MEE - Real Property Flashcards
*What makes a deed valid?
(3) The parties may be identified by name or by describing them in some way. IF the grantee’s name is left blank, some courts presume that the person taking delivery has authority to fill it in, and if he does, the deed is valid.
To be valid, a deed must (1) be in writing, (2) sufficiently describe the land, (3) identify the grantor and grantee, (4) evidence of intention to convey the land, and (5) be signed by the grantor.
-Titled passes effective delivery and cannot be rescinded.
-Present intent controls; physical transfer not necessarily required.
-If a red is transferred with conditions or via a third party, courts look at grantor’s intent and whether she retains control to rescind.
-Grantee must accept the deed; acceptance is usually presumed. Importantly a nonexistent void entity cannot accept a deed.
*How do you establish titled by adverse possession?
To establish title by adverse possession, the possession must be (1) actual and exclusive, (2) open and notorious, (3) adverse (hostile/under a claim of right), and (4) continuous throughout the statutory period.
Exclusive possession means not sharing possession with the true owner or general public.
Possession is open and notorious when it is such that the usual owner would make of the the and and is sufficient to put the owner on notice of the possession.
Possession is hostile when it is without the owner’s consent; it does not matter whether the possessor believes he is on his own land or knows he is trespassing.
Continuous possession is possession that the average owner would make of the property.
In most states, payment of property taxes is not required to establish title by adverse possession but is good evidence of a claim of right.
*What is a notice statute?
Under a notice statute, a subsequent bona fide purchases prevails over a prior grantee regardless of whether he records.
*What is a bonafide purchaser for value?
A BFP is a purchaser who takes for valuable consideration and without notice of a prior claim at the time of the conveyance.
Actual notice is what the purchaser actually knows. Record notice is notice that the law imputes to the purchaser if a prior deed was properly recorded in the grantee’s chain of title. Inquiry notice is notice of what the purchaser would have discovered by inquiring into the property.
*What is a Race-Notice Statute?
First subsequent BFP to record prevails.
*What is a joint tenancy?
At common law, a conveyance to two or more persons satisfying the four unities of time, title, interest, and possession created a joint tenancy.
Joint tenants have the right of survivorship. When one tenant dies, the property is freed from her interest.
Lien theory of mortgages: In states that follow the lien theory, one joint tenants execution of a mortgage on her interest does not by itself cause a severance; however, the mortgagee risks losing its interest if the mortgagor dies prior to foreclosure.
Title theory of mortgages: In states that follow the title theory, a mortgage is regarded as a transfer of title, which destroys the unity of title and severs the joint tenancy. In most states, a severance results when one joint tenant executes a valid contract to convey her interest to another.
*What is a tenancy in common?
An estate with multiple tenants in which each co-tenant owns a distinct, undivided interest an each has a right to possession of the whole estate.
-Freely transferable: Each interest is freely descendible, devisable, and alienable. Co-tenant interests can be transferred upon death. A Co-tenant can lease his individual interest, which transfers his right of possession to lessee, but co-tenants have right to share in rents from third-party lessee.
There are no survivorship rights.
A co-tenant may seek judicial partition ; if not feasible, property may be sold and proceeds apportioned among co-tenants.
*Explain Equitable conversion and Risk of Loss in Land Sale Contracts.
Equitable conversion: During escrow, buyer owns the real property, but seller owns personal property. The seller holds legal title in trust for the buyer. Any judgement against the seller for claims arising before the contract converts into an interest in sale proceeds; judgment is not enforceable against real property owner.
Risk of Loss: If property is destroyed before closing through no fault of the parties, buyer bears the risk of loss in most jurisdiction. This applies even if buyer has not taken possession. Parties may contract differently. Seller must credit any insurance proceeds from loss against the purchase price.
Death of a party: If buyer or seller dies before closing, rights to the contract pass according to interests held. Seller’s interest passes as personal property. Buyer’s interest passes as real property.
*What are issues that may arise with recording statutes and chain of title?
Shelter rule: One who takes from a BFP will prevail against any interest the transferor-BFP would have prevailed against, even if the transferee had actual knows of a prior conveyance. Protects donees or devisees of BFPs who cannot qualify as BFPs and would not otherwise receive protection under notice or race-notice statutes.
Wild Deeds: A recorded deed unconnected to the chain of title in a grantor-grantee index system. Record notice cannot be derived from a wild deed.
Estoppel by deed: A grant who conveys titled to land he does not then own is estopped from subsequently acquiring the same land. Titled automatically passes to the benefit of grantee.
*What are the requirements for the burden and benefit of a covenant to run with the land?
Burden to run: Requires
(1) Original covenant was in writing
(2) Intent: Parties intend to bind successors in interest
(3) Touches and concerns the land - must affect parties’ legal relations as landowners.
(4) Horizontal and vertical privity must exist between interested parties.
-Horizontal privity: Relationship between the covenanting parties (grantor/grantee, landlord/tenant, fee ownership/easement right in same land, mortgagor/mortgagee)
-Vertical privity: Relationship between covenanting parties and their successors in interest (contract, devise, descent) - must acquire entire interest
(5) Notice: successor in interest had notice of the covenant when she took her interest. - does not apply to descent/divise
*What is a fee simple subject to condition subsequent?
A fee simple subject to a condition subsequent is created when the grantor retains the power to terminate the estate of the grantee upon the happening of a specified event. upon the happening of the event stated in the conveyance, the estate of the grantee continues until the grantor exercises his power of termination (right of reentry) by bringing suit or making reentry. Generally, the grantor must expressly reserve the right to entry; this retained interest does not automatically arise. The following words are usually held to create a conditions subsequent: “upon condition that,” “provided that,” “but if,” and “if it happens that.”
Transferrable: alienable, devisable, and descendible, subject to the occurrence of the given event or condition.
The general policy of courts is to avoid forfeiture of estates. Thus where the terms of a conveyance are ambiguous, there is a presumption in favor of the fee simple subject to condition subsequent because forfeiture is not automatic.
*What is a fee simple determinable?
A fee simple estate that automatically terminates and reverts back to the grantor upon the happening of a given event or condition. It is created by the use of durational, adverbial language, such as “for so long as,” “while,” “during,” or “until.” The grantee takes the land subject to the termination of the estate by the happening of the event.
Transferrable: alienable, devisable, and descendible, subject to the condition.
*What is an easement?
An easement is a non-possessory property interest that covers a right to use another’s land. The burdened land is known as the servant estate, and the benefited land is known as the dominant estate.
Types of easements:
(A) Easement appurtenant: Entitles a dominant estate owner to use a servant estate’s land. It attaches to the dominant estate and passes automatically.
(B) Easement in gross: Entitles an individual or entity to use the servient estate. Attaches only to the servant estate, there is no dominant estate. (placement of billboards, rights to fish, utility lines).
(C) Affirmative easement: Entitles its holder to make affirmative use of the servant estate.
(D) Negative easement: Entitles its holder to restrict the servant estate from otherwise permissible activities.
Easements may be created by prescription, implication, necessity, or expressly by grant or reservation.
*How may an easement be terminated?
(A) Abandonment: An easement is terminated if its holder physically demonstrates an intent to permanently abandon it. Mere words or non-use are insufficient.
(B) Merger: Easement terminates automatically if one person acquires title of both the easement and the servant land. Re-dividing the merged tilted will not revive the easement.
*What is the priority of creditors in a foreclosure?
Priority of creditors: Creditors must record their interests.
(A) Recorded interests take priority in the order recorded.
(B) Purchase money Mortages: Superior to all interests
-Creditors can agree to subordinate priority to a junior creditor.
(C) Junior interests: Terminated by foreclosure of a superior claim.
-Junior interest holders can seek a deficiency judgment against debtor, but they have no interest in the subject property.
-Junior interests are necessary parties and must be included in a senior foreclosure action. Otherwise the junior interest will remain on the land.
(D) Senior interests: Are unaffected by junior interest foreclosures: Buyer of foreclosed property takes it subject to senior interests. Buyer is not liable for senior debt, but the senior mortgage remains on the land.
Order of priority:
(1) Costs from sale of foreclosure
(2) Mortgage being foreclosed
(3) Junior liens in order of priority
(4) Debtor.
-If a mortgage obligates the lender to make further advances of funds after the mortgage is executed, those future advances will have the same priority as the original mortgage.
