Property

Question 1

Class Gifts

Answer 1

Remainders in a class are

(1) contingent if no member of the class yet exists;
(2) vested if all possible members exist; and
(3) vested subject to open if more members might come to exist

Question 2

Rule Against Perpetuities

Answer 2

Any future interest that is not certain to vest or fail within a life in being plus 21 years is void

Question 3

Negative Easement

Answer 3

Right to prevent something on another’s land. (remember “LASS” - light, air, support, stream water from artificial flow)

Must be expressly created. No natural/automatic right.

Question 4

Easement Appurtenant

Answer 4

Involves two tracts of land

1) Dominant parcel has the benefit, which runs to grantees
2) Servient parcel has the burden, which runs to grantees with notice

Question 5

Joint Tenancy

Answer 5

Unities required: (i) time (interests vested at same time), (ii) title (interests acquired by the same instrument), (iii) interest (interests of the same type and duration), and (iv) possession (interests give identical rights to enjoyment). If these unities aren’t present, joint tenancy cannot be created. It also requires words such as “as joint tenants with right of survivorship” to show necessary intent. Without specific words, a tenancy in common will be presumed. Testamentary disposition by one joint tenant will not sever a joint tenancy

Question 6

Lien Theory of Mortgages

Answer 6

(Majority Rule) Whether a mortgage creates a severance of joint tenancy or not depends on whether the state follows the lien theory or the title theory of mortgages.
Lien theory means no severance; title theory means severance.

Question 7

Paramount Title Holder

Answer 7

The original title or ownership superior or stronger than the one with which it is compared to

Question 8

Implied Warranty of Habitability

Answer 8

For residential tenancies, the landlord covenants that the premises are suitable for human residence. Things that breach this implied warranty:

• no running water
• no plumbing
• no heat in winter

Question 9

Implied Warranty of Habitability

Answer 9

For residential tenancies (not commercial), the landlord covenants that the premises are suitable for human residence.

Examples of breach: no running water, no plumbing, no heat in winter, etc.

If landlord breaches, tenant may: (i) terminate lease, (ii) make repairs and offset their cost against future rent, (iii) abate rent to an amount equal to the fair rental value in view of the defects, or (iv) remain in possession, pay full rent, & seek damages. (remember “MR3” - move, repair, reduce, remain)

Tenant cannot waive this warranty! It’s against public policy. So even if tenant accepts premises “as is” or covenants to repair, landlord’s obligations under implied warranty of habitability are usually held to be non-waivable.

Question 10

Covenant of Quiet Enjoyment

Answer 10

Future covenant. Every lease includes this implied covenant by landlord that neither she nor someone with paramount title will interfere with tenant’s quiet enjoyment and possession of the leased premises.

Covenant may be breached by: total actual eviction, partial actual eviction, or constructive eviction from the leased premises by a third party with paramount title (title or ownership of the estate conveyed that is superior to the grantor’s title).

Question 11

Constructive Eviction

Answer 11

Occurs when landlord’s breach renders the premises unsuitable for occupancy. To establish a claim, tenant must prove (1) landlord breached duty to tenant; (2) the breach substantially & materially deprived tenant of use & enjoyment of premises; (3) tenant gave landlord notice & reasonable time to repair; and (4) after reasonable time, tenant vacated premises. (remember “SING”)

Tenant cannot claim constructive eviction unless: (i) the injurious acts were caused by landlord, (ii) premises are uninhabitable, and (iii) tenant vacates premises within a reasonable time.

Tenant who’s been constructively evicted may terminate lease and sue for damages. Because tenant can’t claim constructive eviction unless and until she vacates, remedies do not include remaining in possession of premises and refusing to pay rent until interference ceases or continuing to pay rent and suing for damages.

Examples of landlord breach: flooding, absence of heat in winter, loss of elevator service in warehouse, etc.

Question 12

Partial Eviction

Answer 12

Occurs when tenant is physically excluded from part of the leased premises.
Partial eviction by landlord relieves tenant of obligation to pay rent for entire premises, even though tenant is in possession of the remainder.
Partial eviction by third party with paramount title results in an apportionment of rent (tenant is liable for the reasonable rental value of the portion she continues to possess.

Question 13

Actual Eviction

Answer 13

Occurs when landlord, a paramount title holder, or holdover tenant excludes tenant from entire leased premises. Actual eviction terminates tenant’s obligation to pay rent.

Question 14

Latent Defects

Answer 14

If, at the time the lease is entered into, landlord knows of a dangerous condition that tenant couldn’t discover upon reasonable inspection (latent defect), landlord has a duty to disclose the dangerous condition.

Failure to disclose latent defects results in liability for any injury resulting from the condition.

Question 15

Voluntary (affirmative) Waste

Answer 15

Actual, overt conduct that causes a drop in land value

Question 16

Permissive Waste (neglect)

Answer 16

Occurs when land is allowed to fall into disrepair or life tenant fails to reasonably protect the land.

Life tenant is required to pay all taxes on land.

Question 17

Ameliorative Waste

Answer 17

Life tenant must not engage in acts that enhance the property value, unless all future interest holders are known and consent. This is to protect sentimental value.

Question 18

Benefit of Covenant to Run

Answer 18

Remember “WITV” (benefit is shorter than burden)
Writing, Intent, Touch and concern, Vertical Privity.
It’s easier for a benefit to run than a burden.

Question 19

Burden of Covenant to Run

Answer 19

Remember “WITHN”
Writing - original promise between A & B in writing
Intent - original parties intended covenant run with land
Touch and concern the land
Horizontal and vertical privity
Notice - A1 must have had notice of the promise when she took

Question 20

Equitable Servitudes

Answer 20

An agreement between parties that restricts the right of use or enjoyment of one or more parcels of property that can be enforced through equity (specific performance injunction, NOT money damages).

Created by written covenants that satisfy the Statute of Frauds. In absence of a writing, reciprocal negative servitudes may be implied if:
(1) there’s a common scheme for development (a plan existing at the time sales of the subdivision parcels began that all parcels be developed within terms of the negative covenant); and (2) grantee had actual, record, or inquiry notice of the covenant.

Remember “WITNES” - writing, intent, touch & concern, notice, equitable servitude. No privity is required to bind successors.

Question 21

Doctrine of Part Performance

Answer 21

if you have 2/3 of the following, an oral contract for the sale of land will be enforced.

• buyer took possession
• buyer paid full or substantial price
• buyer made substantial improvements to the land

Question 22

Present Covenants

Answer 22

Covenant of seisin, covenant of the right to convey, and the covenant against encumbrances

Question 23

Covenant of Seisin

Answer 23

Present covenant. Grantor promises she owns the land being conveyed

Question 24

Covenant of the Right to Convey

Answer 24

Present covenant. Grantor promises she has the right to transfer the land. This covenant is breached if the grantor lacks title/ownership of the estate conveyed, at the time of the grant.

Question 25

Covenant Against Encumbrances

Answer 25

Present covenant. Grantor promises there are no servitudes or liens on the property.

Question 26

Covenant of Warranty

Answer 26

Future covenant. Grantor promises to defend grantee should there be any superior claims of title asserted by others.

Question 27

Covenant for Further Assurances

Answer 27

Future covenant. Grantor promises to do what’s needed to perfect grantee’s title if it later turns out to be imperfect

Question 28

Special Warranty Deed

Answer 28

Contains same covenants as the general warranty deed, but grantor only makes those promises on behalf of herself, not her predecessors in interest.

Question 29

General Warranty Deed

Answer 29

Warrants against all defects in title, including those attributable to grantor’s predecessors in interest. It includes 6 covenants. (3 present and 3 future)

Question 30

Notice Statute

Answer 30

If at the time B takes, he is a BFP, he wins because the last BFP wins. It doesn’t matter who records first (A or B) or if B never records. Later BFP wins if earlier grant was not recorded.

Requires only that the subsequent purchaser have no actual or constructive (i.e., record or inquiry) notice at the time of the conveyance.

“A conveyance shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.”

Question 31

Race-Notice Statute

Answer 31

For B to prevail over A, B must be a BFP and win the race to record. Later BFP wins only if she records before the earlier grantee records.

“A conveyance shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.”

Question 32

Shelter Rule

Answer 32

One who takes from a BFP will prevail against any entity that the transferor-BFP would’ve prevailed against. So the transferee “takes shelter” in the status on her transferor and steps into the shoes of the BFP even though she otherwise fails to meet the requirements of BFP status.

Question 33

Right of Equitable Redemption

Answer 33

Right of a debtor to redeem the land by freeing it of the mortgage (paying it off) at any time up to the date of the foreclosure sale.

Question 34

Acceleration Clause

Answer 34

Permits mortgagee to declare the full balance due in the event of default.

Question 35

Zoning Variance

Answer 35

Grants a landowner permission to depart from a zoning stricture if the proponent proves (1) undue hardship; and (2) that the variance won’t decrease surrounding property values

Question 36

Cumulative Zoning

Answer 36

Creates a hierarchy where land zoned for a particular use may be used for that particular use and any higher use. The hierarchy is single-family homes, duplexes, apartments, strip malls, then factories. (from highest to lowest)

Question 37

Easement is “surcharged”

Answer 37

The easement’s legal scope was exceeded.

Question 38

Covenant of Marketable Title

Answer 38

When a seller of land breaches the implied covenant of marketable title, the closing date may be extended to allow the seller time to cure.

Question 39

Race Statute

Answer 39

First to record wins; actual notice is irrelevant.

“No conveyances of an interest in land is valid against any subsequent purchaser whose conveyance is first recorded.”

Question 40

Adverse Possession

Answer 40

Actual - actually be on land
Exclusive - not sharing with true owner or public
Open & notorious - sufficient to put true owner on notice
Continuous - possession that average owner would make of the property under the circumstances for the statutory period
Hostile - without owner’s permission

Question 41

Valid Deed Requirements

Answer 41

to be valid, a deed must be (1) in writing, (2) sufficiently describe the land to be conveyed, (3) name the grantee and grantor, (4) evidence an intention to convey the land, and (5) be signed by the grantor.

If the grantees name is left blank, some courts will presume the person taking delivery has authority to fill in the name of grantee.

Question 42

Record Notice

Answer 42

Notice that the law imputes to the purchaser if a prior deed was properly recorded in the grantee’s chain of title.

Question 43

Inquiry Notice

Answer 43

What the purchaser would’ve discovered by inquiring into the property, or what a reasonable inspection would’ve revealed.

Question 44

Statutory Redemption

Answer 44

The right of a mortgagor to recover the land after the foreclosure sale has occurred (for a statutory period, usually 6 months), usually by paying the foreclosure sale price. This right extends to mortgagors and, in some states, to junior lienors.

Question 45

Licensee

Answer 45

One who enters land with landowner’s permission, for her own purpose or business rather than for the landowner’s benefit. Social guests are licensees.

Landowners owe licensees a duty to warn or make safe known dangerous conditions that create unreasonable harm to licensee that the licensee is unlikely to discover.

Landowners are only required to take reasonable care to protect licensees from any known hazards on the property, and have no duty to inspect as they do with invitees.

Question 46

invitee

Answer 46

One who enters the land of another for the purpose of business dealings with the landowner.

Landowners owe duty to reasonably inspect for and warn of hidden hazardous conditions.

Question 47

Equitable Conversion

Answer 47

Once a contract is signed and each party is entitled to specific performance, equity regards the purchaser as the owner of the real property and the seller’s right to the sale proceeds as personal property.

Question 48

Profit

Answer 48

A non-possessory interest in land that allows the profit-holder to enter onto the servant tenement to remove soil, minerals, substance, etc. on the land. Can be appurtenant or in gross.

If it benefits a dominant estate, it’s appurtenant, and you can’t independently transfer the profit from the dominant estate.

Profits in gross can be transferred independent of the transfer of land. The profit doesn’t exist to serve a dominant estate.

Question 49

License

Answer 49

Allows holder to enter the land of another. It is revocable at any time.

Question 50

Fixtures

Answer 50

Residential: look at nature of chattel, the intent when it was attached, and how much damage will be caused to the property if it is removed.

Commercial: commercial tenants are allowed to remove all trade fixtures prior to the lease expiring, except structural additions to the property, like a deck.

Question 51

Mortgage Assumption

Answer 51

When a buyer agrees to assume a mortgage, the buyer is liable for the mortgage, and the original mortgagor (seller) is liable as well.

Taking “subject to” a mortgage is not an assumption.

Question 52

Tenancy in Common

Answer 52

Without specific words of survivorship, a tenancy in common will be presumed.

Question 53

Real Covenant

Answer 53

Promise/contract that relates to the ownership or usage of land. Since it is contractual, it’s enforceable through money damages, not specific performance like an equitable servitude is.

Question 54

Equitable Mortgage

Answer 54

If a deed is given for security purposes rather than as an outright transfer of property, it will be treated as an “equitable” mortgage and creditor must foreclose it by judicial action like any other mortgage.

In determining whether a deed is a mortgage, the court considers the following factors: (1) existence of debt or promise of payment by deed’s grantor; (2) grantee’s promise to return the land if debt is paid; (3) the fact that the amount advanced to grantor/debtor was much lower than the property value; (4) the degree of grantor’s financial distress; and (5) parties’ prior negotiations,