Property

Question 1

Does one JT’s execution of a mortgage bind the other JT (who did not sign) upon the signer’s death?

Answer 1

Under the (majority) lien theory, a mortgage does not trigger a severance -> thus, the surviving JT who did not sign the mortgage receives full title free and clear of the mortgage.

Under the (minority) title theory, a mortgage creates a severance of the JT, creating a TIC. Thus the surviving partner would keep one-half, free of the mortgage they did not sign, and the heirs of the JT who signed the mortgage would inherit one-half, subject to the mortgage .

Question 2

What are T’s obligations when they are partially evicted?

Answer 2

Even though the tenant continues in possession of the remainder of the premises, partial eviction by the LL relieves the tenant of the obligation to pay rent for the entire premises.

In contrast, partial eviction by a paramount title holder results in an apportionment of rent; i.e., it relieves the tenant of the obligation to pay rent NOT for the entire premises, but only for the portion of the premises from which he was evicted. The tenant remains liable for the reasonable rental value of the portion that he continues to possess.

Question 3

Does the covenant of quiet enjoyment apply to conduct of a third-party?

Answer 3

No. It only applies where the LL’s conduct has rendered the property uninhabitable

Question 4

If the buyer of land determines that the seller’s title is unmarketable, what can the buyer do?

Answer 4

The buyer must notify the seller and give her reasonable time to cure, even if this requires extending the closing date, and even if time is of the essence. If the seller fails to cure the defects, then the buyer may rescind the contract, sue for damages for breach, get specific performance with abatement of the purchase price, or (in some jurisdictions) require the seller to quiet title

Question 5

Does an easement render title unmarketable?

Answer 5

Easements are generally considered encumbrances that render title unmarketable. BUT, a beneficial easement that was visible or known to the buyer does not constitute an encumbrance

Question 6

Does a de minimus zoning violation render title unmarketable?

Answer 6

Yes, unless the title holder is able to get the zoning authority to grant a permanent variance

Question 7

If a property is possessed by a life estate, with a remainder held in another party, will an adverse possessor obtain title to the land?

Answer 7

No. The adverse possessor will get possession of the life estate, but will be ejected by the remainder holder once the former life estate holder dies.

Question 8

What is color of title?

Answer 8

Color of title is a document that purports to give title, but for reasons not apparent from its face does not

Question 9

When does the true owner’s disability (infancy, insanity, imprisonment) toll the statute of limitations on an adverse possession claim?

Answer 9

For a disability, such as status as a minor, to stop the clock, the disability must have been in existence on the day the adverse possession began

Question 10

If a party assumes a mortgage from the original mortgagor, who can the mortgagee go after should there be a default?

Answer 10

When a grantee assumes the mortgage, the grantee expressly promises the grantor-mortgagor that he will pay the mortgage obligation as it becomes due. The mortgagee then becomes a third-party beneficiary of the grantee’s promise to pay and can sue the grantee directly if the grantee fails to pay. After the assumption, the grantor-mortgagor becomes a surety who is secondarily liable to the mortgagee on the note if the grantee fails to pay. The grantee and the original mortgagor are jointly liable, even though the grantee is primarily liable and the original mortgagor is secondarily liable as a surety

Question 11

If a mortgagee and an assuming grantee subsequently modify the original obligation, can the original mortgagor be held liable for any part of the original obligation?

Answer 11

No. When a mortgagee and an assuming grantee subsequently modify the original obligation, the original mortgagor is completely discharged of liability

Question 12

What happens when a grantor purports to convey property that he does not own, but subsequently acquires title?

Answer 12

When a grantor purports to convey property that he does not own, his subsequent acquisition of title to that property vests in the grantee under the doctrine of estoppel by deed. Most courts, however, hold that this is personal estoppel, which means that title inures to the grantee’s benefit only as against the grantor, not a subsequent bona fide purchaser. If the grantor transfers his after-acquired title to an innocent purchaser for value, the bona fide purchaser gets good title

Question 13

What are the six warranties that protect purchasers of property against defects in title?

Answer 13

Present covenants: seisin, right to convey, and freedom from encumbrances

Future covenants: warranty, quiet enjoyment, and future assurances

Question 14

covenant of seisin

Answer 14

in which the grantor covenants that they have title and possession to the estate they are purporting to convey.

Question 15

covenant of right to convey

Answer 15

in which the grantor covenants that they have the authority to make the grant (which is satisfied by their title)

Question 16

covenant against encumbrances

Answer 16

in which the grantor covenants against the existence of any physical (e.g., encroachments) or title (e.g., mortgage) encumbrances.

Question 17

covenant for quiet enjoyment

Answer 17

whereby the grantor covenants that the grantee will not be disturbed in possession by any third party’s lawful claim of title

Question 18

covenant of warranty

Answer 18

where the grantor agrees to defend against any reasonable third party claims of title and to compensate the grantee for any loss they incur from claims of superior title.

Question 19

covenant for further assurances

Answer 19

whereby the grantor promises to perform acts that are reasonably necessary to perfect the conveyed title.

Question 20

What is the implied warranty of habitability?

Answer 20

The implied warranty of habitability is a warranty recognized in Pennsylvania between the builder-vendor of a residence and the (original) purchaser-resident in which the builder-vendor bear the risk that a home which he has built will be functional and habitable.

Question 21

What are the requirements to validly convey a deed?

Answer 21

The only requirements that must be met for a conveyance of land to be valid (and thereby transfer legal title in that land from one party to another) are execution and delivery of the deed. The execution requirement is satisfied as long as the deed is signed by the party to be charged (the seller or transferor). Delivery of a deed is established by a proven intent to pass title, even if the title document was never physically given to the grantee. The grantee’s acceptance of the deed will be presumed (by the deed’s recording), unless the grantee explicitly rejects it.

Question 22

What must a valid deed contain?

Answer 22

A valid deed must satisfy the Statute of Frauds and include all the necessary terms: the identity of the grantor and grantee, words of transfer, a description of the property interest being transferred, and the grantor’s signature.

Question 23

If a party is granted a life estate on a property that is mortgaged, is the life estate holder responsible for the mortgage payments?

Answer 23

whenever the life estate and future interest are split, the law has evolved to require the life estate holder to pay interest on a mortgage (otherwise the life estate holder is committing permissive waste) and to require the remaindermen to pay the principal due on the mortgage

Question 24

What constitutes permissive waste?

Answer 24

Permissive waste is a failure to perform obligations related to the land to keep the property in good repair or maintain its value. A failure to make repairs to buildings on the property, failure to pay taxes on the property as they come due, or failure to pay the interest on the mortgage on the property all constitute permissive waste

Question 25

What is an easement by necessity?

Answer 25

An easement by necessity is created when the owner of a tract of land sells a part of the tract and by this division deprives one lot of access to a public road or utility line. When this happens, a right-of-way absolute necessity is created by implied grant over the lot with access to the public road or utility line.

Question 26

If a person was granted title as a gift, rather than through a sale, can they claim to be a bona fide purchaser of value for the purposes of a recording statute?

Answer 26

No - the common law “first in time, first in right” rule applies

Question 27

Can a seller deliver marketable title if they acquired the property through adverse possession?

Answer 27

Only if they have obtained a judicial determination that they have acquired title to the land.

Question 28

When will courts uphold a liquidated damages clause in a real estate contract?

Answer 28

Yes, if they are a good-faith attempt by both parties to reasonably approximate a fair amount for compensation to the non-breaching party. Courts have upheld the retention of a deposit of up to 10% of the sale price. A liquidated damages clause will not be upheld if it is deemed to be a penalty or unconscionable.

Question 29

How does a court determine whether something is a fixture?

Answer 29

A fixture is a chattel that has been so affixed to land that it has ceased being personal property and has become part of the realty. Fixtures are typically a permanent part of realty such that damage would occur if they were removed. A court will consider the degree to which the item is attached, whether there will be damage to the structure if the item is removed, and whether general custom dictates that such an item stays with a property or goes out with the seller.

Question 30

When is an equitable servitude enforceable against subsequent grantees?

Answer 30

An equitable servitude in a deed is only enforceable where a party can establish (i) intent that the restriction be enforceable by subsequent grantees; (ii) that the subsequent grantee had notice of the servitude; and (iii) that the restriction touches and concerns the land. Privity, notably, is not required.

Question 31

What is the standard for restrictions imposed by a common-interest development’s declaration?

Answer 31

Restrictions in the declaration (i.e., the recorded document that imposes the covenants and easements creating a common-interest ownership community) are valid unless illegal, unconstitutional, or against public policy.

Question 32

What is the standard for regulation imposed by a common-interest development’s HOA, but not in their declaration?

Answer 32

Reasonableness

Question 33

Can you put a direct restraint on alienation of a fee simple?

Answer 33

Direct restraints on alienation of a fee simple are void. E.g., “Blackacre to A, but if A tries to sell Blackacre, to B” is void and instead is read as “Blackacre to A”

Question 34

When is a partition appropriate?

Answer 34

When the parties cannot agree on the appropriate use of the land

Question 35

When can the landlord raise the rent on a holdover tenant?

Answer 35

When they announce their intention to raise the rent before the original lease expires

Question 36

When can restrictive covenants on subdivision lots be voided under the doctrine of changed neighborhood conditions?

Answer 36

Restrictive covenants on all lots in a subdivision such as this can be voided if changed conditions have made the property unusable for the specified use, and this means that the entire subdivision must have changed so significantly that enforcement of the restriction would be inequitable. If some houses in the center of the subdivision are not affected by the pollution, then none of the restrictions can be voided; if all lots are affected, then all restrictions are voided

Question 37

When is a landowner liable for damage to adjacent buildings due to the landowner’s excavations?

Answer 37

A landowner has a right to have his land supported in its natural state by adjoining land. If, however, the land has buildings on it, an excavating adjacent landowner is strictly liable for damage to the buildings caused by the excavation only if the excavation would have caused the land to subside even in its natural state (i.e., without buildings). Even if the land would not have subsided in its natural state, the excavating landowner is liable for the damages if she was negligent.

Question 38

Are absolute restraints on fee simple estates allowed?

Answer 38

No, all absolute restraints on fee simple estates are void. Partial restraints (limited in time, people and purposes) may be upheld.

Question 39

What are the four unities for a joint tenancy?

Answer 39

Time, Title, Interest and Possession

Question 40

What happens when a buyer realizes that the property is unmarketable prior to closing?

Answer 40

If the buyer determines, prior to closing, that the seller’s title is unmarketable, he must notify the seller and allow a reasonable time to cure the defect. If the seller is unable to acquire title before closing, so that title remains unmarketable, the buyer can rescind, sue for damages caused by the breach, or obtain specific performance with an abatement of the purchase price. However, the buyer cannot rescind prior to closing on grounds that the seller’s title is unmarketable.

Question 41

When does a purchase money mortgage have priority over other claims?

Answer 41

A PMM, whether recorded or not, has priority over mortgages, liens, and other claims against the mortgagor that arise prior to the mortgagor’s acquisition of title. However, PMM priority is subject to being defeated by subsequent mortgages or liens by operation of the recording acts