Property

Question 1

What is fee simple determinable and what is the accompanying future interest?

Answer 1

limited by specific durational language
* The fee simple lasts while the period is in play but as soon as the period ends, the fee simple ends
* Common duration words: “while”, “during”, “until”
* “To A, so long as the land is used as a farm” or “to A until it is no longer used as a farm”
* Accompanying future interest: Possibility of reverter
Interest vests automatically after the durational period ends
“to A, so long as the land is used to farm.” If land is not used as farm, the interest automatically vests in grantor as fee simple because it reverts back to him

Question 2

What is fee simple subject to condition subsequent and what is the accompanying future interest?

Answer 2

limited by specific conditional language
* ○ Conditional language like “provided that,” “on the condition that”
* ○ Accompanying future interest: Right of Entry (AKA Power of Termination)
▪ Does not vest automatically, must be reclaimed (by going to court)
“to A, but if the land is not used to farm, O can re-enter and re-take.” O would have a right of entry

Question 3

What is Fee Simple Subject to Executory Interest and what is the accompanying future interest?

Answer 3

Limited by durational or conditional language. Interests ends when a particular event happens, resulting in future interest vesting in a third party (not the grantor).
* ○ “To A and her heirs, but if liquor is served on the premises, then to B and his heirs” A has a fee simple subject to executory interest. B has an executory interest
* ○ Accompanying future interest: Executory Interest
▪ Future interest that will divest (cut short/terminate) an earlier interest
▪ “To A and her heirs, but if liquor is served on the premises, then to B and his heirs” B has an executory interest because he will divest A’s interest if liquor is served
“To A while the land is used for school purposes, then to B”

Question 4

Life Estate

Answer 4

Ownership that is limited by a life. Terminates when the life tenant (LT) dies/measured life ends

Question 5

What is a remainder?

Answer 5

a future interest in real property that is capable of becoming possessory upon the expiration of a life estate

Question 6

what is a contingent remainder?

Answer 6

a remainder that is subject to some condition precedent (other than the natural termination of a prior estate) OR held by an unknown or unborn person

subject to condition precedent: “To A for life, then to B and his heirs when B gets married”
Subject to unborn ascertained person: “To A for life, then to B’s heirs”

Question 7

what is a vested remainder?

Answer 7

A remainder that automatically becomes possessory upon the natural expiration of the life estate. It is NOT subject to any condition precedent AND held by an identifiable living person

Ex: “to A for life, then to B”

Question 8

what is a vested remainder subject to total divestment?

Answer 8

a vested remainder that is subject to a condition subsequent, such that the remainderperson could be divested after taking possession

Ex: “to A for life, then to B; but if B gets married, then to C”

Question 9

what is a vested remainder subject to open (class gift)?

Answer 9

a remainder that is vested in a described class, at least one of whom is capable of taking possession

Ex: “To A for life, remainder to children of B and their heirs” B has one living child who has a vested remainder subject to open but B may have more children

Question 10

What must a deed contain to be considered valid?

Answer 10

(1) Be in writing and signed by grantor
(2) Identify the parties
(3) Contain words of transfer
(4) Identify the land with reasonable certainty

Question 11

what is a land sale contract? Is it subject to the SoF?

Answer 11

• a contract for the conveyance of an interest in land. It governs until closing, and then the deed becomes the operative document governing the conveyance (merger doctrine)
• yes

Question 12

Statute of Frauds

Answer 12

• writing
• must be signed
• by parties to be bound
• must articulate essential terms (identity of grantor/grantee, intent to convey, consideration to be paid, description of land)

Exception: partial performance (must meet 2 of 3 to apply)
* payment
* possession
* improvements made to land

Question 13

warranty of marketable title

Answer 13

Implied in all land sales contracts. Requires the seller to provide a marketable title to the buyer on the closing date (but not before). To be considered “marketable,” title must be free from risk of litigation.

Question 14

What are some defefects that render a title unmarketable?

Answer 14

• acquired by adverse possession
• Has encumbrances (easements, covenants, mortagages) [Note: seller has the right to satisfy outstanding mortgages/liens with sale proceeds]
• zoning ordinance violations

Question 15

If the seller cannot convey marketable title, what are two things the buyer can do?

Answer 15

• The buyer can rescind the contract and refuse to close
• The buyer can also choose to accept the land with the defect and enforce the contract

Question 16

is a property in violation of a building code considered an encumbrance (for purposes of complying w/ warranty of marketable title)?

Answer 16

No, title to that property will still be considered marketable

Question 17

is a property in violation of zoning laws considered an encumbrance (for purposes of complying w/ warranty of marketable title)?

Answer 17

Yes, violation of zoning laws would be an encumbrance and make title unmarketable

Question 18

merger doctrine

Answer 18

all obligations contained within a land sales contract (relating to quality of title) merge into the deed and any obligations contained in the contract can only be enforced if they are incorporated into the deed

Question 19

are “as is” clauses allowed in land sale contracts?

Answer 19

Yes. An “as is” clause in a contract will be enforced when there is no positive misrepresentation or fraudulent concealment from the seller.

Question 20

equitable conversion

Answer 20

Upon entering a land-sale contract, a buyer receives equitable title to the property while the seller retains legal title and acquires the equitable right to receive the purchase price upon closing

Risk of loss: if property is destroyed before closing through no fault of the parties, buyer bears the risj of loss in most jxs, even if buyer has not taken possession.

Death of a party: if buyer or seller dies before closing, rights to the contract pass according to interests held
* seller’s interests: passes as personal property (seller’s estate can sue for sale proceeds)
* buyer’s interests: passes as real property (buyer’s estate can sue for delivery)

Question 21

Fixture

Answer 21

A chattel that has been so affixed to land that it has lost its identity/it has ceased being personal property and has become part of the realty (ex. heating pipes)

Question 22

What is the rule re: fixtures when it comes to a L-T lease?

Answer 22

Tenant may remove chattel she installed if (1)
removal occurs before the lease expires and (2) removal doesn’t cause substantial harm to the property

Question 23

Race statutes

Answer 23

• “First recorded or “first to record”
• First to record wins, even if subsequent purchaser had notice of prior unrecorded conveyance (does not require good faith)

Question 24

Notice statutes

Answer 24

“In good faith” or “without notice”
A subsequent bona fied purchaser is protected if she acquires without notice of a prior, unrecorded conveyance (no actual knowledge of a prior conveyance)

Question 25

Race-notice statutes

Answer 25

• “In good faith” or “without notice” + “first duly recorded” or “first recorded”
• A subsequent purchaser wins if (1) acquired without notice of a prior, unrecorded conveyance and (2) records first

Question 26

what is a lien theory state? Does it sever joint tenancy?

Answer 26

A lien theory state is one where the mortgagee/lender has a lien on the property and the buyer has legal title. It does not sever joint tenancy.

Question 27

what is a title theory state? Does it sever joint tenancy?

Answer 27

A title theory state is one where the mortgagee/lender has legal title to the property and the buyer has an equitable right to the property. The buyer doesn’t get legal title until the mortgage is paid off. Title theory severs a joint tenancy, converting it to a tenancy in common

Question 28

Purchase money mortgage

Answer 28

A mortgage to buy property. This type of mortgage is senior to other types of interest

Question 29

Future advance mortgage

Answer 29

AKA second mortgage. A line of credit used for home equity, construction, business, and commercial loans

Question 30

Subject to mortgage

Answer 30

Subsequent buyer doesn’t agree to pay loan and is not liable for loan. Seller (original buyer) remains solely liable for debt

Question 31

Assumption of mortgage

Answer 31

Subsequent buyer agrees to pay loan and is primarily liable for it. Seller becomes secondarily liable

Question 32

Acceleration clause

Answer 32

Allows creditor to demand entire loan due and payable if debtor defaults

Question 33

Due-on-sale clause

Answer 33

Allows creditor to demand entire loan due and payable if debtor transfers/sells mortgaged property without permission
A lender may NOT enforce the due-on-clause under the following circumstances:
* Devise, descent, or transfer to joint tenant upon death
* Transfer to spouse or child
* Transfer to ex-spouse in divorce
* Transfer to borrower’s living trust

Question 34

Due-on-encumbrance clause

Answer 34

Allows lender to accelerate mortgage obligation (demand immediate payment of the full amount of the outstanding loan, including interest) if borrower obtains second mortgage or otherwise encumbers property without the lender’s consent.
If the mortgagor/borrower cannot pay the balance, then the mortgagor is in default and the lender can foreclose on the property

Question 35

In a lien state: if the buyer defaults on mortgage payments, when can the mortgagee take possession of the property?

Answer 35

mortgagee/lender can’t take possession prior to foreclosure bc lender has a lien until foreclosure is complete. The mortgagor is the owner up until foreclosure

Question 36

In a title state: if the buyer defaults on mortgage payments, when can the mortgagee take possession of the property?

Answer 36

As the holder of title, the lender technically has the right to possess the property at any time

some jx follow an intermediate title theory (modified title theory). The mortgagor retains title until default, then the lender can take possession

Question 37

What is the equity of redemption? When must the buyer exercise it?

Answer 37

• CL: A right held by the mortgagor/borrower to reclaim title and prevent foreclosure upon the full payment of the debt.
• The mortgagor must exercise this right before the foreclosure sale

(keep in mind statury redemption - permits mortgagor to retain property after a foreclosure sale too)

Question 38

what is a statutory right of redemption?

Answer 38

Contrasted to the common law equity of redemption right. Some jx permit mortgagor/buyer to retain property after a foreclosure sale

Question 39

Can a mortgagor/buyer waive their right to equitable redemption?

Answer 39

No. Even if they sign documents indicated they have waived the right, it will not be considered valid.

Question 40

Deed in lieu of foreclosure

Answer 40

To avoid foreclosure, mortgagor/buyer can agree to give mortgagee/lender deed to property in exchange for the release of all obligations under the mortgage; such transactions will be valid as long as they are fair and reasonable under the circumstances

Question 41

easement appurtenant

Answer 41

[two pieces of land] an easement that benefits the dominant estate (allows property owners to access land that is only accessible through a neighbor’s land). Easement “runs with the land,” so generally it transfers automatically when the dominant estate is transferred

Question 42

easement in gross

Answer 42

[one piece of land] Easement benefits an individual or legal entity. There is only a servient estate [ex: easement to use a boat ramp, easement for railroad co to pass through someone’s land)

Question 43

What are the 4 types of implied easements?

Answer 43

• necessity
• implication (prior use)
• prescription
• estoppel

Question 44

easement by necessity

Answer 44

An easement by necessity is implied when severance of common ownership occurs and one parcel of land becomes useless or landlocked (there is no road or access w/out crossing another’s land).

Must meet the following conditions:
* Common ownership: dominant and servient estates were owned in common by one person AND
* Necessity at severance: when the estates were severed into two separate estates, one of the properties became virtually useless w/out an easement

Strict necessity, inconvenience not enough
Ends when no longer necessary

Question 45

easement by implication (prior use)

Answer 45

An easement created by prior use on a property. Must meet the following conditions:
* Common ownership: a large estate owned by one owner
* Before severance: the owner of the large tract uses the land as if there’s an easement on it (also known as a quasi-easement)
* After severance: use must be continuous and apparent at the time of severance (consistent and not concealed)
* Necessity: use must be reasonably necessary to the dominant estate’s use and enjoyment (lower standard than strict necessity)

Question 46

easement by prescription

Answer 46

Acquiring an easement through adverse possession, except instead of possessing land, possess use of land
Elements are the same as AP, except no exclusivity (sharing easement w/ owner, others)

Question 47

easement by estoppel

Answer 47

when easement holder gives someone else permission to use their land, that person relies on use, and easement holder withdraws use to the other person’s detriment

Question 48

what is one big difference between express easements and implied easements?

Answer 48

express easements are subject to SoF and recording statutes, while implied easements are not

Question 49

Equitable Servitude

Answer 49

a promise between parties to do/not do something on land that is enforceable by an injunction. To bind a successor, an equitable servitude must (“TWIN”):
* Touch and concern the land
* Be in writing
* Intent (parties must have intended for the promise to bind successors)
* Notice (actual, constructive, inquiry)

Question 50

what is a nonconforming use in zoning?

Answer 50

A use that exists at the time a zoning ordinance passes that doesn’t conform. A nonconforming use cannot be eliminated at once. Generally, the nonconforming use may continue indefinitely, but any change in the use must comply w/ the zoning ordinance

Question 51

The Federal Housing Act (FCH) bars discrimination, but there is an exception for…

Answer 51

religious orgs, private clubs, and building owners who have no more than 4 apartments if one of them is occupied by the owner

Note that despite exception, printing/publishing an ad indicating a (racial, religious, gender, disability, etc) preference is still prohibited