MBE Real Property Flashcards
Landlords are often required to maintain received security deposits in an escrow account, and in the MAJORITY of states, the interest earned on the account belongs to the
TENANT, not the Landlord
In the MAJORITY of states, the maximum amount of a security deposit is usually set by statute and generally ranges from:
1-2 months’ rent
3 months is excessive
A teacher is moving into a new apartment building. The building has five floors with three apartments on each floor. The building also has common areas shared between the residents, including a laundry room and a rooftop deck. The teacher is moving into one of the apartments on the fifth floor and is bringing her new golden retriever puppy with her. The landlord is charging the teacher three months’ rent as a security deposit, even though the other tenants in the building without dogs had to pay only one month’s rent as a security deposit. The security deposit is to be placed in an escrow account with the earned interest on the account belonging to the landlord.
The building is located in a jurisdiction that follows the majority approach to landlord-tenant laws. Which of the following concerning the security deposit is true?
A: The landlord may only charge the teacher extra for her dog while the dog is a puppy.
B: The landlord may charge three months’ rent for a security deposit.
C: The landlord may not keep the security deposit in an escrow account.
D: The landlord may not keep the earned interest.
D: The landlord may not keep the earned interest.
–> interest belongs to the TENANT under Majority rule
+
–> can only charge 1-2 months’ rent so B. is wrong
In Commercial lease, what is the rule surrounding fixtures?
– Trade Fixtures Exception –> Tenants could remove an item used in their trade or business that would have otherwise become a fixture on the realty
– Agreement between Landlord and Tenant is controlling
– If Agreement is silent, Tenant may remove the chattel that he attached as long as it doesn’t SUBSTANTIALLY DAMAGE the premises or destroy the chattel
– Removal MUST occur before END OF LEASE, and Tenant has duty to REPAIR DAMAGES resulting from removal of chattel
If a landowner excavates his own land, and collapse of the neighboring land and a structure built on that land occurs, the excavating landowner is liable ONLY IF
*the neighboring land would have collapsed even without the weight of the structure
B/c landowner’s rights are to the lateral (side) as to the land, not structures built on it
*even if it was not done negligently or w/ malicious intent to injure
The buyer of a home was unable to secure financing from a bank for the full amount of the purchase price set by the seller. The seller agreed to accept cash from the buyer for 10 percent of the purchase price and the buyer’s note for 10 percent of the purchase price. Upon being informed of this arrangement, the bank agreed to loan the buyer the remaining 80 percent. Both the seller and the bank secured their interests through mortgages on the home, with the exchange of documents between all three parties at closing. The bank recorded its mortgage, but the seller did not record his mortgage. Subsequently, the buyer defaulted on both its loan obligation to the bank and the note to the seller. Both the bank and the seller joined in a foreclosure action. The proceeds do not fully cover the buyer’s obligations to both the bank and the seller.
The jurisdiction has enacted the following statute: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be first recorded according to law.”
Which of the following statements accurately describes the priorities of the bank and the seller to the proceeds?
Answers:
A) The bank has priority to the proceeds, because the seller failed to record his mortgage.
B) The bank has priority to the proceeds, because it recorded its mortgage.
C) The seller has priority to the proceeds, because the seller financed the purchase of the home.
D) The seller is entitled to 1/9 of the proceeds and the bank is entitled to 8/9 of the proceeds, because both received their mortgages in the same proceeding.
C) The seller has priority to the proceeds, because the seller financed the purchase of the home.
The SELLER has priority despite the Race-Notice Jx statute, even though he didn’t record his interest, because the Bank KNEW of the interest and was informed of it, therefore, bank had notice under the statute
*Don’t think of perfecting interest in terms of Secured Transactions because this concerns REAL PROPERTY and Article 9 does not apply
“To my friend so long as alcoholic beverages are not sold on the property, and if alcoholic beverages are sold on the property, the estate is to end at once.”
What type of fee simple estate has been created?
Fee Simple Determinable
(Durational language: “So long as”)
Grantor retains a future interest as a Possibility of Reverter (automatically reverts back to the grantor)
What are the elements of Real Covenants (enforceable by $ MONEY DAMAGES) for the BURDEN vs. the BENEFIT to run?
“the BURDEN to TWIN is H”
BURDEN:
- Writing
- Intent to Run
- Touch and Concern
- Horizontal and Vertical Privity
- Notice
“the BENEFIT to TWIN is LV”
BENEFIT:
- Writing
- Intent to Run
- Touch and Concern
- *LIMITED Vertical Privity
- *NO Notice required
A covenant—ie, a promise between parties to do or not do something on land—is called an ________________ when, as here, it is enforced by an injunction.
The _____________________ will run to the promising parties’ successors in interest if the following requirements are met:
The covenant is in writing (eg, the mother’s deeds to her children).
The promising parties intended for the restriction to be enforceable by and against successors (eg, the covenant is intended to preserve the mother’s lake views).
The covenant touches and concerns the land (ie, relates to the use, enjoyment, or occupation of the dominant and servient estates).
If the person against whom the covenant is to be enforced is a purchaser, that person hasnotice of the covenant (eg, notice from a recorded deed)
Equitable Servitude
“TWINs are ENJOINED”
Express:
- Touch and Concern
- Writing
- Intent to Run
- Notice
Implied:
- Intent to create common scheme
- Restrictive Servitude
- Notice
Equitable Servitude can be express (e.g. a real covenant being enforced by an injunction rather than for money damages) or implied, what are the elements of an IMPLIED E/S?
Implied:
- Restrictive Servitude
- Intent to create common scheme
- Notice
If a Bank has a mortgage securing son’s home as collateral for his loan, and Bank gets a second mortgage to secure the Mom’s apartment as collateral for son’s loan, but Mom doesn’t sign the promissory note, can the bank still foreclose?
YES.
The mother is just not PERSONALLY LIABLE on the loan because she did not sign the promissory note or otherwise agree to pay the debt.
But Bank still has the apartment secured as collateral by Mom voluntarily giving the mortgage
Do cotenants have a duty to share in expenses and reimburse each other for such expenses (e.g. mortgage payments, tax payments)?
Yes.
Rights & duties of cotenants
Rights
– Possess & enjoy entire property
– Receive proportionate shares of net profits from removal of natural resources
– Receive pro rata shares of rent from third parties
Duties
– 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 deed to a nonexistent (eg, deceased) grantee (e.g. family members deeds property to friend not knowing that they died 2 days earlier) is….
VOID as to that grantee.
“Rule of Convenience” does not apply when the Grantor
makes the specific intent to keep the class open (e.g. “to my grandchildren, ‘regardless of when born’, who reach the age of 21)
With regard to contingent remainders and vested remainders subject to open, the Rule Against Perpetuities (RAP) provides that they are valid only if
they must vest or fail by the END of a life in being + 21 years
