Property Flashcards
With a life estate, who pays taxes?
A life tenant has the obligation to pay ordinary taxes on the real property, but only to the extent that the life tenant receives a financial benefit from the property. When the life tenant occupies the land, the financial benefit is measured by its fair rental value. (So if taxes are less than rental value or income from crops etc, life tenant pays taxes. If they don’t, the remainder holder can pay taxes and sue tenant for reimbursement.)
What is a right of first refusal and when is it reasonable?
A right of first refusal is a partial restraint on alienation that, if reasonable, is valid and enforceable by an injunction. This right is generally reasonable if the holder of the right can purchase the property under the same terms offered to another party.
Does a subletter have privity with the landlord?
A subletter has PRIVITY OF ESTATE with the landlord (but not privity of contract). This means subletter is liable for unpaid rent (so is the original tenant).
Assignment is a transfer of a tenant’s entire interest to a third party (assignee) for the remainder of the lease term. The tenant (through privity of contract) and the assignee (through privity of estate) are JOINTLY and SEVERALLY liable for the landlord’s entire harm arising from a breach of the lease.
What kind of recording act is this?
“No unrecorded conveyance or mortgage of real property shall be good against subsequent purchasers for value without notice who shall first record.”
Race-notice
What kind of recording act is this?
“No conveyance or mortgage of real property shall be good against subsequent purchasers for value unless the same be recorded by law.”
Notice statute.
What is the doctrine of estoppel by deed?
Under the doctrine of estoppel by deed, a grantor who conveys an interest in land by warranty deed before owning it is estopped from later denying the effectiveness of that deed. And the grantor’s after-acquired title automatically transfers to the prior grantee.
Who can enforce an equitable servitude?
The benefit of enforcing an equitable servitude is held ONLY by the original parties and their successors in interest. (So random neighbor can’t enforce)
What are the three criteria for creating an easement by necessity?
An easement by necessity is created when (1) the dominant estate is virtually useless (e.g., landlocked) without the benefit of an easement across the servient estate, (2) the two estates were once a single tract of land, and (3) the necessity arose when the land was severed and the two estates were created.
When is a license revocable?
A license is a nonpossessory right to enter and use another’s land for a specific purpose. A license is freely revocable—by the licensor, upon the death of either party, or upon conveyance of the licensed property—unless the licensee detrimentally relied on it or the license is coupled with an interest.
What happens if you buy something w/quitclaim deed and later try to sell it only to find out it has a super restrictive covenant? Can you sue the original owner?
Nope. Under the doctrine of merger, the seller’s duties in a contract for the sale of real property—including the duty to deliver marketable title—merge into the deed at closing. As a result, these duties are enforceable thereafter only if they are contained in the deed.
If a property is damages after signing the contract but before closing, who bears the cost?
The purchaser. Unless the land-sale contract states otherwise, the doctrine of equitable conversion places the risk of loss on the buyer once the contract is formed and can be specifically enforced.
Note that under the Uniform Vendor and Purchaser Risk Act (adopted by a minority of jurisdictions), the seller retains the risk of loss unless and until the buyer takes possession or title is transferred.
If someone buys a mortgaged property SUBJECT to the mortgage, are they responsible for paying the mortgage?
NO. A grantee who takes real property subject to a mortgage does not agree to pay and is not personally liable for the debt. As a result, only the debtor (the prev owner who took out the mortgage) is liable for any failure to make payments on the mortgage loan.
What happens to a junior interest if there is a deed conveying a mortgagor’s interest in the mortgaged property to a mortgagee in lieu of foreclosure?
A deed conveying a mortgagor’s interest in the mortgaged property to a mortgagee in lieu of foreclosure allows the mortgagee to take immediate possession of the property without the formalities of a foreclosure sale. Any junior interests REMAIN ATTACHED to the property, and the mortgagee’s interest is extinguished unless it was reserved.
What is affirmative waste?
A decrease in the value of the property that occurs through the voluntary conduct of the current possessor
For a real covenant to run with the land, who must the benefit or burden affect?
In order to run with the land, the benefit or burden of the covenant must affect both the promisee and promisor as landowners.
Is continuous use required for easement by estoppel?
No.
If the buyer assumes the mortgage, from whom may the lender seek payment?
BOTH from the original debtor and the buyer.
What is the name of the most common modern approach that has replaced the traditional Rule Against Perpetuities?
The “wait and see” approach.
What happens in an intermediate title state after default and prior to foreclosure, absent an agreement between the mortgagor and mortgagee?
Mortgagee is NOT entitled to take possession of the real property after default and prior to foreclosure.
What is a title theory state?
Virginia is a title theory state. This means that when a mortgage is given on a property, the lender holds the legal title to the property until the mortgage is fully paid off. The borrower retains equitable title, meaning they have the right to use and possess the property.
In a title theory state like Virginia, if a borrower defaults on their mortgage payments, the lender can initiate a foreclosure process. Because the lender holds the legal title, they can typically use a non-judicial foreclosure process. This means they do not have to go through the courts to foreclose on the property, which can make the process quicker and less costly than a judicial foreclosure. However, the exact procedures for foreclosure can vary by state and can be subject to various legal requirements and protections for the borrower.
What is a lien theory state?
A homeowner in California, for example, takes out a mortgage to buy a house. The homeowner holds the legal title to the property from the time the mortgage is signed. If the homeowner stops making payments, the lender must go through the judicial foreclosure process to take possession of the property. This involves going to court and proving that the homeowner has defaulted on the loan. The judicial foreclosure process can be lengthy and costly for the lender, but it provides more protections for the homeowner.
Does Rule against Perpetuities apply to leases?
No no no!
What is the mnemonic ECHO?
Adverse Possession
E: exclusive (owner is not using)
C: continuous (includes seasonal)
H: hostile
O: open and notorious
What happens if a joint tenant w/rights of survivorship sells her interest?
A lifetime transfer of a joint tenant’s interest SEVERS that interest from the joint tenancy. The transferee holds that interest as a tenant in common with the remaining joint tenant(s) (no survivorship). If two or more joint tenants remain after the transfer, then they retain a joint tenancy w/survivorship with respect to each other.
What is a vested remainder subject to complete divestment?
A vested remainder is subject to complete divestment if the occurrence of a condition will eliminate the remainder interest.
(To A for life, then my heirs if they survive; if they don’t survive, to C. Heirs are vested because they were determined when decedent died. They have vested remainder subject to complete divestment_
If someone has a mortgage but they sell the land without specifying what happens with the mortgage, are they still personally liable?
A mortgagor can freely transfer mortgaged land to a grantee but remains personally liable for the debt thereafter. The grantee takes the land subject to the mortgage obligation without personal liability for the debt UNLESS the grantee expressly agrees to assume the mortgage. Note: if grantee takes subject to mortgage, mortgagee can still foreclose on the property, but can’t hold grantee personally liable.
When does a tenancy at will terminate?
A tenancy at will is a leasehold estate that has no specific term and continues so long as the landlord and the tenant desire. If only one party is expressly given the right to terminate the leasehold, the lease may be deemed unconscionable and both parties will have the ability to terminate it.
If someone takes out a mortgage on a property, and then a second mortgage, and then defaults on the second mortgage, can the second mortgagee foreclose?
Yes. A foreclosure on mortgaged property terminates interests in that property that are junior to the foreclosed interest but DOES NOT affect any senior interests.
What happens if you have a house, and sell mining rights to your property, and the company mines with reasonable care but your house subsides. Is the company liable?
YES. A third-party owner of subsurface rights is strictly liable for any failure to support the land and buildings that predate the conveyance of those rights, provided that the damage would have occurred in the land’s natural state. (i.e. the house didn’t contribute to the subsidence.)
What happens in your mom leaves you a house w/a mortgage in her will?
Under common law, you can make the estate pay off the mortgage.
Under the common-law (which is admittedly rare) exoneration-of-liens doctrine, the recipient of a specific devise of real property can use the remaining assets in the testator’s estate to pay off any encumbrances on that property.
What rights does the mortgagee have in a title theory state?
In a title-theory state, the lender has legal title to mortgaged land and can take possession of the land at ANY time even if the mortgagor is not in default.
Can a third party deliver a deed to the grantee?
A grantor can deliver a deed to the grantee through an independent third party. If the third party’s transfer of the deed to the grantee is conditioned on the grantor’s death, then the grantor’s delivery of the deed must evidence the intent to make a present gift to be effective.
How is a covenant terminated?
A covenant is terminated by abandonment when an affirmative act—something more than neglect or nonuse—shows a clear intent to relinquish the covenant.
If the purchase-money mortgage is a junior loan, what happens upon sale of a foreclosed property?
A purchase-money mortgage (PMM) has superpriority over all other liens that arose prior to the PMM—regardless of whether the PMM or those liens are recorded.
A purchase-money mortgage (PMM) is a mortgage granted to (1) the seller of real property or (2) a third-party lender to the extent that the loan proceeds are used to acquire title to the real property
Can a buyer who assumes a mortgage raises defenses that the debtor could have raised against enforcement or the mortgage?
NO. A buyer who assumes a mortgage is primarily liable for the debt. And if the assumption of the mortgage was part of the purchase price, then the buyer may not raise defenses that the debtor could have raised against enforcement of the mortgage obligation.
If there’s a vested remainder subject to open, and Rule of Convenience applies as well as RAP, what happens?
The Rule of Convenience prevents the Rule Against Perpetuities from being applied to class gifts by closing class membership when any member of the class is entitled to immediate possession of a share in the class gift.
Does a mortgage with a “due on sale” clause release a mortgagor from liability after transferring the property?
Not if it was waived.
A “due on sale” clause allows a lender to demand full payment of any remaining mortgage debt if the debtor transfers the mortgaged property without the lender’s written consent. If this clause is waived, the debtor remains liable on the note—even after transferring the mortgaged property—until the debtor is released by the lender.
Does a future interest render a title unmarketable?
It can if the future interest holder doesn’t agree to the transfer. All land-sales contracts have an implied warranty that requires the seller to convey marketable title (i.e., defect-free title) upon closing. Title can be rendered unmarketable by a future interest if the holder of that interest does not agree to the transfer.
O leaves to A for life or until she leaves the property, then to B. What does B have?
B has BOTH a vested remainder AND an executory interest.
A defeasible life estate is a present possessory interest that terminates upon the end of the measuring life or the happening of a stated event. If title passes to someone other than the grantor when the present interest terminates, then the estate is followed by a remainder and an executory interest.
In adverse possession, what standard is used to determine “hostility?” In majority? minority?
In most jurisdictions, possession is hostile if the adverse possessor objectively demonstrates an intent to claim the land. However, a minority of jurisdictions considers the possessor’s subjective intent.
How long is the period in Virginia for easement by prescription?
20 years
For adverse possession, how long must possession have been continuous?
15 years.
For personal property, when can a bailor bring detinue?
If the bailed property was not returned at the end of the bailment.
If a senior mortgagee brings a judicial foreclosure, what happens to the junior mortgagee’s interest?
If senior gave no notice, junior’s interest remains. If senior gave notice, junior mortgage is eliminated (whether or not it was in default).
For a judicially supervised foreclosure sale, the foreclosing mortgagee must give notice to the holders of any junior interests in the property to eliminate those interests. Any others who have an interest in the property or are liable on the debt may be joined as proper but unnecessary parties.
What determines if a mortgagee has a senior or a junior loan?
The order in which the loan was recorded.
If a buyer gets a mortgage with a due-on-sale clause and sells the property to new buyer who assumes the mortgage, may the mortgagee foreclose?
YES. A due-on-sale clause allows a lender to demand full payment of the remaining mortgage debt if the debtor transfers the mortgaged property without the lender’s permission.
Exceptions: fewer than 5 units in apartment building. Single family residence exceptions: transferred to living trust, to joint tenant upon death, to spouse or child, a subordinate lien with no occupancy rights is granted, a lease of <3 years with no purchase option, transfer to ex in divorce
What happens if the servient estate starts using the easement in a different way?
An easement holder may increase the manner, frequency, or intensity of an easement’s use so long as that increase does not unreasonably damage or interfere with the use or enjoyment of the servient estate.
If it does, the dominant estate may seek self-help, including blocking off the easement, an injunction, or damages: NOT terminating the easement
