MBE Real Property Flashcards
Types of Defeasible Fee Estates
Fee Simple Determinable (durational language: “so long as” “while” “until”)
Fee Simple Subject to Condition Subsequent (conditional language: “provided that” “but if” “on the condition that”)
Fee Simple Subject to Executory Interest (future interest in a third party)
Types of Future Interests
Fee Simple Determinable: possibility of reverter in Grantor (automatic)
Fee Simple Subject to Condition Subsequent: right of reentry in Grantor (must be exercised)
Fee Subject to Executory Interest: Executory Interest
Life Estate: remainder in third party or reversion in Grantor
Types of Waste
Affirmative: overt conduct causes a decrease in property value
- Vested future interests can sue for damages
- Any future interest can sue for injunction
Permissive: permitting the premises to deteriorate through neglect, etc.
Ameliorative: change in the use of a property that increases its value
Vested v. Contingent Remainders
Vested: not subject to any conditions precedent + ascertainable grantee
Contingent: subject to a condition or non-ascertainable grantee
Vested Subject to Open
Happens with class gifts where the class may grow further Once a class closes, future possible members have no claims
Rule of Convenience
Closes a class when any class member is entitled to immediate possession as a way around RAP
Doctrine of Worthier Title
Creates an presumption of reversion to the grantor; preventing remainders in a grantor’s heirs
The Rule in Shelley’s Case
Prevents against remainders in a grantee’s heirs, using merger to create a fee simple in the grantee
RAP Exceptions
Charity-to-Charity
Options of current tenants to purchase a leasehold
Options in commercial transactions
Future interests that revert to the grantor
Specific dollar amounts given to each class member
RAP Applies to:
Applies to contingent remainders, executory interests, and class gifts (subject to open) if not protected by the Rule of Convenience
The Rule Against Perpetuities - Common Law
Future interests are valid only if they must vest or fail by the end of a life in being plus 21 years
The Rule Against Perpetuities - Statutory
Wait and see approach
Changes the time frame to 90 years
Doesn’t automatically fail, only fails if it doesn’t vest or fail by 90 years
Common Violations of RAP
"Survival beyond age 21" condition Fertile Octogenarian Unborn Spouse Defeasible fee followed by executory interest Conditional passage of interest
Cy Pres
Equitable doctrine used to reform a transfer to avoid violating RAP
The Four (sometimes Five) Unities
Possession Interest Title Time (Person - for Tenants by the Entirety)
Tenancy in Common
Default co-tenancy No right of survivorship Each holds undivided interest with unrestricted rights of possession to the whole Interest freely devisable/transferrable Only need unity of possession
Joint Tenancy
Requires express language (usually “with rights of survivorship”)
Yes right of survivorship
Interest is alienable but not devisable/descendible
Must have all 4 unities
Loss of any of the unities severs to Tenants in Common
Jurisdictions differ on what a lease does (either severs or temporarily suspends
Tenancy by the Entirety
Requires all 4 unities plus marriage
Must be married at the time of granting
Neither can alienate or encumber the property without the other’s consent
Many states presume conveyance to a married couple creates TE and divorce turns it into a TC
Rights & Obligations of Co-Tenants
- Possess the entire property
- Liable for third party rents after deducting operating expenses/repairs
- Can collect contribution for operating expenses (taxes) BUT if in sole possession, only if they exceed the rental value of the property
- Compel others to share in expenses for repairs ONLY IF: (i) necessary (ii) seeks accounting or partition
- No right to reimbursement for improvements
- Duty of fair dealing, but not fiduciary
- Buying back at tax/foreclosure sale requires giving other cotenants the chance to buy back their interests
- Can get a court to unilaterally partition
Fair Housing Act Protected Traits
Race, Color, Religion, National Origin, Sex, Disability, Familial Status
Allows for both disparate treatment and impact
FHA Exemptions
- Single-family housing sold/rented without a broker
- Owner-occupied buildings with 4 or fewer living units
- Religious organizations/private clubs
Only religious organizations/private clubs can discriminate in advertisements
FHA Prohibits
Refusing to rent, sell, or finance a dwelling
Requiring different rents
Falsely denying that a unit is available
Providing different services to facilities
Stating discriminatory preference in an advertisement
Tenancy for Years
Any fixed period of time
Automatic termination at the end of the term
Can be terminated before end (i.e. breach)
Created by express agreement
Must be in writing if longer than 1 year (SOF)
Periodic Tenancy
Ongoing estate by set periods of time with no predetermined termination date
Automatic renewal at the end of each period absent termination notice
Created by express agreement, implication (no duration mentioned), or by law (holdover)
Notice must be given before last period begins to terminate (need a full period at least)
Tenancy at Will
No specific term
Continues as long as parties want
Created by express agreement or implication
No notice required at CL, notice required by most states now
Tenancy at Sufferance
Created after tenant wrongfully holds over after lease ends
Tenant bound by terms of lease from before expiration
Lasts until tenant vacates, is evicted, or landlord holds tenant to a periodic tenancy
Landlord Remedies for Tenant Breach
Sue for damages AND evict AND terminate for failure to pay rent (majority)
Entitled to late rent but not future rent - no anticipatory repudiation for leases in most states
Abandonment: treated as an offer to surrender rights under the lease; can accept and terminate lease or reject and hold tenant liable
Warranty of Habitability
Only for residential leases
Premises must be fit for basic human habitation
If breached, tenant must notify landlord, give reasonable time to repair and can refuse to pay rent, repair and deduct from rent, or pay rent and seek damages (in possession)
Covenant of Quiet Enjoyment
For both commercial and residential leases
Tenants have the right to quiet use and enjoyment of the premises without landlord interference
Landlord has a duty to control other tenants’ nuisance in common areas
Breach can amount to eviction
Types of Eviction
Actual: actually excluded from premises, lease is terminated and tenant obligation to pay ends
Partial: excused from paying rent but must pay reasonable rental value if it’s partial eviction by a party with a superior claim; not excused from paying due to adverse possessors/trespassers
Constructive: substantial interference by landlord’s actions (or failure to act); must give notice and vacate within a reasonable time if landlord fails to fix the problem
Retaliatory: eviction for asserting a tenant’s right - not allowed
When a Landlord Can Refuse Assignment/Subleasing
Majority: landlords can only withhold permission for commercially reasonable reasons in relationship to the property used
Minority: gives complete discretion
Exceptions to the Statute of Fraud in Land Sales
Part Performance (usually need 2/3 of: payment, possession, improvement)
Detrimental Reliance
Admission
Implied Warranty of Fitness
Only for new homes
Warrants the use of adequate materials and workmanship, including latent construction defects
Equitable Conversion
A seller’s interest is converted by the contract into an interest in the proceeds of the sale, not the real property
Once the contract is signed, buyer is owner of the land subject to condition he pay purchase price at closing
Between contract and closing, buyer bears the risk of loss (majority)
Seller maintains risk until closing (minority)
Adverse Possession Elements
Continuous (20 years at CL)
Open & Notorious
Hostile (majority ignore subjective intent, just objective intent to claim land as own; minorities require good or bad faith)
Exclusive
Deed Delivery
Grantor must intend to make present transfer - rebuttable presumption in execution/recording
Delivery doesn’t occur if grantor maintains any option to recover the deed
Acceptance presumed
Deed Requirements
Identified Parties
Grantor Signature
Words of Transfer
Reasonably Definite Property Description
Equal Dignities Rule
Agency authorization for real estate contracts and executing deeds are allowed, but the relationship agreement must be in writing
What Recording Acts Cover
Deeds Mortgages Leases Options Judgments affecting title Easements/Covenants/Equitable Servitudes
Types of Notice
Actual: they actually know
Inquiry: a reasonable investigation would disclose prior claims (dude on the land or mentioned in the deed to another transaction)
Constructive: proper recording appearing in the chain of title
Types of Deeds
General Warranty
Special Warranty
Quitclaim Deed
Present Covenants
Seisin
Right to Convey
Against Encumbrances
Breached at sale
Future Covenants
Quiet Enjoyment
Warranty
Further Assurances
Breached after the problem occurs
Special Warranty Deed
Same covenants of title as general but only warrants against defects arising during the time grantor had title
Shelter Rule
Someone who takes from a BFP protected by a recording act has the same protections as their grantor
Mortgage Alternatives
Deed of Trust: trustee holds title for beneficiary
Installment Land Contract: seller retains title until buyer makes final payment
Absolute Deed: transfers unrestricted title [can be a disguised mortgage if obligation created contemporaneously with transfer]
Conditional Sale and Repurchase: sold then leased back to seller [may be a disguised mortgage if lease is for a long time with option to repurchase]
Mortgage Types
Purchase Money (loan to buy property in question) Future Advance (line of credit for improvements/business)
Equity of Redemption
After default but before foreclosure sale, mortgagor can regain title by paying full amount owed plus interest
Statutory Redemption
When there, allows the owner to redeem after a foreclosure sale
Mortgage Priority Exceptions
Purchase Money generally has priority over others
Recorded may take priority over non-recorded
Subordination Agreements
Mortgage Modifications/Replacements
Future Advances
After-Acquired Property
Foreclosure Effects on Parties
Mortgagor interest eliminated
Senior Interests unaffected
Junior Interests destroyed
Foreclosure Notice Requirements
Senior Interests need not be notified
Junior Interests must be notified/joined
Easement Types
Express
Necessity - strict necessity
Implication - previously used on servient estate by owner (who owned both estates before) (continuous, apparent, and reasonably necessary)
Prescription: continuous, actual, open and hostile, for statutory period (20 years CL)
Estoppel: good faith, reasonable, detrimental reliance on permission (from a license)
Negative - prevents owner from using own land, must be express
Easement Transfers
Easement Appurtenant - benefits the land, transferred automatically with the dominant estate
Easement in Gross - benefits the person, can be transferred to other parties if intended (only servient estate can transfer)
Duty to Maintain an Easement
An easement owner has a right/duty to maintain the easement
May seek contribution from co-owners after notice and an opportunity to participate in repair decisions
Profits
Entitles the holder to enter servient land and remove soil or other substance of the soil (e.g., mineral, timber, oil)
Real Covenants Requirements
Writing
Intent
Touch/Concern the Land
Notice (burden only)
Privity
- Horizontal (burden only)
Same instrument
- Vertical (both)
Mutual/successive land interestRelaxed v. Strict Vertical Privity
Strict: for the burden to run, successor must take the original party’s ENTIRE interest
Relaxed: for the benefit to run, successor only needs to take an interest carved out of original estate
Equitable Servitudes Requirements
Writing
Intent
Touch/Concern
Notice (to enforce against a purchaser)
Implied Reciprocal Servitudes
Intent to create servitude on all plots (common scheme)
No writing requirement
Negative servitude
Notice of party against whom enforcement is sought
When Fixtures Can Be Removed
Fixtures incorporated into structure become part of realty, but can be removed if:
- Seller reserves right in contract
- Leased property can be restored to prior condition without damage in reasonable time
New Rule: trespassers can remove or recover for value added if in good faith
Support Rights
The right to have the land supported in its natural state
Lateral Support
Undeveloped: landowner excavating on own land strictly liable for damage to undeveloped adjoining land only if adjoining land would have collapsed in undeveloped state
If improvements contributed to collapse, landowner only liable if negligent
Subjacent Support
Owner of mineral rights strictly liable for any failure to support the land and any buildings on the land at the time rights were conveyed
