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Real Property/Future Interests > Modules 12-18 > Flashcards

Modules 12-18 Flashcards

1
Q

to pass legal title from grantor to grantee, the deed must be LEAD

A

lawfully
executed
and
delivered

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2
Q

lawful execution of deed

A
  1. a writing signed by grantor
  2. unambiguous description of the land
  3. identification of the parties by name/description
  4. words of intent to transfer (“grant”)
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3
Q

description of land

A

doesnt have to be perfect, but must be unambiguous and at least provide a good lead

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4
Q

effect of insufficient land description

A

title cant be transferred

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5
Q

delivery of a deed

A

physically or manually transferred (mailing it is fine)

standard: present intent to transfer the instrument itself

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6
Q

acceptance of deed

A

presumed

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7
Q

rejection of deed

A

expressly reject; title does not pass

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8
Q

presumptions concerning delivery of deed

A
  • grantor retains possession = no delivery
  • grantee has possession = delivery
  • handed to grantee = delivery
  • acknowledged by grantor in front of a notary = delivery
  • recorded = delivery
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9
Q

use of extrinsic evidence with deeds

A

all types of evidence, including grantor’s conduct or statements BEFORE OR AFTER the alleged delivery, is admissible to prove grantor’s intent to pass title

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10
Q

If a deed is absolute on its face and is transferred to grantee with an oral condition, what happens?

A

oral condition is dropped b/c it is too vulnerable to fraud

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11
Q

delivery of deed with written conditions

A

generally valid when delivered; if the condition is the grantor’s death, the deed creates a future interest in the grantee

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12
Q

transfer of deed to third party with conditions (escrow transaction)

A

grantor may deliver an executed deed to a third party with instructions that the deed be delivered to the grantee once certain conditions are met

if written instructions are given to escrow agent, grantor is bound by the delivery to the agent

if oral instructions are given to escrow agent, grantor can change the instructions and recall the deed while it is still in the agent’s hands, UNLESS THERE IS A WRITTEN K OF SALE

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13
Q

donative escrow with conditions

A

if condition is grantor’s death - grantor cannot retrieve b/c they had the present intent to convey future interest

if condition is something other than grantor’s death - grantor can retrieve it

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14
Q

quitclaim deed

A

grantor guarantees NOTHING

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15
Q

general warranty deed

A

includes 6 covenants that are attributable to grantor OR their predecessors
1. (p) seisin - grantor owns the estate
2. (p) right to convey - grantor has power to transfer
3. (p) against encumbrances - no servitudes/liens
4. (f) quiet enjoyment - grantee will not be disturbed by third party’s lawful claim of title
5. (f) warranty - defend against reasonable claims of title by third party and compensate the grantee for any loss sustained by claim of superior title
6. (f) further assurances - do whatever is needed to perfect grantee’s title if it later turns out to be imperfect

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16
Q

special warranty deed

A

same covenants as general warranty deed, but grantor makes those promises only on behalf of himself, not his predecessors

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17
Q

statutory special warranty deed

A

creates by implication two limited assurances against acts of grantor only
1. grantor has not conveyed the same estate or any interest therein to anyone other than the grantee
2. estate is free from encumbrances made by the grantor

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18
Q

damages and remote grantees

A

remote grantees cannot enforce present covenants

if there are successive conveyances by GWD and the last grantee is evicted by lawful claim of title, HE MAY SUE ANYONE UP THE LINE

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19
Q

defective deeds

A

void - set aside even if property has passed to BFP (forged, never delivered, issued to nonexistent grantee, obtained by fraud in the fact [grantor was deceived and did not realize that she was executing deed])

voidable - set aside only if the property has not passed to BFP (executed by minors/incapacitated people, fraud in inducement, duress, undue influence, mistake, breach of fiduciary duty)

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20
Q

fraudulent conveyances of deeds

A

may be set aside by grantor’s creditors if it was made:
1. with actual intent to hinder, delay, or defraud any creditor of the grantor; or
2. without receiving aa reasonably equivalent value in exchange for the transfer, and the debtor was insolvent or became insolvent as a result of the transfer

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21
Q

when are deeds based on fraudulent conveyance not set aside?

A

against any grantee who took in good faith and paid reasonably equivalent value

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22
Q

closing disclosures

A

residential mortgage lenders must provide within 3 business days prior to closing; details about mortgage including:
1. principal, interest, and payment amounts
2. closing costs
3. any potential surprises to mortgagors
4. cash required to close

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23
Q

notice of defects upon closing (disclosures)

A

seller who fails to disclose KNOWN defect that must be disclosed in disclosure form will be liable for defect AFTER closing

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24
Q

race statutes

A

first in time, first in right

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25
notice statutes
last BFP to take wins; recording does not matter subsequent purchaser who had NO NOTICE of a prior conveyance by the grantor will prevail over a prior grantee who failed to record ex. A conveyance of an interest in land (O to A) shall not be valid against any subsequent purchaser for value (B), without notice thereof, unless the conveyance is recorded (duty on A)
26
race-notice statutes
last BFP wins if he is the last to take AND he records ex. Any conveyance of an interest in land (O to A) shall not be valid against any subsequent purchaser for value (B) without notice thereof, whose conveyance is first recorded (duty on B)
27
can donees, heirs, and devisees ever be BFPs?
generally no; they have to be a purchaser for value
28
does the shelter rule protect the doomed donee?
yes
29
chain of title - transferees from BFP (shelter rule)
anyone who takes from BFP will prevail against any interest the BFP would have prevailed against steps into shoes of transferor even if they would fail under the statute ex. O conveys to A, who does not record. Later, O transfers the same parcel to B, a BFP, who records. B then conveys to CC, who is a mere donee or who has actual knowledge of the O to A transfer. In the contest of A vs. C, who wins? C (B was a BFP)
30
chain of title - wild deeds
recorded deed that is NOT connected to the chain of title; not recorded = still inquiry notice if a deed, entered on the records, has a grantor unconnected to the chain of title, the deed is wild and is incapable of giving record notice of its existence
31
chain of title - estoppel by deed
one who conveys realty in which he has NO INTEREST is estopped from denying the validity of that conveyance if he subsequently acquires the title that he had previously purported to transfer shoots back in time to protect first BFP
32
chain of title - deeds recorded late
deed recorded after the grantor parts with title through subsequent deed is NOT constructive notice in most states
33
who is the mortgagor
borrower
34
who is the mortgagee
lender
35
2 documents involved in mortgage
1. promissory note (mortgagor's personal obligation) 2. mortgage (agreement that says if the mortgagor quits paying, the land can be sold to pay the mortgagee)
36
purchase-money mortgage
extension of value by a lender who takes as collateral a security interest in the very real estate that the loan enables the debtor to acquire
37
creation of purchase-money mortgage
2 union elements: debt & voluntary transfer of debtor's land to satisfy debt - WRITING (legal mortgage)
38
transfer of interests by mortgagee
indorse note & deliver to transferee; or execute separate document of assignment
39
transfer of interests by mortgagor****
buyer either assumes the mortgage or takes the property subject to the mortgage if assume - grantee agrees to be responsible for mortgage note --> original mortgagor secondarily liable (mortgagee can sue either one or both at the same time under joint liability) subject to - not agreeing to be responsible for note; mortgagee's only recourse its foreclosure --> original mortgagor primarily liable, nothing re grantee
40
If O (mortgagor) sells Blackacre, which is now mortgaged, what happens to the mortgage?
if it is recorded, IT REMAINS ON THE LAND grantee will not be personally liable unless they assume it; mortgage remains on the land b/c recording statutes protect mortgages
41
deed in lieu of foreclosure
permits mortgagee to take immediate possession without a foreclosure sale
42
Are junior mortgagees required to be named in foreclosure actions?
YES; jr mortgagees have the right to pay off the sr mortgagee in order to avoid being wiped out by foreclosure
43
What if the proceeds from the sale of Blackacre are less than the amount owed? What happens if there is a surplus?
mortgagee brings deficiency action against mortgagor; jr liens are paid off in order of priority, then remainder to debtor
44
Each claimant is entitled to satisfaction _________________ before a junior lien holder may take.
IN FULL
45
necessary parties to foreclosure action
jr lienholders, debtor if a necessary party is NOT jointed, their mortgage will remain on the land
46
senior interests (mortgages)
foreclosure DOES NOT affect any interest senior to the mortgage being foreclosed; the buyer at the sale takes subject to such interest, but is not personally liable for it if the senior mortgage is not paid sooner or later, the senior creditor will foreclose against the land
47
priorities of creditors
creditors MUST record or they will have no priority; determined by first-in-time, first-in-right
48
subordination agreements
by private agreement, sr creditor may agree to subordinate its priority to a jr creditor; this is allowed
49
redemption in equity
universally recognized up until the date of foreclosure sale; at any time prior, the debtor has the right to redeem the land by freeing it of the mortgage debtor cannot waive the right to redeem the mortgage itself
50
statutory right of redemption
statute gives debtor right to redeem for a fixed period after the foreclosure sale; amount to be paid is usually the foreclosure price, rather than the amount of the original debt
51
zoning (generally)
government may reasonably control land use for the protection of the health, safety, morals, and welfare of its citizens limited by DPC and EPC of 14A
52
zoning variance
grants the landowner permission to depart from the literal restrictions of a zoning ordinance landowner must show: undue hardship, no diminution in neighboring property values
53
when will a variance not be granted?
hardship has been created by the applicant themselves
54
nonconforming use
cannot eliminate a once-lawful use altogether; insubstantial changes are permitted
55
cumulative zoning
creates a hierarchy of uses of land, where a single-family home is the highest use, followed by a two family home, then an apartment building, and then a strip mall, then a factory land that is zoned for a particular use may be used FOR THE STATED PURPOSE higher use is allowed in lesser ranked districts
56
noncumulative zoning
land may be used ONLY FOR THE PURPOSE IN WHICH IT IS ZONED; no trading up or down
57
special use permits
must be obtained even though zoning is proper for intended use; checklist often required for hospitals, funeral homes, drive-in businesses must comply with safety requirements even though it is allowed
58
condominium ownership
treated as fee ownership
59
HOAs
oversees all common elements and enforces governing rules
60
HOA rules
declaration of covenants, conditions, and restrictions (CC&R) that prescribe what owners can and cannot do with their property; enforced by board with oversight from HOA
61
condo fees
dues to HOA, used for maintaining common elements if fees cannot cover a necessary repair, 1 time fee is assessed against all condo owners
62
cooperatives
title to land and building is held by a corporation that leases individual apartments to its shareholders; direct restraint on alienation of an individual interest is valid
63
lateral support of land
right to have land supported in its natural state; landowner is strictly liable if their excavation causes adjacent land to subside if land is improved by buildings and an adjacent landowner excavates causing improved land to cave in, the excavator will be liable ONLY IF they were negligent strict liability will apply to the excavator's actions if plaintiff shows that, b/c of the excavator's actions, the plaintiff's improved land would have collapsed EVEN IN ITS NATURAL STATE
64
subjacent support of land
underground occupant of land must support the surface and buildings existing on the date the subjacent land was created; liability requires negligence
65
water rights - watercourses (streams, rivers, lakes)
riparian doctrine - water belongs to those who own the land bordering the watercourse prior appropriation doctrine - water initially belongs to the state, but the right to divert it and use it can be acquired by an individual through their actual use, regardless of whether or not they happen to be a riparian owner (can be lost by abandonment)
66
types of riparian doctrines
natural flow theory - use is enjoinable if it results in substantial/material diminution of the water's quantity, quality, or velocity reasonable use theory - an owner's use is not enjoinable unless it substantially interferes with other riparian owners (alteration of flow, purpose of use, pollution, extent of use, destination of water taken, misc conduct that may give rise to litigation) natural vs. artificial use - natural uses (human uses - gardening, consumption) prevail over artificial uses (irrigation, manufacturing)
67
groundwater (percolating water)
absolute ownership doctrine - owner of overlying land can take all the water they wish, for any purpose, including export (reasonable use is default) reasonable use - exporting is allowed only if it does not harm other owners who have rights in the same aquifer correlative rights - owners of overlying land own the underground water basin as joint tenants, each is allowed a reasonable amount of his own use appropriative rights - priority of use is determinative restatement - owner may pump groundwater UNLESS unreasonably harms neighboring landowners, exceeds the pumper's reasonable share, or directly/substantially affects surface waters and unreasonably harms surface water users
68
surface waters
general: landowner can use surface water within their boundaries for any purpose they desire natural flow theory - cannot alter natural drainage patterns common enemy (default) - an owner can Taake any protective measures to get rid of water or combat its flow reasonable use - balance utility of use against gravity of harm
69
right in airspace
right to airspace above a parcel is not absolute, owner is entitled to freedom from excessive noise
70
right to exclude - remedies for possessor
1. trespass - ejectment 2. private nuisance - injunction 3. continuing trespass - ejectment 4. ejectment or unlawful detainer to remove trespasser/tenant; pair with money damages

Real Property/Future Interests (2 decks)

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