Property Flashcards
Explain the rule regarding assignments in leases
Absent any language to the contrary, a lease can be freely assigned. When a lease prohibits the tenant from assigning the lease, the tenant may nevertheless assign; however, the landlord generally can then terminate the lease for breach of one of its covenants and recover any damages.
When a lease prevents assignment without the permission of the landlord, and the lease is silent as to a standard for exercising that permission, the majority approach imposes a requirement that the landlord may withhold permission only on a reasonable ground in relation to the property being leased and not on a whim or personal prejudice. The traditional rule is that the landlord may withhold permission at his discretion.
Explain the rule regarding surrender?
How is it different than an abandonment?
A tenant surrenders a lease by transferring the lease back to the landlord with the landlord accepting the return. If the landlord accepts surrender, the tenant is not obligated for future rent.
However, in an abandonment, if the L rejects surrender—T remains liable for rent, but under majority rule, L has duty to mitigate damages
Explain a landlords duty to mitigate
Many states impose on the landlord a duty to make reasonable efforts to mitigate damages when a tenant abandons a lease. What constitutes a reasonable effort depends on the circumstances, however an owner of multiple vacant apartments is typically required only to treat the premises as one of his vacant stock.
Explain the rule regarding nonconforming uses (how they can be grandfathered in) and when they can be expanded.
When a zoning ordinance is enacted or modified, there are often properties within a zone that do not conform to the requirements for that zone (i.e., a nonconforming use). A zoning ordinance must generally make provision for property with an existing nonconforming use. Unless the ordinance provides otherwise, the time for testing whether the nonconforming use is protected by a grandfather provision is the date that the zoning ordinance takes effect.
Generally, a property owner whose nonconforming use has been grandfathered is not entitled to subsequently increase the nonconforming use, such as by enlarging a building that houses a nonconforming use or acquiring and developing adjacent property in accord with the nonconforming use. However, the owner may be permitted to increase the frequency of the nonconforming use to upgrade the means to accomplish the nonconforming use, so long as the nature and character of the use does not constitute a substantial change.
Explain what a mortgage is?
Explain what a future advance mortgage is.
A mortgage is an interest in real property that serves as security for an obligation.
A future-advances mortgage is a mortgage given by a borrower in exchange for the right to receive money from the lender in the future. This type of mortgage is also known as a “line of credit.” It is often used for home-equity, construction, business, and commercial loans, and it can provide for obligatory advances or optional advances.
Future advances made pursuant to a loan that makes advances conditioned on satisfactory progress of the project for which the loan was made are optional, not obligatory. Such advances would thus be based on the lender’s good-faith discretion, the lender is not obligated to disburse the funds.
Explain the rule regarding priority when a future advance mortgage is involved
If there is more than one interest in the property, the basic “first in time, first in right” rule is applied to determine the priority of interests.
However, this rule is subject to an exception for future-advances mortgages.
If the advances under a future-advances mortgage are optional, then a subsequent mortgage has priority over amounts that are actually loaned after the future-advances mortgagee has notice of the subsequent mortgage.
The jurisdictions are split as to whether actual notice is required or whether constructive notice is sufficient. In a majority of states, the mortgagee must have actual notice of a subsequent interest in order for later loan disbursements to lose priority. The minority rule, on the other hand, requires only constructive notice of a subsequent interest.
Explain the rule regarding constructive eviction What the result?
When a landlord substantially interferes with the tenant’s use and enjoyment of the property by breaching a duty to the tenant, the tenant’s obligation to pay rent may be excused under the theory of constructive eviction.
In order to end a lease before the end of its term by constructive eviction, the landlord must have breached a duty, which caused the loss of the substantial use and enjoyment of the premises, the tenant must give the landlord notice of the problem and reasonable opportunity to cure, and the tenant must vacate the property within a reasonable period of time. Not every interference with the use and enjoyment of the premises amounts to a constructive eviction. Temporary or de minimis acts generally do not amount to constructive eviction.
Explain a landlord’s duty to repair?
Also, when does a landlord breach the covenant of quiet enjoyment?
Under the common law, there was no implied duty on the part of the landlord to repair leased premises. However, the majority of jurisdictions today enforce an implied duty upon the landlord to repair under a residential lease, even when the lease attempts to place the burden on the tenant, except for damages caused by the tenant. In contrast, courts are reluctant to imply a landlord’s duty to repair in commercial leases because the implied warranty of habitability does not apply in commercial leases.
The covenant of quiet enjoyment is breached only when the landlord, someone claiming through the landlord, or someone with superior title disrupts the possession of the tenant. There is no duty to repair implicit in the covenant.
Explain the doctrine of anticipatory breach as it applies to leases.
The doctrine of anticipatory breach does not apply to leases. While the landlord may sue the tenant for rent as it becomes due, a landlord may not sue for future rent under the lease.
Explain the doctrine of merger in regards to easements
An easement is terminated if the owner of the dominant or servient estate acquires fee title to the other estate. The easement is said to “merge” into the title. The merger of property interests results in the extinguishment of the property right.
Explain the rule regarding implied easements.
If the owner of two parcels of land previously used one parcel to benefit the other, then the court may find that, upon the transfer of one parcel, the parties intended the use to continue if that use was continuous, apparent or known, and reasonably necessary to the dominant land’s use and enjoyment (as distinguished from an easement by necessity, which requires strict necessity).
Explain the rule regarding joint tenants and when it may be severed.
A joint tenancy exists when at least two people own property with the right of survivorship. In addition to the right of survivorship, each joint tenant must have the four unities: the right to possess or use the property and equal interests which were created at the same time and in the same instrument. The severance of joint tenancy may occur in several ways and converts it into a tenancy in common.
A joint tenant may grant a mortgage in his joint tenancy interest. In title theory states, which is the minority of states, the granting of a mortgage constitutes a transfer of title. A transfer of title severs the joint tenancy and converts it into a tenancy in common.
Note: in the majority of states (known as lien states) a mortgage will not sever a joint tenancy
Explain the rule on whether a lease splits a joint tenancy?
There is a split among jurisdictions with respect to joint tenancies when one joint tenant leases his interest. Some jurisdictions hold that the lease destroys the unity of interest and thus severs the joint tenancy, while other jurisdictions believe that the lease merely temporarily suspends the joint tenancy, which resumes upon expiration of the lease.
Explain the difference between a joint tenancy and a tenancy in common. How do we know which is created?
A tenancy in common is any tenancy with two or more grantees with equal rights to possess or use the property, but no right of survivorship. On the other hand, a joint tenancy exists when two or more persons own property with the right of survivorship. The joint tenancy must be created with each joint tenant having the equal right to possess or use the property, with each interest equal to the others, at the same time, and in the same instrument. In most states, there is presumption that a conveyance to two or more persons creates a tenancy in common rather than a joint tenancy. To determine if a joint tenancy was created, the modern trend focuses on the intent of the parties if the language creating the co-tenancy is unclear.
Explain how a joint tenancy can be severed?
A joint tenant may grant a mortgage interest in the joint tenancy property to a creditor. Most states apply the lien theory, which states that the mortgage is only a lien on the property and does not sever the joint tenancy absent a default and foreclosure sale.
A minority of states apply the title theory, which states that the mortgage severs title and the tenancy would be converted into a tenancy in common.
Joint tenants can convey all or part of their individual interests during their lifetimes to a third party, thereby severing the joint tenancy. A joint tenancy is severed when one of the joint tenants contracts to sell her interest in the property.
