MBE RP Flashcards
Lifte tenants’ obligations to pay interest on mortgage and property tax
Life tenants have the obligation to pay all ordinary taxes on the land and interest on the mortgage to the extent he receives a financial benefit from the property. When the life tenant occupies the property, his financial benefit is measured by the fair market rental value of the property.
A tenancy for years - definition, termination, notice?
A tenancy for years is an estate measured by a fixed and ascertainable amount of time. Termination occurs automatically upon the expiration of the term; no notice is required.
Assignment. Definition. Assignee liability to the landlord
An assignment is a complete transfer of the tenant’s remaining lease term. Assignee tenants are in privity of estate with the landlord, and thus they are liable to the landlord for the rent and any other covenants in the lease that run with the lease.
Absent contrary language, an ——is part of a contract to sell real property.
Absent contrary language, an implied covenant of marketable title (i.e., a title free from defects) is part of a contract to sell real property.
Doctrine of merger and breach of contract action regarding the marketable title
under the doctrine of merger, obligations contained in the contract of sale, including the seller’s duty to deliver marketable title, are merged into the deed and cannot thereafter be enforced through a breach of contract action.
Doctrine of equitable conversion + Seller’s casualty insurance
Under the doctrine of equitable conversion, equitable title to real property passes to the buyer upon entering the contract, even though the seller retains legal title. Most jurisdictions place the risk of loss between the contract and the closing on the buyer. However, if the seller has casualty insurance on the property, the seller must give the buyer credit in the amount of insurance proceeds against the purchase price.
Does a shelter rule provide protection to a BFP son who had inquiry notice of the land?
A race-notice statute requires a subsequent purchaser to take the interest without notice of a prior conflicting interest and be the first to record. Although grantees who acquire title to property by gift, intestacy, or devise are not protected by the recording act against prior claims, grantors who are protected by the recording act protect (or “shelter”) their grantees who would otherwise be unprotected. Here, the woman is protected by the race-notice act because she purchased the property without notice of its prior transfer to the charity and recorded her deed before the charity recorded its deed. As a protected purchaser of the property, she shelters her son, who as a donee of the property, would otherwise not be protected by the recording act.
Ademption
Under the doctrine of ademption, a devise fails (or is “adeemed”) because the testator no longer owns the property upon death.
Estoppel by deed
Under the “estoppel by deed” doctrine, a grantor who conveys a real property interest by warranty deed before actually owning it is estopped from later denying the effectiveness of his deed.
ex) A son before mother’s death granted the land - later claiming after mother’s death that he wants the land
Enforceability of a promissory restraint on alientation
A promissory restraint on alienation, such as a right of first refusal, may be enforceable by an injunction if it is reasonable.
If a deed is silent or ambiguous as to the transferee-buyer’s liability, then the transferee-buyer is considered to have taken the property —— the mortgage obligation
SUBJECT TO
Mortgage –> payment but defaulted –> notice of foreclosure –> Mortgagor offered to pay the rem BEFORE the foreclosure. What right?
Doctrine of equity of redemption. After default on a mortgage obligation, but before a foreclosure sale, the mortgagor may regain clear title to the property under the doctrine of equity of redemption. The mortgagor must pay the amount of the loan obligation currently owed, which, if there is an acceleration clause, can be the full amount of the unpaid loan obligation, plus any accrued interest.
Without reserving the right to foreclose
Without reserving the right to foreclose
Deed in lieu of foreclosure transaction –> does it eliminate junior mortgage interests?
No.
License + Transfer of the land?
In which instances the license not revoked?
Generally, a license is revoked upon the transfer of the servient land.
When the other party detrimentally relied
Equitable servitudes and its requirements
Equitable servitudes are covenants about land use that are enforced at equity by injunction. For a servitude to be enforced at equity, it must be in writing and meet the following requirements: (i) there must be intent for the restriction to be enforceable by and against successors in interest, (ii) the servitude must touch and concern the land, and (iii) if the person against whom the servitude is to be enforced is a purchaser, he must have notice (whether actual, record, or inquiry notice) of the servitude.
Can a third party enforce equitable servitudes?
No. Restriction touches and concerns the land because it affects the owners as property owners, not merely as individuals.
Equitable servitudes. vs. Zoning
Zoning wins.
comomn law doctrine of worthier title
the doctrine of worthier title was a legal doctrine that preferred taking title to real estate by descent over taking title by devise or by purchase. It essentially provides that a remainder cannot be created in the grantor’s heirs, at least not by those words.
A doctrine in real property law creating a presumption that when a grantor conveys a future interest to the grantor’s own heirs, the grantor actually intended to keep the interest in himself or herself.
Rule of Convenience
1) Rule of convenience as a savior
The rule of convenience, which is a rule of interpretation, can operate to prevent the application of the Rule to a class transfer. Under this rule, membership in a class closes whenever any member of the class is entitled to immediate possession of a share of the class gift.
Example 1: A conveys Blackacre “to B for life, and then to B’s grandchildren.” At the time of the conveyance, B has one grandchild, X. X has a vested remainder subject to open. Although B may have grandchildren born more than 21 years after B’s or X’s death, the class will close upon B’s death because B has a grandchild, X. Consequently, X and any other grandchildren born prior to B’s death will take Blackacre. The Rule will not apply to void their interests in Blackacre.
Transferability of vested remainder
A vested remainder interest is transferrable during the holder’s life as well as upon death.
Transferability of executory interests
In most jurisdictions, an executory interest may be transferred during the holder’s life as well as upon her death.
Expectancy
An expectancy is not a true property interest, only a right that will not come into existence until the happening of an event. For example, an heir is said to have an expectancy of an inheritance, but the heir has no legal right to any property until the death of the property owner to whom the heir is related.
Severance of JT by one party + 3 parties own by JT. JT destroyed and affects the other two?
Yes. becomes TIC NONONONONONO
NO. it does not affect the other JTs of the other two.
“JT + Right of survivorship” + unequal share distribution. JT created?
Nope. Although the owner used the term “joint tenants with the right of survivorship” in devising the undeveloped land to her brother and sister, each held their interest in the property as tenants in common with one another. They did not own equal shares of the land because the sister was devised a 2/3 interest, while the brother was devised a 1/3 interest.
Tenancy at will + one party expressly given the right of termination. Result?
A tenancy at will is a leasehold estate that may be terminated by either the landlord or the tenant. If only one party is expressly given the right to terminate the leasehold, the lease may, when taking into account all other circumstances, be unconscionable. In such a case, either party is given the ability to terminate the lease.
Termination rights in tenancy at will - asymmetry between the landlord and the tenant
termination rights in at-will tenancies can be limited; for example, a landlord is not granted an implied right of termination when a lease expressly gives a tenant the right of termination but is silent as to the landlord.
When is the implied convenant of marketable title present in the land sale transaction?
Absent contrary language, an implied covenant of marketable title (i.e., a title free from defects) is part of a land sales contract, regardless of the type of deed created.
Defects in the title that render it unmarketable
i) Title acquired by adverse possession that has not yet been quieted (i.e., supported by a judicial decree);
ii) Future interests wherein the holders of such interests have not agreed to the transfer;
iii) Private encumbrance (e.g., mortgage, covenant, option, or easement);
iv) Violation of a zoning ordinance; or
v) Significant physical defect (e.g., an encroachment that is incurable).
Option-holder’s proposal to alter the terms for purchasing the property -> counter offer?
No. although an offeree rejects an offer by making a counteroffer, an option holder may propose to alter the terms for purchasing the property subject to the option without sacrificing the right to exercise the option
Things that toll the statute of limitations of AP
The statute of limitations for quiet-title actions against those alleging adverse possession does not run against a true owner who is afflicted with a disability at the inception of the adverse possession. Insanity, infancy, and imprisonment may all qualify as disabilities that toll the statute of limitations.
Define “hostile” in AP
Among the requirements for adverse possession is that the adverse possession must be hostile. In a majority of jurisdictions, “hostile” merely means without the owner’s permission; it does not require that the possessor purposefully seeks to defeat the owner’s title because the intent of the possessor is irrelevant.
In jurisdictions that consider intent, some will grant title to a possessor who, in good faith, thought he had the legal right to possess (i.e., believed that the property was not owned or thought that he owned the property).
Others require the intent to be based on bad faith (i.e., aggressive trespass).
Requirements for an effective deed.
The document was valid as a deed because it identified the grantor and grantee,
contained a description of the property, and
was signed by the grantor.
In the deed, the owner expressed his intent that the transfer take place immediately.
By giving the deed to a third party without reserving the right to reclaim the deed, the owner effected delivery of the deed.
When is the acceptance of the deed presumed?
Finally, although the son did not physically accept the deed until after the owner’s death, the son’s acceptance is presumed at the moment that the owner delivered the deed to the neighbor since the transfer was beneficial to the son.
What does ‘the delivery of the deed’ actually mean?
Although it is often stated that a deed must be delivered in order for a real property interest to pass (i.e., a delivery requirement), the term “delivery” is used as shorthand for the existence of the necessary grantor
intent.
Physical transfer of a deed is not required and is not conclusive evidence of the grantor’s intent.
The execution and recording of a deed creates a rebuttable presumption that the deed is to be presently operative.
When there is no recording act, which rule governs? What is the rule’s requirement?
if the recording act does not govern, the common law first in time, first in right rule generally applies to determine priorities between competing interests in land.
All of the recording acts require that the later grantee acquired the property for value in order to be protected by the act.
The Common law doctrine of exoneraiton of liens
The devisee of real property is entitled under the common-law doctrine of exoneration of liens to have any outstanding balance of a mortgage or other encumbrance on the property to be paid from the remaining assets of the testator’s estate.
Doctrine of satisfaction / Ademption by Satisfaction
The doctrine of satisfaction follows from the principle that the equity imputes an intention to fulfil an obligation.
The doctrine of ademption by satisfaction provides for the situation in which a testator decides to change the timing of a gift in order to permit the beneficiary to enjoy the benefits of the gift before the testator’s death. If a pecuniary gift is given before the death of the testator, the same devise in the testator’s will is considered already fulfilled and is not given after his death.
Ademption
Under the doctrine of ademption, the transfer of property by a testator subsequent to the execution of a will removes the property from his estate and the devise of the property is adeemed.
)Condo sold after will execution –> no proceed payment to you!
Here, the son could contend that the devise of the cabin to the widower’s niece was adeemed when the widower sold the property during his lifetime.
In a title theory state, legal title is in the—— until the mortgage has been fully satisfied.
Mortgagee(bank(
An acceleration clause in the mortgage
An acceleration clause provides that the full amount of the mortgage obligation becomes due upon default.
Countervailing equities against returning the real property
a court will not order the return of the property if there are countervailing equities, such as the ownership of the property by a good faith purchaser.
Buyer did not assume the mortgage. Bought ‘subject to’ mortgage. Can the bank still foreclose?
Y.
Theory of mortgage (lien/title) - irrelevant to the foreclosure
Although the buyer did not assume the limited partnership’s loan, the buyer nevertheless took the land subject to the bank’s mortgage. Consequently, although the buyer was not personally liable to repay the loan, the bank has the right to enforce its security interest through foreclosure.
The third party entered into a new loan with the bank and the bank agreed to excuse the individual’s loan obligation. What results with regard to the individual’s loan obligation?
Novation
Transfer of mortgage. Transferor still liable for the note that is secured by the mortgage?
Yes. Following the transfer of a mortgage, the investor, as maker of the note, remains liable on the note absent a release by the bank or other act that would discharge the investor’s liability.
Assumption of mortgage
- effect on transferor’s liability
- effect on transferee’s liability
assumption of a mortgage by a transferee of the mortgaged property does not eliminate the transferor’s liability,
but instead makes the transferee also liable to the mortgagee for payment of the note.
Foreclosure by a junior interest holder. Possible?
Yes. Foreclosure by junior interest holder does not impact senior interests.
Purchase money mortgage
A purchase-money mortgage is a mortgage granted to (i) the seller of real property or (ii) a third-party lender, to the extent that the loan proceeds are used to acquire title to the real property or construct improvements on the real property if the mortgage is given as part of the same transaction in which title is acquired.
A purchase-money mortgage has priority over mortgages and liens created by or that arose against the purchaser-mortgagor prior to the purchaser mortgagor’s acquisition of the property, whether or not recorded.
Purchase price reflecting the assumption of mortgage + Purchaser of the mortgaged property who assumed the mortgage. Can assert defenses of the mortgagor(the original seller) against the enforcement of the mortgage?
What is the reason?
No. If the purchase price reflects the assumption of the mortgage, the purchaser of a mortgaged property who assumes the mortgage cannot assert the defenses of the mortgagor-seller against the enforcement of the mortgage. Otherwise, the purchaser would, by being permitted to avoid the assumed obligation, be unjustly enriched. (Note: A deed of trust functions as a mortgage in many states.)
Covenant - Touch and Concern requirement
To run with the land, a covenant must touch and concern the land, which means that the benefit or burden must affect both the promisee and the promisor as owners of the land, and not merely as individuals. The benefit in this case is an economic benefit, rather than a benefit affecting the land’s physical use.
Requirements of enforceable convenant.
In order for a covenant to be enforceable it must be in writing, with the intent that the duties and rights run with the land, must touch and concern the land, subsequent purchasers must have notice of the covenant (either actual, constructive, or inquiry notice), and the parties must have horizontal privity (the estate and the covenant are contained in the same instrument) and vertical privity (an unbroken chain of ownership from the original parties).
Available remedies for equitable servitude
Only injunctions.
Termination of covenant. How?
A covenant can be terminated by abandonment if the parties to the covenant act in an affirmative way that shows a clear intent to relinquish the covenant right; mere nonuse, however, or statements of intent without affirmative conduct, will not constitute abandonment.
Fixture - part of the real property?
Any restrictions?
Yes. Fixtures, or structures built on real property, become part of the realty.
whether the man paid for its construction or not. Absent some other legal prohibition not mentioned in the facts, the buyer could unilaterally decide to tear down the wall.
Fructus naturales
Fructus naturales are wild crops that are not cultivated; such crops are considered real property and pass automatically with the land.
A private nuisance .
Standing?
A private nuisance is a substantial, unreasonable interference with another individual’s use or enjoyment of his property. The interference may be intentional, negligent, reckless, or the result of abnormally dangerous conduct.
Anyone with possessory rights in the property may bring a nuisance claim.
Public nuisance claim
A public nuisance is an unreasonable interference with the health, safety, or property rights of the community. Although the smells emanating from the project site are adversely affecting those who live in the area, to recover for a public nuisance, a plaintiff must show that he suffered a different kind of harm than that suffered by the rest of the community.
