation if debtor obtains second mortgage or otherwise encumbers property

Question 189

Defeasance clause

Answer 189

Common mortgage provision

Requires creditor to give debtor legal title to property & release mortgage lien once all payments are made

Question 190

is a joint tenancy devisable?

Answer 190

No

Question 191

is a tenancy in common devisable?

Answer 191

yes

Question 192

A lifetime conveyance of a joint-tenancy interest has what effect on a joint-tenancy with three people?

Answer 192

destroys unity of title and severs the joint tenancy with respect to that interest.

If there are more than two joint tenants, then severing one tenant’s interest does not affect the joint tenancy between the remaining tenants.

Question 193

Which transfer is void: transfer of mortgage without note or transfer of note without mortgage?

Answer 193

Transfer of mortgage without note (tho jx split as to effect of transfer)

Question 194

Which transfer is auto: note followed by mortgage or mortgage followed by note?

Answer 194

A promissory note can be assigned to another (an assignee) independent of the mortgage. The mortgage automatically transfers with the note once the note has been properly assigned (unless the parties agree otherwise)

Question 195

how assign negotiable promissory note

Answer 195

A negotiable promissory note can be assigned by simply endorsing and delivering the note to the assignee.

Question 196

how assign nonnegotiable promissory note?

Answer 196

a nonnegotiable promissory note requires a separate assignment document to transfer ownership.

Question 197

doctrine of equitable conversion

Answer 197

Under the doctrine of equitable conversion, a buyer receives equitable title to real property upon entering a land-sale contract. In contrast, the seller retains legal title and acquires the equitable right to receive the purchase price upon closing.

Due to the doctrine of equitable conversion, a judgment obtained against a seller after the execution of a land-sale contract is not enforceable against the real property—even if the claim arose before the contract was executed.

Question 198

a judgment obtained against the seller after the execution of the land-sale contract ____ enforceable against the real property

Answer 198

a judgment obtained against the seller after the execution of the land-sale contract IS NOT enforceable against the real property—even if the claim arose before the contract was executed.

Question 199

between K formation and closing is the executory period - who owns what during that period?

Answer 199

Seller has legal title to property (and acquires the equitable right to receive the purchase price upon closing)

Buyer has equitable title to property

Question 200

deed requirements: identifies grantor & grantee

Answer 200

Separate grantor & grantee (except concurrent estates)

Identifiable by name or description

CANNOT be ambiguous, unidentifiable, nonexistent grantee

Question 201

deed requirements: identifies land

Answer 201

Identifiable by reasonable certainty—eg:
Government survey
Metes & bounds
Street, lot, house number

CANNOT be Ambiguous description (but extrinsic evidence admissible);
CANNOT be Undefined part of larger parcel

Question 202

deed requirements: words of transfer examples

Answer 202

“Convey”
“Transfer”
“Grant”
“Sell”

NOT lease, rent, license

Question 203

is a contingent remainder transferable?

Answer 203

generally yes

Question 204

If time is of the essence and the seller cannot deliver marketable title on the date of closing, then the seller is in breach and the buyer can

Answer 204

rescind the contract. This is true even if the seller can correct the issue within a reasonable time after closing.

Question 205

A deed is a legal instrument that transfers ownership of real property from the owner (grantor) to another (grantee). The transfer is effective once the deed is:

Answer 205

delivered by the grantor – demonstrated by the grantor’s intent to make a present transfer of the property and

accepted by the grantee – presumed when the transfer is beneficial to the grantee.

Question 206

The grantor typically manifests the intent to presently transfer the property by physically handing over or mailing the deed to the grantee or the grantee’s agent. However, the intent to transfer can also

Answer 206

be implied from the grantor’s words or other conduct (e.g. The farmer signed and notarized the deed and then started to deliver it to the friend before stopping for lunch)

Question 207

Delivery of deed is presumed upon

Answer 207

physical delivery of deed
recording
unconditional delivery to agent
grantee’s possession of property/deed

(can be implied from words or conduct! it’s about grantor’s present intent to transfer)

Question 208

The right to subjacent support

Answer 208

support from beneath the surface of land—arises when the owner of land grants the right to mine minerals to a third party.

Question 209

Owner of mineral rights - when strictly liable and when liable to surface owner?

Answer 209

when acquired mineral rights matters

strictly liable to the surface owner for any failure to support the land and any buildings that existed on the land at the time the mineral rights were conveyed (provided that the damage would have occurred in the land’s natural state) or

liable for negligence for any damage to improvements built after the mineral rights were conveyed.

Question 210

A deed that names a nonexistent grantee is

Answer 210

void

Question 211

if a nonexistent grantee was conveyed an interest in a tenancy in common (of two people), then the ____ would retain the nonexistent cotenant’s interest and have a _____

Answer 211

grantor

tenancy in common with the other cotenant(s) named in the deed.

(Since the buyer paid the full purchase price, she can likely recoup one-half of the purchase price from the original owner in an unjust enrichment action.)

Question 212

Duties of mortgagor (e.g. debtor)

Answer 212

A mortgagor (e.g., debtor) in possession of the mortgaged property has a duty not to commit waste that would impair the mortgagee’s (e.g., lender’s) security interest in that property.

(prob not conclusive)

Question 213

waste

Answer 213

Waste occurs when, for example, the mortgagor fails to maintain or repair the property in a reasonable manner.

Question 214

States that follow the title theory of mortgages typically ____ a deficiency action after a nonjudicial foreclosure sale.

Answer 214

disallow

Question 215

nonrecourse loan

Answer 215

a loan secured by collateral, but for which the borrower is not personally liable.

Question 216

When foreclosure sale proceeds are insufficient to satisfy the mortgage obligation, many jurisdictions allow the mortgagee to seek

Answer 216

a deficiency judgment against a party who is personally liable for the loan.

(not personally liable if nonrecourse loan)

Question 217

what if mortgagor in possession of mortgaged property commits waste?

Answer 217

If the mortgagor breaches this duty, the mortgagee can recover damages for the impairment.

Question 218

All contracts for the sale of land have an implied warranty that

Answer 218

the seller will convey marketable title to the buyer upon closing unless otherwise stated. To be marketable, title must be reasonably free from doubt and under no threat of litigation, such that a reasonable person would accept and pay for it.

Question 219

If the seller cannot convey marketable title (e.g., due to a zoning violation), the buyer can

Answer 219

rescind the contract and refuse to close.

The buyer can also choose to accept the land with the defect and enforce the contract. If the seller refuses to perform, then the buyer can:
- rescind the contract and seek restitution
- seek specific performance with an abatement of the purchase price (e.g. compensate for defect - zoning violation)
or
-sue for damages.

Question 220

doctrine of subrogation - there’s an owner that sells to two people (tenants in common; take subject to) and owner later defaults. One of the tenants pays debt in full bc of bank threatening foreclosure… can they recover from other tenant? former owner?

Answer 220

Under the doctrine of subrogation, a third party (subrogee) who pays another’s mortgage loan in full becomes the owner of the loan and the mortgage securing that loan to the extent necessary to prevent unjust enrichment.

This means that the subrogee may seek reimbursement from the debtor (the former owner) or enforce the mortgage.

Therefore, the manager can enforce the mortgage against the bookkeeper (other co-tenant)’s one-half interest in the store to recover the bookkeeper’s share of necessary expenses. (The manager and the bookkeeper own the store as tenants in common with equal ownership interests. Since they did not assume the mortgage (they took subject to it), they are not liable for the mortgage debt. But as cotenants, the manager and the bookkeeper still owe each other a duty to pay their proportionate share of necessary expenses. Here, a necessary expense arose when the bank threated to foreclose on the mortgage and the manager paid the owner’s debt in full to prevent the foreclosure.)

Question 221

first-in-time, first-in-right rule

Answer 221

CL (if no recording statute)

Under this default rule, you don’t need to ask who paid value, who recorded when, or who had notice. In other words, the first taker wins, full stop.

Question 222

why would a donee who doesn’t get protection of recording act, record?

Answer 222

You are correct that donees are not protected by recording statutes because they are not “subsequent purchasers.” But this does not mean that all donees automatically lose to subsequent purchasers. Instead, it just means that a donee cannot use the recording act to shield their claim against a prior taker. However, if a donee records their own interest, they can deprive subsequent purchasers of the opportunity to record first or take the property without notice of the donee’s interest. When a donee immediately records their interest, even though they can’t claim protection under the recording act, they essentially knock the recording act shield out of the next claimant’s hands. When that happens, since no one can claim protection under the recording act, the first taker wins.

Question 223

Delivery is not presumed when a grantor keeps the deed. Under those circumstances, _________ of the grantor must evidence an intent to make a present transfer of the property interest.

Answer 223

the outward and visible acts

Question 224

A purchase-money mortgage is granted to the seller or a third-party lender when

Answer 224

(1) the loan proceeds are used to acquire title to or construct improvements on the property and (2) the mortgage is given as part of the same transaction in which title is acquired.

Question 225

Is a mortgage subject to the same defenses as underlying obligation/debt secured by that mortgage?

Answer 225

Yes.

Question 226

when mortgaged property is transferred to a donee, the donee _______ entitled to assert the donor-mortgagor’s defenses against the mortgagee-lender. A purchaser who assumes an existing mortgage obligation as part of the purchase price _______ assert the donor-mortgagor’s defenses.

Answer 226

IS

MAY NOT

Question 227

life estate pur autre vie

Answer 227

life state measured by the life of someone other than the current holder of the life estate (e.g. transferred from someone with a life estate)

Question 228

life estate benefit and duty

Answer 228

life tenant has the right to all rents and income during the tenancy.

also has a duty to pay current charges that become due (e.g., property taxes, mortgage interest) unless the document creating the life estate provides otherwise.
- This duty is limited to the amount of income that can be generated from the land.

(not comprehensive prob)

Question 229

under _________, an adverse possessor may tack on the predecessor’s time if ____________.

Answer 229

Under the doctrine of tacking, an adverse possessor may tack on the predecessor’s time if there is privity between successive adverse possessors.

Question 230

in adverse possession, tacking on predecessor’s time requires privity - between who and what requirements are there?

Answer 230

privity is satisfied if the possessor takes by nonhostile means (e.g., by descent, devise, contract, deed).

Question 231

Maj / min rules for risk of loss under real estate K

Answer 231

Maj: doctrine of equitable conversion and place the risk of loss on the buyer during the executory period (true regardless of actual posession)
- about when buyer gets legal title

Min: Uniform Vendor and Purchaser Risk Act. Under this act, the risk of loss remains with the seller until the buyer takes possession of or receives legal title to the property.
- about when buyer gets either legal title or possession

Question 232

absolute deed - also called

Answer 232

equitable mortgage

Question 232

An equitable mortgage can be established when a debtor gives ________ to a lender with the intent to secure a loan

Answer 232

An equitable mortgage can be established when a debtor gives an absolute deed—i.e., a deed that is free of encumbrances and transfers unrestricted title to property—to a lender with the intent to secure a loan.

The debtor-grantor must prove by clear and convincing evidence that the deed was intended as security for a loan—not as an outright transfer.

Question 232

absolute deed - remedy if default

Answer 232

The deed recipient, like any other lender, may then bring a foreclosure action if the debtor defaults.

equitable mortgage is not an outright transfer of the lot. Therefore, the investor cannot immediately evict the owner. The lender must first follow any applicable foreclosure procedures.

Question 233

can outside info outside of deed be introduced to interpret or explain a deed?

Answer 233

Yes

SoF does not prevent the introduction of oral evidence to explain or interpret a written deed—e.g., to show that the deed was subject to an agreement that the property serve as security for a loan.

Additionally, the parol evidence rule does not prevent the admission of evidence to establish the existence of such an agreement because the deed was not intended to be a complete integration of the parties’ agreement.

Question 234

Transfer of deed is invalid & cannot be enforced by bona fide purchaser if:

Answer 234

grantor’s signature is forged

deed is forged (ie, falsely made or materially altered with intent to defraud) or

grantor is deceived about nature of executed document

Question 235

Voidable: Transfer of deed is valid until set aside & may be enforced by bona fide purchaser if:

Answer 235

procured by fraudulent inducement

or

party lacks capacity to execute deed (eg, infancy, lack of capacity)

Question 236

void deed meaning

Answer 236

A void deed is invalid at its inception and conveys no title to the grantee.

Question 237

future-advances mortgage is (i.e. and definition)

Answer 237

line of credit

a mortgage given by a debtor (mortgagor) in exchange for the right to receive money from the lender (mortgagee) in the future.

Question 238

for future-advances mortgage, priority with regard to proceeds from a foreclosure sale depends on whether the advances are:

Answer 238

optional – in which case, the future-advances mortgage has priority with respect to amounts loaned before the future-advances mortgagee received notice of a subsequent mortgage

or

obligatory – in which case, the future-advances mortgage has priority with respect to amounts loaned before and after the future-advances mortgagee received notice (actual or constructive) of a subsequent mortgage.

Question 239

can something be devised to someone that died?

Answer 239

yes (Question ID# 10339)

Question 240

Mortgagees are considered to have paid value and are therefore protected by a recording act, but this protection does not always extend to

Answer 240

judgment liens.

Question 241

do mortgages have auto priority over judgment lien?

Answer 241

No - mortgage does not automatically have priority over a judgment lien.

Question 242

Lien priority is determined by

Answer 242

the “first in time, first in right” rule unless a recording act applies. recording act doesn’t always protect judgment liens.

Question 243

Fair Housing Act

Prohibits discriminatory actions in sale/renting of dwelling based on

Answer 243

race, color, religion, sex, handicap, national origin, or familial status (includes having custody of children under 18 and being pregnant)

Question 244

FHA violation examples

Answer 244

refusing bona fide offer

discriminating in terms, conditions, privileges, or services of purchase/rental

advertising preference for or discrimination against buyer/renter

falsely representing dwelling’s availability for inspection, sale, or rental

inducing sale/renting with discriminatory representations about neighborhood

denying reasonable modifications to accommodate handicap at occupant’s expense

Question 245

Fair Housing Act doesn’t apply to

Answer 245

religious organizations

private clubs that incidentally provide lodging to members

familial status for senior housing
owner of ≤ 3 single-family dwellings*

owner-occupied dwellings with ≤ 4 units*

sale/rental of single-family home by private owner

Question 246

Easement holder duties

Answer 246

Duty to repair & maintain—
Easement holder must repair & maintain easement to extent necessary to:
- prevent unreasonable interference with enjoyment of servient estate
- protect servient-estate owner from liability to third parties

Duty to contribute — Other easement holders and/or servient-estate owner who share easement must contribute to reasonable costs of repairs & maintenance

Question 247

Does owner of the servient estate have an obligation to contribute to easement repair/maintenance?

Answer 247

Yes, IF he/she uses the easement

Question 248

can two diff people hold easement?

Answer 248

yes

Question 249

after-acquired title - i.e.

Answer 249

estoppel by deed

Question 250

estoppel by deed applies when

Answer 250

a grantor conveys property to a grantee by warranty deed before the grantor has acquired title to that property. Once the grantor receives title, this doctrine will cause it to automatically transfer to the grantee.

Question 251

purchase-money mortgage rules on priority

Answer 251

A PMM has priority over liens that arose prior to the PMM regardless of whether the PMM was recorded.

But a PMM does not necessarily have priority over subsequent liens. Instead, the recording act (or, if there is no recording act, the “first in time” rule) will control.

Question 252

Common situations that excuse tenant’s duty to pay rent

Answer 252

Condemnation (eminent domain)

Material breach

Frustration of purpose

Novation

CMFN
Can’t Make Francs Now

Question 253

Condemnation is the taking of land for public use or because it is unfit for use. The right of a tenant upon condemnation:

Answer 253

depends upon whether the condemnation is:

partial – where only a portion of the leased property is taken, so the tenant must continue to pay rent but is entitled to compensation for the portion that was taken or

complete – where the entire leased property is taken, so the tenant is discharged from his/her rent obligation and is entitled to compensation for the taking.

Question 254

Frustration of purpose does what and applies when?

Answer 254

excuses tenant’s duty to pay rent if Property becomes unsuitable for contemplated use due to unforeseeable:
- change in property’s physical condition (not caused by tenant)
- change in law (eg, zoning code)
- government action other than condemnation (eg, wartime rationing)

Question 255

Material breach by landlord excuses tenant’s duty to pay. When is there material breach?

Answer 255

Landlord breaches:
- implied promise to deliver possession
- implied warranty (ie, quiet enjoyment, habitability)
- express lease provision

partial eviction and constructive eviction matter too (under implied warranty?)

Question 256

Every lease (commercial and residential) contains an implied covenant of quiet enjoyment, under which the landlord promises

Answer 256

not to interfere with the tenant’s possession of the leased premises. It is breached only when the landlord prevents the tenant from possessing the leased premises (i.e. not fault of landlord, not breaching implied covenant)

Question 257

constructive eviction and tenant’s duty to pay rent

Answer 257

the landlord (not someone else e.g. gov’t) breaches a duty to the tenant that substantially interferes with the tenant’s use and enjoyment of the leasehold (e.g., failing to make repairs).

A tenant’s duty to pay rent is excused if the landlord was responsible for the partial eviction.

Question 258

Partial eviction and a tenant’s duty to pay rent

Answer 258

A partial eviction occurs when a tenant is prevented from possessing or using a portion of the leased premises.

The tenant is excused from paying rent for the entire premises if the landlord was responsible for the partial eviction.

Question 259

if the lender releases or impairs the mortgaged property the debtor is

Answer 259

relieved of personal liability for the mortgage debt.

In some states, a release completely discharges the debtor’s personal liability.

In other states and under the Restatement, the debtor’s personal liability is discharged only to the extent of the value of the released property.

Question 260

A debtor remains personally liable for the mortgage debt even after the mortgaged property is transferred to another. But the debtor will be relieved of personal liability if

Answer 260

the lender releases or impairs the mortgaged property.

Question 261

Seller’s duty to disclose - minority approach

Answer 261

CL: No duty to disclose property defects unless otherwise provided (Caveat emptor - burden on buyer)

Question 262

Seller’s duty to disclose - maj approach

Answer 262

Modern approach:

Must disclose known material defects that buyer could not reasonably discover

Exception: “as is” clause or specific disclaimers without seller’s fraud

Question 263

Implied warranty of habitability - who promises? applies to what kind of sales? what is promised?

(ie, implied warranty of fitness or suitability, quality, workmanlike construction)

Answer 263

Implied promise by builder, developer, or other commercial seller of

NEW house

that house was built in reasonably workmanlike manner & is suitable for living

Question 264

defeasible fee types

Answer 264

Fee simple determinable

Fee simple subject to condition subsequent

Question 265

indefeasible estate ends naturally - future interest

Answer 265

owner has a reversion

or

if it goes to a third party, the third party has a remainder.

Question 266

is Fee simple determinable alienable, devisable, and descendible?

Answer 266

yes but always subject to the stated condition

Question 267

seller needs _____ title to deliver marketable title to the buyer at closing.

Answer 267

legal

Question 268

A land-sales contract is executed when

Answer 268

the seller promises to deliver marketable title

Question 269

will a court enforce a K for land-sales when a seller doesn’t possess title to the land?

Answer 269

yes, if seller can deliver marketable title at closing (or within reasonable time if time not of essence)

Question 270

A mortgage is generally enforceable only to the extent that

Answer 270

the underlying obligation is enforceable.

Question 271

Therefore, a mortgage ______ subject to the same defenses as the underlying obligation secured by the mortgage—e.g., ________

Answer 271

is

mistake, duress, lack of capacity, statute of limitations.

Question 272

The terms of a mortgage agreement may allow the lender (mortgagee) to pursue an action based on the personal liability of the owner (mortgagor) or an action to foreclose on the mortgage. If so, does one have to be done before the other? does choosing one foreclose the other option?

Answer 272

If so, then choosing one option does not preclude subsequently pursuing the other, and one option need not be pursued before the other.

Question 273

may a mortgage be enforced separately from the obligation for which the mortgage serves as security?

Answer 273

Yes. A mortgage may be enforced separately from the obligation for which the mortgage serves as security.

Question 274

recording doesn’t effect lender’s ability to

Answer 274

enforce the mortgage and foreclose.

Question 275

can extrinsic evidence be admitted to clarify ambiguities in the deed?

Answer 275

yes

though extrinsic evidence can be used to identify the grantee, the deed will be deemed void if such evidence is also unclear.

Question 276

liquidated damages clause generally enforceable when

Answer 276

the amount of liquidated damages is reasonable—e.g., no more than 10 percent of the purchase price. But when evaluating reasonableness, courts may also consider:

• the sophistication of the buyer
• the nature of the transaction (commercial v. residential) and
• whether the seller suffered an actual loss (if not, courts may refuse to enforce the clause).

Question 277

AP - In a majority of jurisdictions, the nonpermissive requirement is met when

Answer 277

(1) the land is possessed without the owner’s permission and (2) the possessor objectively demonstrates an intent to claim the land as his/her own—the possessor’s subjective intent is irrelevant.

Question 278

Implied easement types

Answer 278

Necessity

Existing prior use

Question 279

implied easement - necessity requirements

Answer 279

Severance of common ownership

Strict necessity for use & enjoyment of land

Question 280

implied easement - Existing prior use requirements

Answer 280

Severance of common ownership

Prior existing use

Apparent & continuous

Reasonable necessity for use & enjoyment of land

Question 281

When a foreclosure is conducted by a judicially supervised sale, the foreclosing mortgagee (lender)

must

may

Answer 281

must give notice to the holders of any junior interests in the property and make them parties to the foreclosure action so that they can participate or send a representative—otherwise, the junior-interest holder’s interest will remain after the sale

may, but need not, join others who have an interest in the property (e.g., a senior-mortgage holder) or are liable on the debt (e.g., a guarantor) as proper, but not necessary, parties

Question 282

Cotenants - do they have fiduciary duty?

Answer 282

Cotenants owe a duty of fair dealing—but generally not a fiduciary duty—to each other. However, a fiduciary duty may be imposed on cotenants who:

jointly purchase property in reliance on each other

or

acquire their interests at the same time from a common source (e.g., by gift, will, or inheritance).

Question 283

How fiduciary duty between cotenants arises commonly:

Answer 283

This duty primarily arises when the co-owned property is sold at a tax or mortgage foreclosure sale and purchased by a cotenant. The other cotenants then have the right to reacquire their original interests by paying their share of the cost paid to acquire the property (based on the cotenant’s ownership interest) within a reasonable time.

Question 284

Land sales K - seller’s remedies

Answer 284

• Rescission & restitution (Rescind (ie, cancel) agreement & recover possession of property; Rental value & physical damages are recoverable; Buyer not liable for purchase price)
• Specific performance (Seek an injunction ordering buyer to pay agreed purchase price;
  May be unavailable if money damages provide adequate compensation & property is not unique
  eg, condominium identical to other units in complex)
• Damages (Loss of bargain = contract price – market value at time of breach;
  Liquidated damages = amount designated in the sales contract as compensation for breach;
  Retain buyer’s deposit (up to amount of seller’s actual damages);
  Incidental & consequential damages that were contemplated during sales contract or reasonably foreseeable)

Question 285

Liquidated damages are recoverable when…

Answer 285

the liquidated amount bears a reasonable relation to anticipated damages.

Many courts have held that a deposit of no more than 10% of the purchase price is reasonable.

Question 286

A liquidated damages provision __ more likely to be enforced against a sophisticated buyer.

Answer 286

is

Question 287

Equal dignities rule

Answer 287

The equal-dignities rule requires that an agent’s authority be in writing when the act performed by the agent on the principal’s behalf is subject to the statute of frauds (e.g., transfers of real-property interests).

However, this rule does not apply to persons merely acting as the principal’s amanuensis (i.e., scribe or secretary) by signing a specific deed at the grantor’s request.

Question 288

a fixture that the tenant has attached to the leased property may be removed if:

Answer 288

the leased property can be and is restored to its former condition

and

the removal and the restoration are made within a reasonable time.

Question 289

reasonable time to remove fixture as a tenant

Answer 289

A reasonable time for removal generally does not extend beyond the termination of the lease.

However, it does so when (1) the termination was not due to a breach by the tenant and (2) the date of termination was not foreseeable by the tenant sufficiently far enough in advance to permit removal before the lease terminates

Question 290

Notice for termination of periodic tenancy

Answer 290

the landlord must give the tenant notice of termination before the beginning of the intended last period of the periodic tenancy.

Question 291

Special relationships creating a duty to control others

Answer 291

Parent and child

Mental-health professional and patient

Employer and employee

Custodian and prisoner

Mnemonic: Please Make Everyone Careful

Question 292

A seller of real property has a duty to disclose to a buyer

Answer 292

Depends if on land or off land….

ON LAND

unreasonably dangerous natural or artificial conditions on the land if:

the condition exists at the time of the sale

the seller knows or has reason to know of the condition and its unreasonable risk to persons on the land

the buyer does not know or have reason to know of the condition or risk

and

the seller has reason to believe that the buyer would not discover the condition or realize its risk.

OFF LAND

The seller may also be liable to persons off the land for artificial conditions if (i) the condition existed at the time of the sale, and (ii) the seller knew or should have known the condition existed and that it posed an unreasonable risk

Question 293

Remedy for seller of real property that breaches duty to disclose unreasonably dangerous natural or artificial ocnditions on the land:

Answer 293

A seller who breaches this duty is liable for physical harm caused by the unreasonably dangerous condition—at least until the buyer has had a reasonable opportunity to discover and remedy the condition.

However, if the seller created or actively concealed the condition, then the seller’s liability continues until the buyer has actually discovered and had a reasonable opportunity to remedy the condition.

Question 294

Does NIED plaintiff need to have witnessed the event?

Answer 294

Zone of danger - yes

Bystander - yes

Special-situations theory - NO for corpse mishandling, asked about other two

Question 295

Liability under the special-situations theory arises when the

Answer 295

defendant negligently:

• delivered an erroneous announcement of death or illness
• mishandled the corpse or bodily remains of a loved one or
• contaminated food with a repulsive foreign object.

Question 296

Negligence for products liability - A commercial seller owes a duty of reasonable care to any foreseeable plaintiff (i.e., purchaser, user, bystander). Does this include inspections?

Answer 296

Yes - This duty is breached when the commercial seller fails to exercise reasonable care in the inspection or sale of the product and the defect would have been discovered had such care been used.

Question 297

In most jurisdictions, the measure of recovery in intentional misrepresentation cases is ____. How is it calculated?

Answer 297

the benefit of the bargain.

That is determined by calculating the difference between the actual value received by the plaintiff in the transaction and the value that would have been received had the representation been true.

example: The actual value received by the woman in the transaction was zero because the chainsaw was worthless. And the value that would have been received had the lumberjack’s representation been true was $1,000. Therefore, the benefit of the bargain is $1,000, which is the highest amount the woman can recover.

Question 298

Doctrines affecting conveyance by will

Answer 298

Lapse

Ademption

Exoneration

Abatement

Question 299

a _______ statute does not require that the subsequent purchaser record the conveyance to prevail.

Answer 299

notice statute

(unlike race or race-notice statute)

Question 300

anti-lapse statutes

Answer 300

prevent a gift from lapsing when:

the gift is made to parties specified by the statute (usually the testator’s immediate relatives)*

and

those parties leave children or other descendants (i.e., issue) who survive the testator.

*In most jurisdictions, the anti-lapse statute is limited to grandparents or a descendant of a grandparent of the testator (e.g., aunts, uncles, parents, siblings, children).

Question 301

Foreclosure-sale proceeds are typically distributed in the following order of priority:

Answer 301

Costs from the foreclosure sale
Mortgage being foreclosed
Junior mortgages or liens, in the order of priority
Debtor

Question 302

impact of Modification of a senior mortgage - impact on mortgage priority

(e.g. bank mortgage, another mortgage, bank refinances mortgage)

Answer 302

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) 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.

Question 303

Types of easements

Answer 303

Easement appurtenant
- Benefits easement holder’s land
- Automatically transfers when land is conveyed (eg, easement by necessity)
- Easements are presumed to be appurtenant unless otherwise stated
- Unless otherwise stated, an easement appurtenant cannot be used for the benefit of property other than the dominant estate.

Easement in gross
- Benefits easement holder personally
- Does not transfer when land is conveyed (eg, prescriptive easement for utility line)

Question 304

Remedy if easement owner tries to use easement appurtenant to also benefit subsequently acquired property?

Answer 304

Not allowed.

Remedy: damages or injunction

Damages are appropriate when there is no increased burden on the servient estate.

Question 305

Rights of cotenants

Answer 305

Possess & enjoy entire property (absent an agreement to the contrary, a cotenant generally has no duty to pay rent to the other cotenants)

Receive proportionate shares of net profits from removal of natural resources
Receive pro rata shares of rent from third parties

Question 306

duties of cotenants

Answer 306

Pay proportionate shares of expenses that may give rise to lien (eg, mortgage, property tax)*

Contribute to repair or improvement costs, but only upon agreement**

*A cotenant 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.

**cotenants have no right to be reimbursed by other cotenants for repairs made to the property—even when those repairs were necessary—absent an agreement.

Question 307

RAP contingent future interests

Answer 307

Contingent remainder

Vested remainder subject to open

Executory interest

Power of appointment

Right of first refusal

Option (RAP applies UNLESS the right was granted in a lease to a current leasehold tenant)

Question 308

RAP majority rule on what happens if contingent future interest could possibly vest more than 21 years after validating life ends

Answer 308

A majority of jurisdictions have adopted the Uniform Statutory Rule Against Perpetuities (USRAP), which adopts a “wait and see” stance with respect to the applicability of the Rule.

Under this stance, an otherwise invalid interest is valid if it does in fact vest within 90 years after its creation.

Under the USRAP, the Rule generally does not apply to future interests arising from commercial transactions, including options to purchase, preemptive rights (e.g., right of rst refusal), and future leases.

Question 309

A joint tenant (in joint-tenancy) can grant a mortgage w/o consent?

Answer 309

A joint tenant may only grant a mortgage on his/her own joint-tenancy interest without the other joint tenant’s consent.

May grant mortgage on whole thing with consent

Question 310

effect of mortgage by one joint tenant on joint tenancy

Answer 310

Whether the joint tenancy remains intact depends on the jurisdiction:

Lien theory (majority rule) – a mortgage is merely a lien on the property, which means that granting a mortgage does not sever the joint tenancy but a severance will occur upon a foreclosure sale following a default

Title theory (minority rule) – a mortgage constitutes a transfer of title, which means that granting a mortgage does sever the joint tenancy and the mortgagor-tenant becomes tenants in common with the other joint tenants

Question 311

Products liability claims

Answer 311

Strict products liability

Negligence

Intentional tort

Misrepresentation (strict liability - regardless of defective)

Warranty
- Merchantability (implied)
- Fitness for Partic Purpose (implied)
- EXpress

Question 312

Strict products liability elements

Answer 312

Commercial seller (ie, manufacturer, distributor, retailer) produced or sold defective product

Defect caused plaintiff harm

Question 313

Product liability - Negligence elements

Answer 313

Seller (commercial or noncommercial) failed to use reasonable care in producing or inspecting defective product

Product caused plaintiff harm

Question 314

Product liability - intentional tort

Answer 314

Seller (commercial or noncommercial) purposefully or knowingly produced or sold defective product

Product caused plaintiff harm

Question 315

Products liability - Misrepresentation elements and type of liability

Answer 315

Commercial seller misrepresented material fact about product

Consumer justifiably relied on misrepresentation when purchasing product

Product caused plaintiff harm

Commercial sellers are strictly liable for the misrepresentations they make regarding their products—regardless of whether those products are defective.

Question 316

Products liability - Warranties and their elements

Answer 316

Merchantability (implied)
- Commercial seller warranted product is generally acceptable & reasonably fit for its ordinary purpose

Fitness for particular purpose (implied)
- Seller (commercial or noncommercial) warranted product is fit for particular purpose
- Purchaser relied on seller’s judgment or skill to purchase product

Express
- Seller (commercial or noncommercial) made affirmation of fact or promise that is part of basis of bargain

Question 317

remedy for breach of implied warranty of merchantability

Answer 317

plaintiff can recover damages resulting from:

physical harm—i.e., personal injury or damage to property—and

economic losses—including consequential damages (e.g., lost profits)—that stem from the alleged physical harm.*

*Purely economic losses do not stem from any physical harm and are available only in breach of implied warranty claims—not other products liability claims.

Question 318

The commercial seller of the product may generally disclaim or limit the remedies and warranties available in a products liability action. EXCEPTIONS:

Answer 318

any such disclaimer or limitation does not bar or reduce an injured plaintiff’s recovery for physical harm.

in the case of consumer goods, any limitation of consequential damages (e.g. lost profits) for personal injuries is unconscionable and therefore invalid.

Question 319

Landlord’s duty to deliver posession

Answer 319

English rule (Maj): Deliver ACTUAL possession to tenant (i.e. remove third party wrongfully possessing property)

American rule (Minority): deliver LEGAL possession to tenant (ie ensure no third party has “right” to possess property

Question 320

Remedy for breach of landlord duty to deliver possession

Answer 320

Withhold rent to acquire possession

Seek damages to period not in possession

Terminate lease

Question 321

Landlord rejects tenant’s offer of abandonment (of lease)… tenant is obligated to…

Answer 321

pay rent for the remainder of lease.

In most jx, landlord has duty to mitigate damages by making reasonable effort to re-rent the property (and tenant’s liability for rent will be reduced accordingly)

Question 322

ways landlord can accept tenant’s offer to surrender rights to lease… and what is tenant’s obligation under lease if accepted?

Answer 322

by LL express agreement

by LL retaking possession of property plus either LL’s own use or re-renting to third party.

Lease is terminated and tenant is NOT liable for future rent

Question 323

Profit a prendre

Answer 323

aka profit

nonpossessory interest in land that gives the profit holder the right to enter another’s land to remove specific natural resources.

Bc interest in land, profit holder is entitled to comp if gov’t condemns the property under the power of eminent domain (true regardless of whether profit holder paid value or has exclusive right to remove the resources)

Question 324

Easement by prescription

Answer 324

Easement acquired through use that is:

Open & notorious – apparent or visible to reasonable owner

Continuous – uninterrupted for statutory period

Actual – use of land

Nonpermissive – hostile & adverse to owner

Mnemonic: OCAN

Question 325

What duty does a land possessors owe to trespassers?

Answer 325

Traditional: owe a limited duty to known or anticipated trespassers to (1) warn trespasser about hidden, artificial dangers that are KNOWN to land possessor but UNLIKELY to be discovered by the trespasser; AND
(2) use reasonable care while conducting activities on their land

Modern approach: owe a duty of reasonable care to all land entrants (except flagrant trespassers)

Question 326

Location of express easement

Answer 326

set by its terms.

when terms unclear, cts look to parties’ intent (often evidenced by parties’ conduct)

Question 327

Relocation of easements

Answer 327

Servient owner may relocate (at own expense) to permit normal use/dev of servient estate if relocation (1) is reasonable, and (2) does not violate express easement’s terms, significantly lessen easement’s utility, increase burden on dominant owner’s use or enjoyment of easement, frustrate easement’s purpose.

Question 328

Two funds rule of marshallling

Answer 328

applies when a sr creditor has 2 funds available to satisfy a debt (eg mortgage on multiple properties) and a jr creditor also has an interest in one of those funds. It requires the sr creditor to first look for satisfaction from the fund that is not shared so as to preserve the jr creditor’s interest in the shared fund.