Property Flashcards
May a cotenant recovery from another cotenant in contribution for operating expenses?
yes. e.g., mortgage expenses and property taxes
Describe the effect of an assignment and sublease on privity of contract and privity of estate between a LL, T, and Assignee.
The privity of estate held by the original tenant terminates upon a successful assignment by the tenant to the assignee (but does not terminate upon a sublease). Because the original tenant remains in privity of contract with the landlord (both are parties to the lease agreement), however, the original tenant remains liable for all the covenants in the lease—even after a successful assignment. Absent an agreement by the landlord to release the original tenant from liability (i.e., a novation), the original tenant remains liable to the landlord for the entire duration of the lease.
Describe the warranty of habitability
There is an implied warranty of habitability in most residential leases, particularly when the dwelling is a multi-family unit. The landlord must maintain the property such that it is reasonably suited for residential use. A failure to provide adequate heat can constitute a breach of this warranty and, if not addressed, can provide the tenant with a remedy, such as a rent abatement, until the breach is corrected
Does a land sale contract include an implied covenant of marketable title?
Absent contrary language, every land sales contract contains an implied covenant of marketable title. Unless otherwise agreed, the seller is not required to deliver marketable title until the closing. In an installment land contract, marketable title is not required to be given until delivery occurs after all installment payments have been made. An undisclosed private encumbrance (such as a mortgage) renders title unmarketable. If a seller delivers an unmarketable title, a buyer may rescind the contract and recover payments, sue for breach of contract, or bring an action for specific performance with an abatement of the purchase price (e.g., price adjustment to compensate the buyer for the defect). In this case, the seller delivered unmarketable title and the buyer is entitled to seek any of these remedies Absent contrary language, an implied covenant of marketable title (i.e., a title free from defects) is part of a land sales contract, regardless of the type of deed created. Marketable title is a title that is free from an unreasonable risk of litigation. Here, the seller has breached this covenant because the seller’s title acquired by adverse possession is subject to a reasonable risk of litigation (he is not the owner of record).
The owner in fee simple of an undeveloped lot in the city promised to leave the property to her nephew upon her death. The nephew, shortly before his aunt’s death, purported to convey the lot by a general warranty deed to his son as a gift. This transfer was not recorded. Despite the aunt’s promise, the lot passed to a charity upon her death pursuant to provisions in her will. The following month, the son sold the lot to a developer but was shortly thereafter killed in an accident. When the charity’s attorneys learned of the developer’s plan to construct a building on the lot, they sued to block the construction by alleging the charity owned the lot. Which of the following breach of warranty actions can the developer successfully pursue against the nephew as a consequence of the charity’s suit?
Answer choice B is correct. The warranty of quiet enjoyment is a future covenant that is breached only upon interference with possession. It runs to successive grantees, such as the developer, as well as to the original grantee. Since the charity action interferes with the developer’s possession of the lot, this warranty has been breached, and the developer may assert that breach against the nephew. Answer choice A is incorrect because the warranty against encumbrances is a present covenant that is breached by the existence of an encumbrance, such as an easement, at the time of conveyance of the property by the grantor. The charity’s lawful ownership of the lot does not constitute an encumbrance, and in most states, a subsequent grantee (here, the developer) cannot sue the original grantor (here, the nephew) for breach of a present covenant. Answer choice C is incorrect because although the nephew did breach the warranty of the right to convey, this warranty is a present covenant. In most states, a subsequent grantee cannot sue the original grantor for breach of a present covenant. Answer choice D is incorrect because although the nephew did breach the warranty of seisin, the developer would not be able to sue the nephew for breach of a present covenant in most states.
Describe the Covenant of Warranty
The covenant of warranty is a future covenant that guarantees that the grantor will defend against a third party’s lawful (i.e., valid) claim for title. This covenant, however, does not require the grantor to defend against a third party’s wrongful claim. In essence, this covenant does not require the grantor to defend against all title claims brought by a third party against the grantee, but to be responsible for the litigation costs if the third party’s claim is successful. Here, because the buyer was successful in defending against the third party’s claim, the grantor was not required to defend the buyer against this action.
What are the duties of the mortgagee in possession of property?
A mortgagee in possession assumes a duty to take reasonable care of the property, and she incurs liability as if she were the owner. Consequently, the bank is liable to the business invitee for injuries the invitee suffered on the farm.
Effect of failing to have an acceleration clause in a note?
Although a mortgagee may bring a foreclosure action whenever a mortgage obligation is in default, the mortgagee is only entitled to collect the amount of the obligation that is currently due and owing unless the mortgage contains an acceleration clause.
Implied Easements
A quasi-easement existed when the original owner owned both apartments in the duplex, because his use of Unit A to access Unit B was continuous, apparent, and reasonably necessary to the use and enjoyment of Unit B. The scope of the easement is determined by prior use, and became an implied easement when the units were sold. As the holder of an implied easement, the owner of Unit B had the right to access his roof through Unit A. For this reason, answer choice B is incorrect. Answer choice A is incorrect because the warranty deed does not need to mention the roof access because the owner of Unit B has an implied easement to access his roof through Unit A. Answer choice D is incorrect. Under common law, an easement by estoppel is created through good-faith, reasonable, detrimental reliance on permission by a servient estate holder. Here, however, no permission was given by the owner of Unit A.
A couple leased a residence for one year beginning on January 1. The rent for the term was $30,000, payable in advance in monthly increments of $2,500 on the first of each month. On August 1, the couple notified the landlord that they were leaving at the end of the month. They moved out on August 31, leaving the residence vacant. When the couple left, they had not paid the rent for the months of July and August. The landlord took no action regarding the residence, but instead simply allowed it to remain vacant. Had the landlord made a reasonable effort to rent the residence, the residence could have been rented for $2,000 per month for the remaining term of the couple’s lease. The jurisdiction has adopted a mitigation rule regarding abandoned leased premises. In January of the following year, the landlord sued the couple for damages under the lease.
How much should the landlord receive in damages?
Answer choice B is correct.
The couple’s lease created a tenancy for years with a term of one year. A tenancy for years terminates automatically at the end of the term. A party is not required to give the other party notice of the termination of the tenancy, and notice by the tenants that they are leaving the premises early does not terminate the tenancy. However, in jurisdictions that recognize the mitigation rule regarding a tenant’s abandonment of the leased premises, a landlord, upon learning of a tenant’s abandonment of the premises, has a duty to mitigate damages by making a reasonable attempt to rent the premises, and failure to do so will reduce the landlord’s recoverable damages by the amount the landlord could have mitigated the damages.
Here, had the landlord made such an attempt, he would have received $8,000 ($2,000 per month for four months) instead of the $10,000 that he would have received from the couple ($2,500 per month for four months). Consequently, the landlord is entitled to only $2,000 in damages for the final four months of the lease term. When that amount is added to the unpaid rent of $5,000 for the months of July and August ($2,500 per month for two months), the landlord is entitled to damages of $7,000. Answer choice A is incorrect because this amount fails to consider the landlord’s duty to mitigate damages by renting the residence at $2,000 per month for the last four months of the year. Answer choice C is incorrect because it fails to recognize the damages to which the landlord is entitled for the last four months of the lease term. Answer choice D is incorrect because it fails to include the rent owed for July and August.
A farmer owned a 10-acre farm. Six months before his death, the farmer ceased farming the land, but continued to live in his residence on the land with his friend and maintain the two acres of his property that surrounded the residence. After the farmer died, the farmer’s friend continued to live in the residence and maintain the two acres. The friend believed that she was the owner of the farm pursuant to the terms of the farmer’s will, prepared shortly before his death, which specifically devised the farm to her. Unbeknownst to the farmer’s friend, the farmer, several years before his death, had deeded ownership of the farm to his son, which the son did not record. The son became estranged from his father shortly thereafter and did not learn of his father’s death for 11 years. Recently, the son brought an ejectment action against the farmer’s friend. The statute of limitations for adverse possession in the applicable jurisdiction is 10 years. In addition, the applicable jurisdiction has adopted a notice-type recording act. Is the farmer’s friend likely to be awarded the entire 10-acre farm?
Correct Answer: Yes, because the farmer’s friend took possession of the farm under color of title.
Answer choice B is correct.
Under the doctrine of adverse possession, ownership of real property is transferred to a person who exercises open, notorious, hostile, and exclusive physical possession of that property for a certain amount of time. If a person enters property under color of title (a facially valid will or deed) and actually possesses only a portion of the property, then constructive adverse possession can give title to the whole.
Here, several years before his death, the farmer transferred ownership of the farm to his son. Consequently, the farmer’s provision in his will that devised the farm to the farmer’s friend was not effective. However, for 11 years after the farmer’s death, the farmer’s friend occupied the residence on the farm and maintained the two acres surrounding it. Because the applicable jurisdiction has a 10-year statute of limitations, the farmer’s friend has adversely possessed the residence and the two acres surrounding it. Although the friend did not actually possess the remaining eight acres of the farm, the friend likely constructively adversely possessed the eight acres through color of title as the friend erroneously thought that she owned the entire farm based on the farmer’s will. Answer choice A is incorrect. The son’s failure to record the deed to the farm does not void his father’s transfer of the farm to him. Moreover, although the farmer’s friend did not have notice of the earlier conveyance of the property to the son, the recording act does not give the friend ownership of the farm because the friend was not a bona fide purchaser of the farm and therefore is not protected by the act. Answer choice C is incorrect. Although adverse possession generally requires a person to be in actual possession of the property, a person who enters property under color of title (a facially valid will or deed) and actually possesses only a portion of the property can still gain title to the whole property under the doctrine of constructive adverse possession, provided the other elements of adverse possession have been met. Here, the friend took possession of the farm under the provision of the farmer’s will (i.e., under color of title). Answer choice D is incorrect. Although the farmer did transfer ownership of the farm to his son, the farmer’s friend has adversely possessed the farm for the requisite period.
A landowner granted a construction company the exclusive right to remove sand and gravel from the landowner’s property for twenty years in exchange for a monthly payment of a fixed amount. The agreement was properly recorded. Three years later, the construction company purchased the landowner’s property and built a plant for processing the sand and gravel on the property. Twelve years after purchasing the property, the construction company sold the portion of the land on which the sand and gravel was located to a buyer, while retaining the portion of the land on which the processing plant was located. The contract made no specific mention of the prior recorded agreement, but the construction company had come to rely on the supply of sand and gravel from the property. Although there are other sources for the sand and gravel, sand and gravel are necessary for the projects undertaken by the construction company. The buyer has refused to permit the construction company to continue to remove sand and gravel from the portion of the property purchased by the buyer.
Correct Answer: The profit exists by implication.
Answer choice B is correct.
A profit (also known as a profit à prendre) is a nonpossessory right to enter another’s land and remove specific natural resources (such as oil, gas, minerals, timber, or game). Profits are created and analyzed similarly to easements, except that profits cannot be created by necessity.
Here, although the landowner granted the construction company a profit that was properly recorded, the profit was terminated by merger when the company acquired the property to which the profit was tied. The company’s subsequent sale of the property to the buyer does not revive this profit. Thus, the construction company’s best argument would be that a profit exists by implication based on the prior use of the property. Answer choice A is incorrect. Although the landowner granted the construction company a profit that was recorded, the profit was terminated by merger when the company acquired the property to which the profit was tied. The fact that the profit was recorded does not prevent termination by merger. Answer choice C is incorrect because estoppel is based on the good-faith, reasonable, detrimental reliance of the holder of a profit on the permission of the owner of the land that serves as the source of the profit. Here, although there was reliance by the company on the property as the source of its sand and gravel, this reliance is not in itself sufficient for estoppel. There must also be evidence that the buyer’s actions caused that reliance. Answer choice D is incorrect because profits cannot be created by necessity. Moreover, although the company needs the sand and gravel in its construction business, the profit is not the only source of those items.
A farmer who owned 25 contiguous acres of orchards sold two acres of orchards to a couple in fee simple. Because the couple intended to build a residence on the two acres, they obtained an oral promise from the farmer that he and anyone to whom he transferred his land would cease using pesticides on the adjoining 23 acres of orchards. The farmer made the promise in good faith, intending to sell the remainder of his land to a developer who planned to subdivide the land into residential lots. The couple built a residence on their two acres, but soon sold their two acres to another buyer in fee simple. The couple told the buyer of the farmer’s promise, and the buyer relied on this promise in making her decision to purchase the property as her primary residence. Due to an economic downturn, the developer dropped its plans to acquire the land, and the farmer instead sold the remaining 23 acres of orchards to a neighbor in fee simple. Before the sale, the farmer told the neighbor about his promise to the couple. The neighbor maintained the orchards on his 23 acres for one year without using pesticides, but because the harvest was substantially adversely affected by the lack of pesticides, the neighbor told the buyer that he would again use pesticides on the orchards. Can the buyer now living on the two acres enjoin the neighbor’s use of pesticides on the orchards as a breach of the farmer’s promise?
Correct Answer: No, because the farmer’s promise was not in writing.
Answer choice A is correct.
For a promise restricting the use of land to be enforced in equity against a subsequent transferee of the land, the requirements for an equitable servitude must be satisfied. Among those requirements is that the promise must be in writing.
Here, the farmer’s promise was only an oral promise. Therefore, the buyer who currently resides on the two acres of land cannot enforce the farmer’s promise not to use pesticides on the orchards. Answer choice B is incorrect. Unlike a covenant running with the land, an equitable servitude is enforceable without regard to a privity requirement. In addition, the farmer and the neighbor were in privity because privity exists between a buyer and a seller for the purpose of the enforcement of a covenant when the successor holds an estate of the same duration as the original party. Answer choice C is incorrect because, despite the buyer’s reliance on the farmer’s promise, the promise is not enforceable as an equitable servitude because the promise was not in writing. Answer choice D is incorrect because, while a promise must touch and concern the land to be enforceable as an equitable servitude, this is not the only requirement, and even a promise meeting this requirement must also be in writing to be enforced as an equitable servitude.
Based on a recommendation by the local planning commission, the board of supervisors of a municipality enacted an ordinance that placed a maximum height restriction of two-stories on structures located on any oceanfront property. The ordinance, which was effective upon enactment, contained a provision that exempted existing residences from this new height limitation, but there were only a few existing three-story residences on oceanfront property in the municipality. An individual owned an oceanfront parcel. Prior to the adoption of the ordinance, he employed an architect to draft plans for a three-story residence on his property, the architect had completed the plans, and the homeowner had approved the plans and paid the architect. In addition, prior to the adoption of the zoning ordinance, the homeowner had applied for, but had not yet obtained, a building permit based on the plans. Has the homeowner acquired a vested right to have a three-story residence on his oceanfront property?
Answer choice B is correct.
In order for a property owner who is in the process of building a structure when a zoning ordinance is adopted that prohibits such a structure to convince a court that his right to build the structure has vested, the property owner must have acquired a building permit prior to the date that the zoning ordinance took effect.
Since this property owner was not awarded a building permit at the time that the zoning ordinance took effect, he does not have a vested right in a three-story residence on his oceanfront property. Answer choice A is incorrect because, while the number of existing structures that violate a zoning ordinance may be relevant in determining whether to issue a variance to a property owner, it is irrelevant to the determination of whether the property owner has acquired a vested right to build a structure that violates the zoning ordinance. Answer choice C is incorrect because a property owner’s expenditure of funds that directly relates to the building of a structure is not in and of itself sufficient to create a vested right to do so in the face of a subsequent zoning ordinance that prohibits such a structure. Answer choice D is incorrect because a property owner’s demonstrable intent to build a structure is not in and of itself sufficient to create a vested right to do so in the face of a subsequent zoning ordinance that prohibits such a structure.
