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Property II > Mid Term > Flashcards

Mid Term Flashcards

1
Q

Applies only to the sale or rental of “dwellings”
It is unlawful to:
Refuse to sell or rent a dwelling to any person based on race, color, religion, sex, handicap, familial status, or national origin

Discriminate against any person in the terms and conditions of a sale or rental of a dwelling based on the protected categories

Make, publish or advertise any preference, limitation or discrimination based on the protected categories

Discriminate in the sale or rental because of a handicap of the buyer or tenant

Refuse to make reasonable modifications to the premises to accommodate a handicapped tenant

A

Fair Housing Act of 1968

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2
Q

FHA does not apply to any single-family house sold or rented by the owner provided the owner:
Does not hold title to more than 3 single-family houses, and
Does not use in any manner the rental facilities or rental services of a real estate broker

A

Exemptions under the FHA

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3
Q

Religious organizations
Dormitories, fraternities, and sororities
Senior housing
“Rooming houses”: rooms or units in dwellings which contain living quarters occupied or intended to be occupied by no more than 4 families living independently of each other, if the owner actually resides in one of the living quarters

A

exempt under the FHA

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4
Q

All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.

A

Civil Rights Act

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5
Q

covers 7 types of discrimination but only applies to selling, renting, or advertising a dwelling

A

FHA

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6
Q

covers only racial discrimination but is not limited to dwellings

A

CRA

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7
Q

Fixed duration which is agreed upon in advance
Does not have to be for years; can be for a number of months
Once the term ends, the right of possession automatically terminates
Frequently used in commercial leases and residential leases

A

Tenancy for years (a/k/a term of years tenancy)

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8
Q

Automatically renewed for successive periods unless the landlord or tenant terminates by giving advance notice
State statutes govern how much notice must be given
Can be year-to-year, month-to-month, week-to-week
Frequently used in residential leases

A

Periodic tenancy

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9
Q

No fixed end
The tenancy continues until one party terminates
State statutes govern how much notice must be given; it is usually equal to the frequency of rent payments (monthly, yearly, etc.)
Automatically terminates upon either party’s death, tenant’s abandonment, or landlord’s sale of the property
Usually arises when there is no written lease

A

Tenancy at will

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10
Q

Label given to a holdover tenant who remains in the premises beyond the term of his lease
Created when a tenant who rightfully took possession of the premises continues beyond the term of his lease
State statutes govern how the estate is terminated and whether rent may be increased

A

Tenancy at sufferance

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11
Q

If a lease does not meet the criteria of a term of years or a periodic tenancy, and if the tenant is not a “holdover”, the lease MUST be a

A

Tenancy at will

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12
Q

T has sufficient legal and equitable remedies (T can sue to evict the former tenant)
LL should not be held accountable for the wrongful act of a third party
English rule might prevent LL from leasing the premises until the prior tenant has moved out
this would lead to increased rent to all tenants to account for the lost rent for the “downtime” between tenants

A

American Rule

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13
Q

Serves the reasonable expectations of the parties
LL is in a better position to know if the prior tenant is vacating on time
LL has access to the evidence needed to determine and prove that the prior tenant should be evicted
T bargained for space, not for a lawsuit to evict the prior tenant
If T has to evict the prior tenant, it is an increased cost to T that T did not factor into the amount T was willing to pay in rent

A

English Rule

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14
Q

If Prior Tenant Doesn’t Vacate

New tenant has the right to bring an eviction action against the prior tenant and to recover damages from the prior tenant
New tenant does not have a claim for damages against the landlord

A

American Rule

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15
Q

If Prior Tenant Doesn’t Vacate

New tenant may terminate the lease and sue the landlord for damages, OR
New tenant may affirm the lease, pay no rent until the premises are vacant, and sue the landlord for damages

A

English Rule

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16
Q

Depriving the tenant of even one inch of the premises constitutes a breach of the covenant of quiet enjoyment and relieves the tenant from all obligations to pay rent
Note that tenant will be liable in quasi-contract for the actual rental value of the premises if the tenant remains in possession

A

One Inch Rule

Partial Actual Eviction

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17
Q

Wrongful conduct by LL that substantially interferes with T’s use and enjoyment of the premises

A

Constructive Eviction

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18
Q

There must be substantial interference with the tenant’s use and enjoyment of the premises, and
The tenant must vacate the premises within a reasonable time

A

Constructive Eviction

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19
Q

The interference need not totally prevent use of the premises, but a minor interference is insufficient
The key is whether a reasonable person would see the interference as so serious that the leased premises cannot be used in a normal manner for the intended purpose

A

substantial interference

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20
Q

Traditional rule is that a landlord’s actual eviction of the tenant extinguishes the tenant’s entire liability for future rent, whether the eviction was total or partial

A

Actual Eviction

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21
Q

Tenant has a choice of remedies: terminate the lease, withhold rent, sue for damages, repair and deduct, injunction for repair

A

Implied Warranty of Habitability

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22
Q

Modern trend is to require compliance with local housing codes and the general standard of habitability

A

IWH

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23
Q

T must notify LL of the defects (preferably in writing)
T must allow LL a reasonable time to cure
Unlike constructive eviction, T is not required to vacate the premises
T has a choice of several remedies

A

To invoke the IWH

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24
Q

Tenant claiming a breach of the ________ __ ______ ________ must vacate the premises within a reasonable time

A

covenant of quiet enjoyment

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25
Q

Tenant claiming a breach of the IWH has a choice of remedies:

Termination of the lease

Withholding rent
In most jurisdictions, T may withhold all rent, even for a partial breach of the IWH
Breach of the IWH is a defense to eviction for failure to pay rent
Sue for damages

T may remain in the premises or vacate
Courts differ on the appropriate measure of damages

Repair and deduct

Injunction or specific performance

A

choice of remedies IWH

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26
Q

The determination of whether a dwelling is “habitable” depends on the facts of each case
The IWH does not require the LL to maintain the premises in perfect condition
Minor code violations or other minor defects do not automatically constitute a breach of the IWH
Compliance with codes constitutes a prima facie case of LL’s compliance with his duty to provide habitable premises
Code violations are not necessary to establish a breach so long as the defect has an impact on the health or safety of a tenant
It is possible for a LL to be in compliance with codes but still breach the IWH (e.g., mold)

A

Whether the IWH Has Been Breached

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27
Q

LL must maintain “_______ _____ _______” and ensure that the premises are fit for human occupation

A

bare living requirements

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28
Q

The LL’s failure to act or failure to remedy a problem substantially interferes with T’s use and enjoyment of the premises, and
The condition is a substantial threat to the health or safety of the occupants, or the premises cannot be used for its normal purpose as a residence

A

Breach of IWH

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29
Q

IWH cannot be _________

A

Waived

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30
Q

tenant must prove:
Wrongful conduct (may be an act or an omission to act)
By landlord
That substantially interferes with tenant’s use and enjoyment
Tenant MUST vacate within a reasonable time
Cannot be waived by tenant
Tenant’s remedy is to terminate the lease

A

Covenant of Quiet Enjoyment

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31
Q 
Under common law, every lease includes an implied covenant of quiet enjoyment
Promise by LL that LL will not wrongfully interfere with T’s possession of the premises
Actual eviction (obviously) violates the covenant
Actions short of actual eviction can also substantially interfere with T’s possession - those actions constitute constructive eviction
A

Covenant of Quiet Enjoyment

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32
Q

Active interference with T’s possession or interference that results from LL’s inaction in the face of a legal duty to act, and
Interference that is attributable to LL, LL’s agent, or a paramount title holder, and
After timely notice and a reasonable opportunity to correct the problem, T must vacate the premises

A

Covenant of Quiet Enjoyment

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33
Q

LL’s breach of the covenant of quiet enjoyment may lead to a claim by T of _________ _________

A

constructive eviction

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34
Q

____________ is a transfer for the entire remainder of the term; sublet is anything less

A

assignment

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35
Q

Each party has rights and duties under property law regardless of contract law
These rights and duties are those that “run with the land” – also called the “real covenants” (this includes most terms of a lease)

allows both parties to enforce the real covenants in the lease

A

privity of estate

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36
Q

Each party has rights and duties under contract law

allows both parties to enforce all covenants in the lease (both the real covenants and the personal covenants)

A

privity of contract

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37
Q

Term of the lease
Conditions on the use of the premises
Obligation of T to pay rent
Obligation of LL to make repairs and provide services

A

Real Covenants:

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38
Q

Obligation to pay the other party’s attorneys’ fees if litigation occurs
Payments for equipment or other personal property

A

Personal Covenants:

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39
Q

An ____________ occurs whenever a tenant transfers the right of possession to all or a portion of the premises for the full time remaining on the term of the lease

A

assignment

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40
Q

A ___________ is created whenever a tenant transfers the right of possession to all or a portion of the premises for a time that is less than the full time remaining on the term of the lease

A

sublease

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41
Q

Whether the transfer is an assignment or a sublease depends on the ________ of the parties

A

intent

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42
Q

If no assumption, sublessee cannot be sued for money

LL’s only option is to evict sublessee in possession if not paying rent

A

Landlords options

Sublease

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43
Q

Assignee can be sued for rent, but only for the period when assignment occurred b/c in privity of estate

A

Landlords options

Assignment

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44
Q

In the absence of a covenant that prohibits transfer, the tenant has an _________ ______ to transfer either as an assignment or as a sublease

A

absolute right

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45
Q

A covenant against assignment will only prohibit assignments – subleases will be allowed

A covenant against subleasing will only prohibit subleases – assignments will be allowed

A

Prohibitions by LL

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46
Q

That LL may prohibit assignment or subleasing altogether, or

That LL permit assignment or subleasing with LL’s consent, or

Be silent on the issue of assignment and subleasing (in which case the default rule applies, meaning T is free to assign or sublease without obtaining LL’s consent)

A

LL & assignment or sublease

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47
Q

Three Standards of LL consent

A

Reasonableness
Sole Discretion
No Standard Stated

48
Q

Where a lease does not specify the standard to be applied, LL may withhold consent to a proposed assignment or sublease only if LL has a commercially reasonable objection to the proposed assignment or sublease

A

LL Consent to assignment/sublease

Modern trend / minority rule - reasonableness

49
Q

Where a lease does not specify the standard to be applied, LL may withhold consent in LL’s sole discretion, even if it is arbitrary and not commercially reasonable

A

LL Consent to assignment/sublease

Majority rule – sole discretion

50
Q

When LL and T mutually agree to terminate the lease prior to the expiration date

A

Surrender

51
Q

When LL seeks to retake possession of the premises due to a default by T

A

Eviction

52
Q

When T vacates the premises without justification and without the intention of returning and T defaults in the payment of rent

A

Abandonment

53
Q

Terminate the lease
LL could accept T’s surrender of the lease thereby terminating the lease and T’s liability for rent that would have accrued under the lease in the future

Mitigate and sue
LL could refuse to accept T’s surrender of the lease, but re-enter the premises and re-lease to a replacement tenant, then sue T for any lost rent

A

Abandonment LL could

54
Q

Landlord has an obligation to __________ _______ in both residential and commercial leases

A

mitigate damages

55
Q

The duty to ________ applies to both residential leases and commercial leases

A

mitigate

56
Q

LL has the burden of proving he used ________ ________ to re-let the abandoned premises

A

reasonable diligence

57
Q

LL is not required to accept _______ ______ rent or substantially alter other lease terms

A

below-market

58
Q

T is also liable for all _________ _______ incurred by LL in attempting to re-let the premises

A

reasonable expenses

59
Q

landlord cannot evict for certain actions by tenant (e.g., reporting code violations)

A

Retaliatory Eviction

60
Q

Tenant cannot ______ the prohibition on self-help evictions

A

waive

61
Q

Under modern law, ________ eviction is generally prohibited; LL’s only option is to bring suit against T for eviction

A

self-help

62
Q

The rule: in a majority of states, the only lawful way to remove a defaulting tenant is to evict the tenant through the ________ _______

A

judicial process

63
Q

Upon T’s default, LL could bring suit against T to obtain a judgment ordering T’s eviction, then have the judgment enforced by the local law enforcement

A

Judicial eviction

64
Q

Oral agreements for the sale of real property are not generally enforceable
Contracts for the sale of real estate must be in writing and must contain certain essential terms
Also applies to documents for the conveyance of an interest in real property (deeds, mortgages

A

Statute of Frauds

65
Q 
At a minimum, the writing must:
Identify the buyer and the seller
Identify the purchase price
Identify the property
Be signed by the party against whom enforcement is sought
A

Statute of Frauds

66
Q

Oral contract may be enforced if there is some combination of:
Transfer of possession
Payment of a portion of the purchase price
Making of improvements

A

Part Performance

67
Q

Oral contract may be enforced if:
One party acts to his detriment in reasonable reliance on the other party’s oral promise, and
Substantial injury would result if the contract is not enforced

A

Equitable Estoppel

68
Q

Unless the real estate contract specifies a different standard, the seller is _______ to deliver “marketable title” to the real property

A

obligated

69
Q

The promise of the seller to deliver ________ ______ is expressly or impliedly included in every real estate contract (unless the contract specifies a different standard)

A

marketable title

70
Q

title that is reasonably free from doubt as to its validity

A

Marketable Title

71
Q

Title is not “reasonably free from doubt” if it exposes the owner to potential litigation

A

Marketable Title

72
Q

If a reasonable and prudent buyer would pay fair market value for the property, then the title is considered “marketable”

A

Marketable Title

73
Q

The seller’s interest in the property is less than the seller purports
The seller’s title is subject to an encumbrance
There is reasonable doubt as to #1 or #2

A

Unmarketable Title

74
Q

Zoning ordinances
State statutes and municipal ordinances
Defects in the condition of the property
Conditions that reduce the value of the property (such as hazardous substances)

A

Encumbrances or conditions that do not render title unmarketable:

75
Q 
Mortgages
Liens
Judgments
Utility easements 
Other easements and rights of way
Private restrictions and restrictive covenants
A

Encumbrances or conditions that do render title unmarketable:

76
Q

Seller is required to deliver marketable title at the ______

A

closing

77
Q

During the inspection period, the seller has the opportunity to _____ any title defects

A

cure

78
Q

The buyer cannot rescind the contract until the seller ____ __ ______ marketable title at the closing

Exception: if it is CLEAR that seller will not be able to deliver marketable title at closing, buyer may have the right to rescind the contract prior to closing

A

fails to deliver

79
Q 
Perfect title
Title acceptable to the buyer
Marketable title
Insurable title
Record title
A

Hierarchy of Title Standards

80
Q

presence of any encumbrance makes title ___________ (unless the contract specifies that the buyer will accept the property with that type of encumbrance)

A

unmarketable

81
Q

The mere existence of _________ _______ and similar laws does not render title unmarketable

A

zoning ordinances

82
Q

An existing violation of a ________ _________ will render title unmarketable

A

zoning ordinance

83
Q

The marketable title doctrine only applies to _______ that are discovered before the closing

A

defects

84
Q

The buyer becomes the “equitable owner” of the property as of the time the parties execute the real estate contract

A

Equitable Conversion

85
Q

Absent an express clause in the contract regarding which party bears the risk of loss, the doctrine of equitable conversion places the risk of loss on the buyer as the equitable owner of the property during the executory period

A

Equitable Conversion

86
Q

The buyer becomes the equitable owner when the contract is executed and is responsible for the condition of the property from that date forward
Buyer bears the risk of loss during the executory period

A

Traditional Rule / Doctrine of Equitable Conversion:

87
Q

The seller, as the legal owner of the property, bears the risk of loss until the closing

A

Massachusetts Rule:

Equitable Conversion

88
Q

The party entitled to possession bears the risk of loss during the executory period

A

Emerging Rule / Uniform Vendor and Purchaser Act:

Equitable Conversion

89
Q

Under the doctrine of equitable conversion, the contract is still valid and enforceable
If the seller dies, the seller’s estate should proceed with the sale and distribute the proceeds to the heirs who receive the seller’s personal property
If the buyer dies, the buyer’s estate should proceed with the purchase and distribute the property to the heirs who receive the buyer’s real property

A

Death and Equitable Conversion

90
Q

Under the common law, disputes concerning the physical condition of the property applied the rule of caveat emptor (buyer beware) except in cases where the seller made an express warranty that the property was free of defects or the seller committed fraud by affirmatively misrepresenting the condition of the property

Seller actively concealed defects in the property, or
Seller owed a fiduciary duty to the buyer

A

Duty to Disclose CL

91
Q

In a majority of jurisdictions today (and under Johnson v. Davis), the seller of residential property has a duty to disclose defects in the property:
That are known to the seller, and
That materially affect the value of the property; and
That are not known to or readily discoverable by the buyer

A

Duty to Disclose Majority Rule

92
Q

In a majority of jurisdictions, _____ ______ ______ have the same duty to disclose as sellers

A

real estate brokers

93
Q

In most states, caveat emptor is still the rule in commercial transactions
Even in the jurisdictions that follow the majority approach, many do not extend the disclosure requirements to sales of commercial properties

A

Commercial properties:Duty to Disclose

94
Q

The transfer of real property is accomplished by the _______ __ _ ______

A

delivery of a deed

95
Q

A deed is only _________ if it is delivered and accepted

A

effective

96
Q

Once delivery has occurred, the title vests in _______

The physical location of the deed does not matter

A

grantee

97
Q

A deed _____ _____ need to be recorded to be valid

A

does NOT

98
Q

(1) the grantor intends to convey an interest in property, (2) the grantor delivers a deed to the grantee, and (3) the grantee accepts the deed.

A

A deed transfers title only when

99
Q

An undelivered deed, even if signed by 
the grantor, _______ ______

A

conveys nothing

100
Q

Seller is “on the hook” for all defects, liens and encumbrances – even those that pre-date Seller’s ownership

A

Warranty Deed (sometimes called General Warranty Deed)

101
Q

Seller is “on the hook” for defects, liens and encumbrances that occurred during Seller’s ownership of the property

A

Special (or Limited) Warranty Deed

102
Q

Seller makes no representations or warranties whatsoever

A

Quit Claim Deed

103
Q

Where the grantor delivers a deed and ________ the right to retrieve it, and attaches the condition that the deed is to become operative only after the death of the grantor, and where the grantor continues to use the property as if no transfer had occurred, then grantor’s actions are “nothing more than an attempt to employ the deed as if it were a will”

A

reserves

104
Q

“Where the grantor delivers a deed to a ______ _______ with the intent to part with all control, the legal effect of the transaction is tantamount to a delivery of the deed to the grantee . . . .”

A

third person

105
Q

Manual delivery of the deed to the grantee creates a rebuttable presumption that the deed has been delivered
Recording of a deed creates a rebuttable presumption that the deed has been delivered

A

Delivery presumptions:

DEED

106
Q

A grantee cannot be the grantee’s own escrow agent
For commercial transactions, delivery to a 3rd party acting as an escrow agent is valid
For residential transactions, delivery to a 3rd party acting as an escrow agent could be invalidated if the court determines that the grantor retained the power to revoke the instrument

A

Validity of escrows:

107
Q

The critical issue is the grantor’s _______ at the time the deed is delivered

A

intent

108
Q

Courts generally hold that “death escrows” (delivery of a deed to a 3rd party with instruction to hold it until the grantor’s death) constitute the valid delivery of the deed so long as the deed is placed with a neutral 3rd party and the grantor releases all power and control over it

A

Death Escrow

109
Q

A mortgage is an interest in real property given as _______ for the repayment of a loan

A

security

110
Q

Borrower’s promise to repay the loan; formal IOU

A

Promissory Note

111
Q

Borrower’s “pledge” of the real property as security for the repayment of the loan

A

Mortgage

112
Q

Lawsuit filed by the lender
Judgment of foreclosure is issued by the court
Public official holds a foreclosure sale

A

Judicial Foreclosure

113
Q

Permitted in many (but not all) states
Mortgage document must expressly provide for non-judicial foreclosure
Mortgagee forecloses on the property itself without a court proceeding
Mortgagee notifies mortgagor of default; if debt is not repaid within a stated number of days, the mortgagee may hold a foreclosure sale

A

Non-Judicial Foreclosure

114
Q

Extinguishes the mortgagor’s title to the property
Transfers title to the winning bidder at the foreclosure sale
Causes the secured property to be sold and apply the sales proceeds to satisfy the unpaid debt
In general, eliminates all liens and interests, including leases, that are subsequent in time to the mortgage
May result in a deficiency judgment against the borrower
Monetary judgment for the difference between the amount owed to the lender and the proceeds received through the foreclosure sale
Deficiency judgments are not always permitted; function of state law

A

Occurrence of Foreclosure

115
Q

A low price at the foreclosure sale is NOT enough to set aside the sale unless the price is “so grossly inadequate as to ______ _____ _________ of the Court”

A

shock the conscience

116
Q

Repaying the loan in full prior to the foreclosure sale
Applicable in all states

Reinstating the loan by paying the past due amount (plus the mortgagee’s costs resulting from the default) prior to the foreclosure sale
Applicable in most states

Repaying the loan in full within the statutory redemption period (3mo. to 2yrs.)
Applicable in some states

A

Saving foreclosure

Property II (12 decks)

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